Our thesis and insights
One of the key winners of the pandemic has been the global e-commerce sector. We’ve seen major success stories in the past year across most verticals targeting the online channel, which even produced some of the most valuable startups in the world: e-commerce payment giants Klarna and Stripe. There’s also Uncapped for online business lending, Gorillas for online grocery delivery, or even Ankorstore or Faire for online B2B sourcing and procurement.
While we know that the trend in online sales and e-commerce adoption is on the rise, there’s a shift behind the scenes happening that is not so evident yet equally important to support this shift in consumer behaviour. First of all, as brick-and-mortar shops shut down for the better part of 2020, retailers quickly pivoted to adapt their model to service customers directly or faced ceasing operations entirely. However, the entire supply chain for online fulfilment is completely different from that of brick and mortar. From types of shipments (bulk vs. individually packed parcels), frequency of deliveries, and even product recipients, many factors vary in shifting to D2C fulfilment. For example, instead of shipping larger orders less frequently to retail chains or distributors, retailers must instead process high volumes of smaller orders directly to end-customers.
Another challenge is that individual customers are geographically distributed and are spoilt with the speedy and flexible “Amazon Prime-style” delivery service. The beauty of e-commerce is that it enables merchants to access customers across borders. However, a global customer base means fulfilment and logistics operations need to be global as well. Location of fulfilment centers will dictate how quickly (and cheaply) products can reach customers, which will ultimately drive satisfaction rates. To put this into context, one of the top factors driving cart abandonment for online consumers is high shipping costs as well as long delivery times. As consumer demands and complexities grow, retailers face more and more challenges to keep up with the status quo.
Lastly, lack of connectivity and real-time tracking of inventory can be a primary cause of fulfilment problems for e-commerce merchants. As the click-to-buy process happens fairly quickly, warehouses and logistics companies need to receive order information in realtime to avoid shipping delays. Real-time tracking and connectivity is also a key technology required for efficient returns management capabilities. This means fulfilment partners need to have direct access to online shops’ inventory, order processing, accounting, and other back-end systems to build confidence around a company’s logistics processes. Without a digital solution, inventory can sit in the warehouse for days before being prepared for shipping. It also creates a time lag for companies to manage the status of their inventory and operations.
All of these pain points have major implications on inventory management, warehouse planning and last-mile delivery operations. With all these new challenges, retailers face the decision to manage these components in-house or outsource to a third party provider. And this is where byrd comes into play.
Founded in 2016, byrd has built an asset-light fulfilment business through its network of 15 warehouses in 5 markets across Europe. Its software allows online merchants to fully outsource their fulfilment and logistics operations by connecting their online shop and inventory systems via API’s, solving all the headaches and pain points for online stores outlined above.
We first met Alex, Petra and Sebastian from byrd earlier this year and were really impressed not only by their stellar growth (nearly 300% y-o-y!) but by their ambition to scale and build a truly pan-European e-commerce fulfilment business. Already live in Austria, Germany, the UK, Netherlands and France, the team has big plans to expand operations across Europe over the next year. And it’s not just that. byrd has built a large and diverse customer base serving fashion, cosmetics, and health & wellness industries shipping hundreds of thousands of parcels per month. We’re very excited to be partnering with Alex, Petra, Sebastian and the rest of the byrd team on this journey to building the European market leader in e-commerce fulfilment.
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