dm uses LOXXESS smart logistics in e-commerce

14. January 2020

Pharmaceutical company dm is expanding and building out its service portfolio in e-commerce. After four years of growth in online retail, the company will also set out to achieve an expansive online business in 2020. E-commerce is growing in significance. Seamless logistics are crucial for market success. To achieve this, dm uses logistics and fulfilment services provider LOXXESS.

For dm-drogerie markt GmbH, online retail is becoming more and more important. The retail company started its e-commerce business with 9,000 items, and the range of items had already increased to 14,000 products in 2018 and reached the milestone of 18,300 by mid-2019. Meanwhile, revenue from online retail at dm is in the hundreds of millions, and the pharmaceutical trader also wants to strengthen its reliance on e-commerce in future.

Christian Bodi, the dm managing director responsible for departmental logistics, states the following on their e-commerce strategy: “Over the last few years, dm has expanded online trade based on the needs and requirements of our customers. This also involves a forward-thinking focus on omni-channel retail. Our e-commerce sector has seen strong growth as a result.”

In particular, seamless logistics have been crucial for the success of dm’s e-commerce business. dm has been using Unterföhring-based logistics and fulfilment services provider LOXXESS AG since 2017. LOXXESS operates a multi-user campus – which specializes in a number of areas including e-commerce logistics – in Bor near the Czech Republic border on behalf of dm.

To respond to the specific challenges and requirements of the increasingly complex e-commerce logistics, LOXXESS developed the logistics concept SMILE (SMart and Innovative – Logistics for E-commerce) at this site in 2019. The challenges faced by this concept, alongside an ambitious realization timeframe of just six months, were primarily the magnitude of volume growth coupled with peaks in demand. During this collaboration, dynamic growth in the quantities to be processed could be recorded each year. Assuming a significant start-up quantity, this growth corresponds to a 5-times cumulative increase.

The logistics service provider overcame the challenges using a combination of artificial intelligence, automation and employee integration. Warehouse processes can be managed efficiently with the help of implemented software: accumulated real-time data is systematically used to optimize warehouse topology, travel paths and flow of materials. Thanks to logistics solution SMILE, the family business became one of three finalists of the German Logistics Prize 2019 alongside major corporations BMW and Airbus.

dm is convinced by the positive outcomes of SMILE. “For our online business, we need innovative logistics solutions. Our partner LOXXESS was able to further optimize processes in our online distribution centre and shorten turnaround times through the use of artificial intelligence. This has enabled us to come together to deliver even better services for our customers,” says Christian Bodi.

The logistics company itself is specifically working to further leverage the potential of SMILE. Dr Claus-Peter Amberger, chairman of LOXXESS, comments: “The demands of logistics-oriented online trade are great. With the SMILE project, we’ve shown that we can step up to the challenges of e-commerce. We are especially pleased that dm will use LOXXESS in future and will continue our productive collaboration. We are already laying the foundations for the successful completion of future collaborative projects by continuing work on SMILE.”