Vienna-based byrd, a tech-driven third-party logistics and fulfillment startup, has been attracting serious attention in recent times. Indeed, Tech Crunch has even referred to the company as “an alternative to Amazon” as far as fulfillment in Europe is concerned.
byrd is receiving more investment every year, netting $5m in its Series A investment round in its first year, followed by a $16m Series B in 2021 and a $56m Series C this May.
The company has ambitions to build the leading e-commerce fulfillment platform in Europe, and sports integrations with WooCommerce, Amazon FBM, Shopify and Prestashop among others.
Eager to get the inside track on byrd’s development and future plans, we reached out to Chief Commercial Officer and Co-Founder, Petra Dobrocka.
In this Trans.INFO exclusive, Petra talks about where byrd is on its journey as a company, how the business will use its investment funds, as well how Brexit has influenced cross-border fulfillment. There was also time to touch on technical issues such as the development of byrd’s WMS, and the challenges of making platform integrations.
Thanks for taking the time to talk to us Petra. byrd appears to have come a long way since its foundation five years ago. It is stated that your original aim was to build your own network of physical warehouses before turning to a software-led approach based around scaling up and down warehouse space according to customer need. Where are you on this journey at this moment in time, and what opportunities for growth lie ahead?
We’re entering the fourth year of working completely software-led and operating our virtual warehouse network, sending hundreds of thousands parcels every week.
At the moment, we fulfill from 25 warehouses in 7 European countries (Germany, Austria, United Kingdom, Netherlands, France, Spain, Italy) and will add a few more fulfillment centres still this year in order to manage the peak season.
On the one hand we see lots of growth potential within our existing markets such as for example France, the United Kingdom, Italy and Spain. As we extend our service offering, we are convinced that we will also have opportunities to further grow in those countries.
On the other hand, we aim to obtain a foothold in Northern and Eastern Europe, in which we don’t offer storage and fulfillment solutions at the moment.
So to sum up, our growth opportunities lie within the service & product offer expansion as well as the geographic expansion.
Last year, you said byrd’s intention was to build the leading e-commerce fulfillment platform in Europe. What are key factors byrd needs to excel in so as to achieve this goal?
In our opinion, there are going to be three key success factors.
One is generating above-average CLTV for our retailers thanks to outstanding end consumer experience.
There are several factors that play into this but generally speaking, our no. 1 goal is always to generate value for our client, the retailer. Consumers will return more often, if they have a great customer experience, for example thanks to a very transparent order tracking process, a super fast delivery or an outstanding unpacking experience. All these are factors that we aim to excel at.
In order to achieve that, we are putting a lot of effort into adjusting to local market requirements. This also means that we are building the right integrations with e-commerce systems, marketplaces and carriers in order to attract merchants and launch tailor-made service offers in different countries that meet consumer expectations.
Next comes leading in scalability and efficiency through warehouse interconnectivity.
Once our retailers start growing internationally, a big challenge is to expand while keeping a great level of service but also efficiency. Our network is ideal to ensure this across all fulfillment locations.
We allow our customers to scale across 1, 2, or 7 markets and in the future even more without any additional effort. At the same time, we can even use those various locations to optimise the process further and always find the most efficient fulfillment and shipping option for the customer. This is making our solution extremely valuable especially to fast growing, international companies and we plan to develop it even further.
This also means that we need to continue building a strong network of logistics partners who are reliable and efficient in their operations, so that we can enable the best-possible service for our customers.
The third factor is execution with an international team.
In order to gain and also retain merchants across countries, we need to further build an international team that can execute our vision by adapting to local needs.
In May, you announced $56 million in funding courtesy of a Series C investment round led by Cambridge Capital. What are the key areas in which byrd will allocate these resources?
The new funds will be used to strengthen our presence in existing markets by expanding the local teams, expand to new markets and enlarge our European fulfillment network.
We also plan to hire more talent for R&D to further expand our capabilities in terms of product categories that we can fulfill.
I read that when you started serving your first customers in Austria, it became apparent that most fast-growing e-commerce companies would benefit from warehouse locations in other international markets. To what extent have you been able to utilise cross-border logistics within the schengen area to the benefit of your customers?
Our cross-border logistics solutions are becoming increasingly popular amongst our customer base as many of the merchants have grown their business since they started with byrd.
As a consequence, those customers are now looking for ways to expand their business to new geographical locations and are subsequently adding more warehouses to their setup.
