Solving post-Brexit challenges for apparel brand Jockey
One of these changes is that the direct to consumer (DTC) e-commerce part of their business has experienced a rapid boom in recent years, in particular since the Covid-19 pandemic, and so there is a growing need to for Jockey to ship their products directly to end users.
A key market for their products is the UK, however reaching UK consumers with products shipped from the company’s European Distribution Center (DC) near Prague, Czech Republic, had become more challenging due to additional pressures: Brexit had increased both the cost of duties on goods entering from the EU, and the cost of freight.
“We wanted to be sure we could continue to serve our loyal and growing UK customer base,” explains Todd Bland, Head of European Operations at Jockey, “and to maintain their high-end customer experience. We investigated having our own logistics facility in the UK, but this was too expensive to have been a viable option.” In addition, the growth in European and UK e-commerce sales could have placed the Prague operation under additional stress and strain, and so the team at Jockey were looking for an answer that would work for them – but more importantly for their end customers.
Happily, a comprehensive way forward presented itself. “One of our DHL partners in Prague told us about the DHL Fulfillment Network – and it nearly seemed to be good to be true! The most amazing thing was that it was true. They had the perfect answer for our needs!” exclaims Todd. The company already has a successful relationship with DHL Supply Chain, who are the 3PL supplier for their Prague Distribution Center.
“With this new approach, we ship goods in bulk from our Prague DC to the UK, and they are then stored at the DHL Fulfillment Network facility there. This is classed as an internal transfer, meaning that duties are applied to the cost of the goods entering the country; previously, when we were shipping them to the end consumer from Prague, the duties had to be applied to the retail value of the goods, which meant considerably higher charges applied.”
Todd continues: “The DHL Fulfillment Network stores the products destined for our UK customers in the UK itself, and then UK orders placed on our jockey.co.uk site are picked, packed and distributed to customers from the UK. Because the goods are already in the country, this also helps keep our freight costs down. The process has been really smooth for us. The level of service we receive from DHL has been very quick and also reliable, which means we can keep our end customers happy – and coming back for more.”
Jockey found the set-up with DHL to be rapid, becoming operational in just a few short months. Jockey’s UK website uses Shopify, and as this integrates easily with the DHL Fulfillment Network – as do other leading e-commerce sites – this contributed to the ease of set-up.
“What we like about the DHL Fulfillment Network is that it is a modular and scalable approach: we can address our needs in phases. We are currently using the service for orders in the UK from our own UK website, but we can see that it could be useful in future for our UK wholesale and marketplace channels, and indeed in other countries,” notes Todd.
Sales at Jockey in Europe through e-commerce:
a few years later
Prior to Covid, about 10% of sales at Jockey in Europe were through e-commerce. A few short years later, they have already grown to about 50%, and there is no sign of this trend changing.
“Operations in every organization are different, but one thing that we have in common is that we are all facing an exciting future of e-commerce growth,” observes Todd. “My advice to other companies is to be prepared for this and ensure your fulfillment service is ready to deliver for you: do the cost analysis, explore the options that are out there, look for one that gives you the flexibility to scale up for peak season and scale down again, and to reach new consumers in new markets. Ultimately, choose a partner who is there to help you grow.”