Itella developing complete e-commerce service
Finland’s national postal operator Itella Group is developing a major new all-in-one e-commerce fulfillment service that could eventually provide same-day delivery for online purchases.
The EUR 10m project involves an investment in a new warehousing system, with automated fulfillment systems, at the company’s logistics centre at Voutila, not far from Helsinki-Vantaa airport.
The new warehouse facility should be completed next year.
Itella said the new service will offer online retailers access to “one of the most sophisticated warehousing and delivery systems in the whole of Europe”. The company said machines will help in the processing and fulfillment of online store orders.
The postal company said alongside the new facility, it will expand its parcel delivery solutions into a complete service geared to e-commerce merchants — including stock warehousing, picking and packing, delivery and returns.
Itella said that while growing online stores usually manage their own warehousing activities, its outsourced approach will be more flexible to business growth, cutting down on the amount of upfront investment an e-commerce retailer has to make to support its ambitions.
Aku Happo, the Itella e-commerce vice president, said: “For consumers — the customers of online stores — the new complete solution will translate into even shorter delivery times.
“Soon the customer will receive the goods within 24 hours of the order, or even during the same day. Online stores, in turn, will receive all services even more comprehensively from the same supplier, ranging from warehousing to delivery and returns,” explained Happo.
Itella said the value of online shopping in Finland was EUR 10.5bn last year, 9% up on the previous year after steady growth during the past decade.
The loss-making postal operator is shifting its business significantly towards e-commerce at the moment, since its revenues are being hit hard by the ongoing annual decline in letter volumes.
Itella, which operates in the Baltic states and Russia as well as its home market of Finland, said its new services will help e-commerce merchants expand their sales in international markets as well as within Finland itself.
The company sees Russia as a particularly key area for its growth ambitions, including on the e-commerce side. E-commerce in Russia has been growing at double-digit rates, leading Itella to target a doubling in its revenues in the country by 2020.
Samuli Seppälä, managing director of online electronics retailer Verkkokauppa.com, said the new Itella warehousing solution could be an answer to the issue of capacity bottlenecks as sales volumes surge at certain times of the year.
He said: “We need cost-effective ways of addressing the different logistics needs caused by seasonal fluctuations in the future, too. Itella’s new warehouse, for example, which will be completed next year, will address these needs.”