Hermes prepares for expansion

We may not like to admit it, but many American habits have become part of the fabric of our lives.

Black Friday, the day after the Thanksgiving holiday, is the traditional trigger for the start of the US Christmas shopping season. When online retailer Amazon introduced Black Friday to the UK in 2010, sceptics believed it would never catch on.

How wrong they were. According to Amazon, Black Friday 2014 was its busiest day on record. Companies like Hermes, the parcel delivery firm, have been monitoring Black Friday’s growing significance. As CEO of Hermes, Carole Woodhead works with some of the biggest high street names, including Next Directory, ASOS and Tesco.

She knows Black Friday is changing the way we plan our Christmas shopping. Hermes saw a 49 per cent growth in activity over the Black Friday weekend last year. Hermes, which employs around 500 staff in Leeds, is focusing a lot of energy on ensuring it meets these new demands. The emergence of Black Friday has concentrated minds in the retail sector.

“We have two choices,’’ Ms Woodhead said. “We either manage the capacity and smooth the delivery out, which is not the best customer experience, or we invest in both parts of the operation, to be able to have a much bigger capacity; but then that capacity is sitting idle for 10 or 11 months of the year.

“At the moment, our retail customers are saying it’s the latter that we want you to do. So we’re going to spend another £10m this year on putting a second tier sorter on our new Warrington hub. We only opened the hub last year, and that in itself was a £20m to £25m investment.

“In the second year of operation we’ll put a second tier on that, that will give us another 500m parcels capacity per night. We will only use that anywhere near its peak on probably five nights in December.”

Hermes is also moving into new overseas markets after seeing its turnover and profits rise last year. It also plans to dramatically increase the scale of its network of ParcelShops; which offer a flexible service for receiving or returning parcels. Last year, the company’s annual parcel volume was 210m.

Ms Woodhead joined the home shopping retailer Grattan in 1987. In April 2001, after completing an MBA, she joined Parcelnet as director of operations, and became managing director three years later. Parcelnet has operated as Hermes in the UK since March 2009. Today, Ms Woodhead is the UK CEO, and she has overseen the largest investment programme in the company’s history.

Hermes now handles more than 140 million collections and deliveries each year on behalf of high street, catalogue and online retailers.

“We’ve had another good year of growth, so we’re looking at 10 to 15 per cent growth over the last year in terms of our business.’’

Ms Woodhead said. “We’re very much following our retail customers. Retail customers in the UK are saying that some of their best growth opportunities are overseas. Sixty per cent of shoppers, for example, in Germany and France have bought from UK retailers, and actually search out UK brands.

“The Hermes group, of which we are part, has its own delivery operations in France, Germany, Italy and Austria and we have partner carriers in the other countries of Europe.

“So we’re launching a European proposition, and we will, in the next 12 months, make it a worldwide proposition by using partners. So our initial focus is in those countries of Europe. Seventy per cent of all homes deliveries are in the UK, Germany and France where we have our own networks.

“We have 36,000 Parcelshops across our European companies and partners. That’s becoming an increasing trend. In the UK, click and collect is growing at 12 per cent a year.

“In places like France, 60 to 70 per cent of all online deliveries are picked up from Parcelshop already. The UK is the newest to Parcelshops and click and collect – it’s where the growth rate is rapid.

“ If you look at retailers who have been multi- channel for a long time...it’s quite typical that between 40 per cent and 60 per cent of their parcels are ordered online and picked up in stores.

“If those retailers have 200, 500 or even a couple of thousand of stores, that gives them a good reach, but if you add on to that 4,500 myHermes Parcelshops around the country and we grow that by another 1,000 this year, then it backs up that message. We delivered 12.5m parcels through our Parcelshops last year.”

The number of women who make it to the top of the corporate ladder remains pitifully small. Why are there so few women chief executives in the UK?

“I’m an absolute believer in giving opportunity to everybody, because that’s where you tap into the best talent,” said Ms Woodhead. “Historically, women are under-represented in senior positions. I think confidence is a part of that. I read a survey that said when a man is looking for a role, if he reads the job description and says, ‘Forty to 50 per cent of that, I’ve got,’ he will apply.”

By contrast, the survey found that women will only apply for a role of they believe they have 70 per cent of the qualifications.

“We need to feel we’re very close to a role to take it,” she said. “One of the things I say to women is, ‘Look at any opportunity that’s out there, and think about the good reasons that you can do it, and go for it. Don’t be afraid’.”