Analysis

INTERVIEW How Holland & Barrett accelerated its multichannel transformation during Covid

As the COVID-19 pandemic opens divisions between physical and online retailers, health food seller Holland & Barrett has accelerated its move to online and to a more flexible logistics model, according to its ecommerce operations head.

Paz Khorana, [Head of Web Operations] says that the company has adopted a ship-from-store model and opened up new temporary pop-up fulfilment centres to cope with a rise in online demand and drop in footfall during the crisis.

“The products we sell are really important,” he tells eDelivery. “During the pandemic there has been a massive surge around products that support immunity.”

While the company has been able to keep stores open due to being classified as an essential retailer, footfall has been down up to 60%, says Khorana. Meanwhile, at times online has been up exponentially compared to the previous year.

The retailer has made three major changes to its fulfilment operation. Firstly, the company has worked with DHL to set up a new fulfilment centre at Crick Northants. The retailer used DHL’s “Pop Up” solution, which is designed to support retailers that are dealing with the shift to online shopping. It works on a pay-as-you-go model and can handle up to 10,000 orders per day.

Secondly, 50 stores have been converted into fulfilment hubs, now collectively processing 11,000 orders per day. The company has set up a partnership with Hermes to collect items from the stores.

Although Holland & Barrett was not offering delivery from store prior to the crisis, Khorana says that everything that was needed to ship from store was there.

“We just had to connect the dots,” he says.

This meant enabling orders to be routed to stores technically through a piece of technology that was developed in-house. Since a given store doesn’t have the same available range as an ecommerce warehouse, the retailer also had to build logic into the system that ran each order against a store’s available inventory to ensure it had everything that was needed for the order.

While normally Holland & Barrett would use a carrier management system, it also set up each store as an individual SME for its Hermes collections, meaning that store staff simply put the details of the order into the Hermes system.

While the additional impact resulted in an initial backlog of orders, these changes have meant that the retailer has been able to return its delivery promises such as next-day and nominated day back to normal. Holland & Barrett sent all customers who had seen delays a gift voucher.

Khorana is already looking to the next phase once the lockdown is eased, where the retailer probably won’t need 50 stores to be available for online order. He expects the next phase will see the company rolling out this ship from store feature in a non-manual way, with regular collections and specific staff contracted to handle in-store fulfilment.

The company also plans to continue to look for more ways to offer customers flexible, convenient and quick home delivery.

We are covering the shift to digital during Covid-19 in our Leap from Lockdown series, available here.