Building a digital-first retail logistics business with Xero and Talenox
First published by Kevin Fitzgerald FCCA, Managing Director – Asia at Xero, on 20 February 2020Media
Driven by the rise of smartphones and growing internet penetration, the burgeoning middle class in Asia is making more eCommerce purchases than ever. The 2016 and 2017 Google-Temasek reports projected a US$200 billion internet economy in the region by 2025. The 2018 report, however, placed that number even higher, at US$240 billion—an increase of 20%!
Asia boasts some of the most eager shoppers in the world, and they’ll buy everything from household products and makeup to bags and tools online. But at the same time, many have experienced the frustration of unreliable shipping.
Even in Singapore, one of the most advanced cities in the world, last-mile fulfillment tends to be the most challenging for online retailers. Customers have to set aside a specific block of time to physically receive their package, the delivery is made late, or they have to pick up their package at a nearby post office. Traditional logistics is siloed, laborious, and offers customers zero transparency and peace of mind.
An online purchase can be completed in a few simple steps in under ten minutes so why is it that the delivery process can take up to days (for domestic) or weeks (for international)? This is the conundrum that Singaporean startup blu aims to solve.
Birth of blu
Prashant Dadlani, 28, is the founder of four-year-old logistics startup blu. While pursuing his degree at the Singapore Management University, he became inspired to build a network of self-service pick-up stations, allowing eCommerce shoppers to retrieve their purchases whenever, wherever.
“I noticed a glaring inertia in the way orders were delivered in Singapore,” he said in an interview with Asian Entrepreneur. “It often took days or even weeks before items arrive. Apart from the wait, there were many complaints about delays and missed deliveries.”
He continues, “Seeing this as an anachronistic problem in a digital age, I founded blu to re-imagine the future of retail logistics. While logistics players were making piecemeal tweaks, I focused on systemic innovation throughout the value chain to achieve greater efficiency.”
Some may be surprised to hear that Dadlani has a business and finance background, not a tech one. But his success shows that anyone can leverage new technology to build a digital-first business and use it to revitalise traditional industries.
“Logistics-focused online retail is small but growing rapidly,” he says, “and that provides a lot of opportunities to transform and rethink the way consumers interact with brands and retailers. A tech-enabled logistics model underpins the future of how people will consume.”
Now, blu is appointed by the government as one of the two Locker Operators of the Federated Lockers and Collection Points Programme. It also works with logistics companies such as DHL and FedEx, so that parcels can be picked up at bluPort parcel lockers instead of being delivered to homes.
Going above and beyond
What sets blu apart is that it provides services beyond last-mile logistics by going higher up the retail value chain; these services range from order and inventory management to warehousing and order fulfillment. With such end-to-end integration, orders can be placed, fulfilled and delivered to a bluPort within a day.
This process is highly automatic, so retailers can achieve synergy and focus more on developing the best brand and customer experiences. And because bluPort is brand agnostic, any retailer or logistics service provider can leverage the expanding bluPort network to improve their operation workflows and reduce the cost of redeliveries.
blu’s competitors, whose offerings usually consist of manned collection points, would find it challenging to compete on security, 24/7 accessibility, and real-time proof of delivery.
Digital from day one
From the beginning, blu was established as a digital-first business, laying a strong operations foundation by adopting Xero for cloud accounting and Talenox for human resource management (HRM) services. In addition, they have also used ApprovalMax to increase the number of user permissions to ensure an even smoother workflow for its expanding crew size.
Xero provides Dadlani with a real-time view of the business: the platform’s instant reports give insights into all sorts of financial indicators that help the team manage everything from vendors and customers to costs and billing. Built-in reports have made Goods and Service Tax (GST) reporting a breeze by allowing managers to drill down into individual transactions with ease.
“Some of my favourite features include the bank feeds for easy bank reconciliation, foreign exchange rate integrations for automated posting and tracking of foreign currency gains/losses and revaluations,” says Dadlani. “The automated recurring manual journals are also great for handling prepaid expenses. It has been handy to be able to email statements to customers with one-click as well.” With recurring bills and invoices as well as instant reports and statements, it has been easy to keep track of transaction billing and ensure prompt payments.
These digital tools have allowed Dadlani to focus on strategy rather than data entry. On migrating from an ERP system, Dadlani shared, “ERP is more expensive but doesn’t necessarily equate to better efficiency and product fit.”
With many one-click features and integrations, it's been a breeze to handle a full set of accounts within Xero. Multiple enterprise studies have shown that digitalising manual processes can slash time spent on administrative work by over half.
The use of digital HRM services such as Talenox with its integration capability with Xero has also resulted in faster workflows across different departments and made data management and access simple.
Technology can be harnessed by smart entrepreneurs in a variety of ways to create change. The changes don’t always have to be industry-wide—they can be as simple as helping budding founders streamline their operations and achieve success within their organisations.