Another factor recently when it comes to cross-border logistics and fulfillment in Europe has been Brexit. How has that changed the dynamics of your operations? Have you been able to utilise warehouses in Europe for the benefit or exporting retailers based in the UK for example?
Brexit had two major effects on demand.
Firstly, merchants from the United Kingdom reached out to us to open a warehouse on the European mainland in order to optimize reduce delivery times and costs.
In addition to that, retailers from the European Union, also some of our customers, decided to move part of their inventory to our warehouse in the United Kingdom in order to minimize the shipping and delivery costs.
As a consequence, we benefited from Brexit if you look at the increase in demand. Nevertheless, it is also worth noting that some merchants faced issues with deliveries going to the warehouse in the United Kingdom, because of significant delays at the border which were partly due to non-compliance with the new customs regulations.
We were trying to support our customers as much as possible, however it was definitely a challenge in the beginning.
So much of what you do involves integrations with systems of all shapes and sizes. How have you managed to facilitate these integrations in what appears to be a short period of time given the technical challenges involved? Are there any technologies in particular that can make the process of these integrations that little bit easier?
Actually having integrations with different shops and carriers is quite a challenge as every system has particularities and they are never the same.
The crucial success factor is building a solid infrastructure that enables us to have a standard interface to manage transactions with multiple carriers. This as a consequence helps us to add integrations with new carriers much easier.
The same is also true for e-commerce and shop integrations for which we established a robust architecture that allows us to add customization to shop integrations depending on our customers needs.
But of course we are always trying to improve and we have plans on how to enable even more customization options to different shops while maintaining an architecture that enables us to connect seamlessly with new systems.
Warehouse Management Systems are developing all the time to meet the evolving demands of the sector. byrd of course has its own proprietary WMS. What improvements are you working on with the WMS at this moment in time?
At the moment we are working on enabling the fulfillment of additional product categories.
As an example, we just released serial numbers tracking for electronics. As a next step, we will invest more effort into unlocking fashion by implementing chaotic storage.
More general topics of interest are warehouse automation with regards to picking and packaging to increase efficiency. In addition to that, we believe that the amount of data we collect in combination with the warehouse interconnectivity, will enable us to intelligently split and reallocate stock across warehouses, depending on the expected order volume of our customers.
The world of logistics and fulfillment is always striving to make efficiency gains, even when it may seem like everything’s been done already. In your view, what can bring about the greatest improvements? Is it software development, automation and robots in warehouses, or perhaps something on the logistics side, whether it be in the middle mile or last mile?
We believe that there are three main leverages that will cause significant improvements over the next years.
The first is the usage of robotics and other automation in warehousing. For a wide range of products, this can lead to considerable efficiency gains. This will reduce pick & pack time, reduce costs and improve the fulfillment quality.
Second, there’s big data & AI. In general, the collection of data in combination with artificial intelligence, will help us to improve the supply chain in the long run. This will ensure that forecasting and reordering products will become even more accurate, for example by being able to predict the inventory requirements of a retailer for the upcoming product launch.
Finally, there’s last mile logistics. At the moment, the last-mile logistics processes are not optimized – they still cause too many emissions, even if you have the possibility to offset emissions.
Moreover, the delivery process is not always user-friendly and has a lot of room for improvement. As a result, we can expect that technology (e.g. robotics) and process innovations will help to improve the e-commerce operations process and customer experience.
Besides efficiency, which has always been the case, consumers are now also mindful of sustainability. Ecommerce platforms and retailers are thus also conscious of carbon footprints, not least when it comes to the fulfillment of orders. Given the integrations, logistics partners and technology at your disposal, is byrd in a position to be able to assist its clients in being able to offer environment-conscious consumers with a more sustainable fulfillment option?
As a company we believe that sustainability is an integral part of our business. This is why we’re also offsetting our carbon footprint every year and are continuously looking for ways to reduce it. During Christmas time, we also planted trees in the names of our customers in order to offset some of their emissions caused during the peak season.
Moreover, we also encourage our warehouse partners to act more environmentally friendly and some of our logistics partners are putting in a lot of effort in order to do that. You can read more about it in our ebook.
In addition, we offer climate-neutral shipping options via certain carriers like DHL, DPD, etc. that can be used by our merchants in order to offer sustainable shipping options to their online shoppers. In the future, we want to increase our range of sustainable fulfillment & shipping services to be in a position to offer climate-neutral e-commerce fulfillment to our customers one day.
You can read more about this in our ebook about Sustainability which you can find on our website.