ASOS has launched a global fulfilment programme to optimise its global stock management capabilities and provide greater flexibility to move stock efficiently around its global warehousing network.
At the Barnsley distribution centre, it has installed a new warehouse control system to support automation. It has set itself the target of reducing the labour cost per unit at its UK warehouses to 50p from the current level of 81p.
At the Eurohub fulfilment centre in Germany it has been developing stock monitoring capabilities.
“This global fulfilment programme is a key step in our journey to becoming a truly global retailer,” it said in its results for the half year to 28th February.
“Our warehousing activities continue to increase, with total order processing up 14 per cent year on year, including our biggest ever peak trading volumes during November 2014, reaching a record 2m parcel despatches in one week.”
It started mechanised picking at Barnsley at the start of the financial year. “By the end of February, the vast majority of orders were being batch picked and we are targeting a per-person picking capability of 200 units per hour by the end of the financial year.
“Labour cost per unit for our UK warehouses has also increased by 7 per cent to 81p (2014: 76p) as a result of the short-term disruption but we expect this to decrease over the remainder of the year, and continue to target a medium-term UK labour cost per unit of 50p.”
ASOS exited our off-site storage facility at Lister Hills during February after going live with two high bay mini-loads earlier in the period, doubling Barnsley on-site storage capacity.
“Our new warehouse control system now automatically retrieves stock as required from the mini-loads to maintain stock levels in the main pick-face area of the warehouse, increasing efficiency and our stock management capabilities.”
During the second half of the year it plans to focus on increasing stock levels at the German Eurohub, which currently despatches 24 per cent of total EU orders, principally to Germany, France, Spain, Sweden and the Netherlands.
“We expect this to increase to 35 per cent by the year end. Our returns processing centre in Swiebodzin already processes nearly all returns from the Eurozone, improving refund processing times.
“Our warehouse in the US continues to develop and consistently fulfils over 25 per cent of US orders. We will turn our focus back to our US fulfilment during the next financial year to further drive local fulfilment in this territory.”
In the UK, it extended its Saturday evening next-day delivery cut-off from 8pm to midnight and its Sunday next-day delivery cut-off from 2pm to 5pm. It has also extended return options with the launch of returns via Doddle stores, home collection returns and InPost LockerBoxes in the UK.
Internationally, it is rolling out next delivery services. It now covers France, Germany, Spain, Italy, Denmark, Sweden, and the Netherlands. It plans to extend next day services to Belgium, Ireland and Northern Ireland by the end of the financial year.
Revenue for the half year was up 14 per cent to £550.5m but operating profit fell ten per cent to £18m. ASOS said this was due to “the decline in gross margin as a result of international price investments, plus additional operating expenses related to investments in our warehousing infrastructure”.