Hattons Model Railways was “drifting” strategically before a benchmarking exercise in 2017 led it to overhaul its logistics arm, its MD says.
“We got to the stage where the business was at £12 million a year with all software that I had written,” Richard Davies, managing and marketing director at Hattons tells eDelivery, saying that the company had reached something of an impasse in the digital realm. “We’d had a few failed IT projects, including one to run the warehouse with handheld technology.”
Davies says that his team “realised that as a group of people strategically we were drifting and didn’t know which way to head” in terms of improving its business. However, he says that the IRUK index, compiled by eDelivery sister title InternetRetailing, gave Hattons a good place to start.
“We ran ourselves through the scoring system, identifying areas where we were doing well and not so well. We realised operations and fulfilment was an area we definitely needed to work on.”
Hattons started working with Global Freight Solutions (GFS) on the project in September 2017, using its Selector and Expert suite, a despatch platform offering label printing and parcel routing.
The retailer followed this with the introduction of a new front-end system from Shopify this year.
“Don’t put a shiny front end on if you can’t handle the orders,” says Davies, explaining why the systems were introduced in this order.
The project allowed the company to save on space and resources as well as allowing expansion into additional international markets such as the US.
Strategically, Davies says, the decision to outsource logistics to GFS was a conscious effort to “follow in the slipstream” of Amazon.
“[I am a] believer in practical systems that work today,” he says. “It’s for the bigger companies to innovate.”
He adds that companies should “choose where [they] differentiate and make sure that [their] differentiators are important to the customer.”
The improved logistics network allows the retailer to maintain what Davies calls its “great relationship” with its customers, especially when it comes to returns.
“The average processing time for returns (in the IRUK index) is seven to nine days. For us it’s 24 or 48 hours at worst.”
In the future, Hattons plans to implement the GFS Checkout solution, which offers additional options such as the ability to choose when a delivery will arrive and select options based on cost. The company expects this to boost revenues twofold.