July 23, 2012, 4:44 PM

Hermes is helping U.S. e-retailers break into Europe

The German logistics giant turns its attention to the U.S.

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Hermes—a German vendor specializing in supply chain management for large retailers and brands—is looking to attract more U.S. retailers who want to start selling in Europe. The company is offering U.S. retailers access to the European market through its logistics and fulfillment services that serve all countries across the continent.

“Hermes is now in a position where we can offer our wide range of services to American retailers—services that include sourcing and quality control, international transport and warehousing, fulfillment and home delivery,” says Hanjo Schneider, CEO of Hermes Europe. “We estimate that of 740 million Europeans, 364 million regularly use the web looking for online shopping offers around the world.”

Hermes was founded in 1972 as a parcel service by its parent company, Germany-based e-retailer the Otto Group. Hermes has approximately 11,000 employees. It’s also the parent company of 12 companies with offices in 22 countries worldwide and uses a dense network of logistics and fulfillment partners in Europe and other countries around the globe. The vendor—which reported revenue of 1.8 billion euros ($2.2 billion) for its fiscal year-end earnings in late May—mainly does business in Europe, but now wants to expand its international business, a spokesperson for Hermes says.

For U.S. retailers, this means Hermes could act as an international partner and provide access to Europe. In 2011, business-to-consumer e-commerce in Europe grew 18.2% to an estimated 200.5 billion euros ($259.5 billion) from an estimated 169.6 billion euros ($219.5 billion) a year earlier, according to the Centre for Retail Research.  This growth, Hermes says, offers great potential to U.S. retailers.

U.S. retailers seeking to sell in Europe can now benefit from Hermes’ understanding of the European Union member states, as a German company with local presence in all European markets, Hermes says. For example, retailers can use Hermes and the vendors it has relationships with to find Asian manufacturers to produce products and have them tested for quality and safety. Hermes can also arrange to have those goods transported by ship or plane to Europe, and then help arrange local ground transportation to its own or client-operated warehouses, and handle delivery and returns. The vendor also can help U.S. retailers with developing European e-commerce sites, online payment acceptance and call center operations.

“Getting the goods to the end customer has always been a Hermes specialty,” a spokeswoman says. “In Germany alone up to 1.5 million door-bells are rung each day to hand over parcels from many [of Hermes’] clients.

Hermes also recently launched several new offerings, including:

• ParcelShops in the United Kingdom and Russia located in stores that enable consumers to pick up their packages rather than have them delivered to their homes

• Online ordering and tracking of parcels

• Web site design

• Procurement

• An online fashion products platform, Keen On Fashion, which connects international brands to German retailers.

The vendor already works with some U.S. retailers including QVC and Guthy-Renker.

Hermes has helped QVC complete almost 125 million deliveries across Europe since 2004. QVC uses Hermes for quality control, transport logistics and delivery services. QVC sells through TV, the web and, since early 2012, mobile devices in Germany. The retailer has nearly 4,000 European employees and around six million European customers. It also operates two call centers and a logistics center in the country.

Hermes operates a joint Hub facility within QVC’s logistics center in Hückelhoven, Germany, from which QVC says it sends out more than 15 million parcels a year to German customers, at a rate of approximately 11,000 an hour. Hermes also manages delivery for QVC’s customers in Austria and the U.K.

Guthy-Renker, another U.S.-based Hermes retailer client that sells mainly beauty, skincare and wellness products, operates a distribution center in the Netherlands, where it uses Hermes to ship its products to customers in Germany and Austria. As an alternative, Guthy-Renker customers also can choose to have their parcels sent to one of approximately 14,000 Hermes ParcelShops in Germany and 1,500 ParcelShops in Austria.

“Reliability and quick delivery are the main ingredients for satisfied customers,” says Matthias Epp, managing director of Guthy-Renker. “With Hermes we can be sure that an average of 80% of our packages will reach their recipients within one day upon leaving the distribution warehouse.”

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