Leading home-grown tea retailer, T2 Tea, experienced a 120 per cent growth across its digital sales channels in 2019 and as a result needed to rethink its WMS provider. MHD sits down with the technology and logistics team to find out more.
Australian tea retailer, T2 Tea, opened its first store in Fitzroy, Melbourne in 1996. Two years later the tea producer opened its second store in Chadstone, by Christmas that year both stores had sold entirely out of stock, as the company became more and more popular.
Before long, the gourmet tea business found itself operating 40 stores across Australia and New Zealand. In September 2013, Unilever acquired the tea producer in a multi-million dollar agreement, with the view to transform the chain into a global business.
T2 Tea is now one of the world’s largest tea retailers, with more than 90 stores worldwide, including 60 shops in Australia and New Zealand. The innovative retailer also offers a number of additional ways to shop the brand, including via various digital marketplaces, resellers, grocers, cafes and direct to consumer via the global T2 website.
According to T2 Tea, it’s in the organisations DNA to do things different. It was born out of a desire to be unlike anything else and prides itself on being unique and individual.
Innovation is a core value of the business, especially when it comes to ensuring that its customers get the very best products in the most timely and convenient way possible.
T2 Tea has seen its customers move towards its digital sales channel offerings over the last few months, with the company reporting an increase of up to 120 per cent in 2019. “We’ve seen a massive shift to e-commerce in the past twelve months and we are expecting this to continue, with a projected 20 per cent year-on-year growth into the future,” Rohan Penman, Global Head of Technology at T2 Tea says.
The company runs its logistics and warehouse operation out of Laverton North in Victoria, and from this site it services all of its retail stores in Australia and New Zealand as well as its wholesale, marketplace and e-commerce operations.
“We’ve got around 5,000 to 6,000 pallets in our Laverton North site, and approximately 1,400 SKUs. We operate with around 20 to 30 staff at our lower periods and then around 100 plus when we are meeting peak period demands,” Aaron Calleja, Business Analyst at T2 Tea says.
Servicing e-commerce growth
As the business started to see growth across its e-commerce offering, it struggled to keep up with consumer demand.
“For us, it really was a J curve in terms of growth in e-commerce, and we were struggling to get our goods out the door quick enough. Especially with regards to meeting demand during events like Singles Day or Black Friday. It was taking us quite a few days to catch up on our orders,” Aaron says.
T2 Tea was operating a Warehouse Management System (WMS) that was nearing end-of-life and used this opportunity to rethink its logistics and warehousing operations.
“We were using a product that had ongoing issues, it was an old solution that was not fit for purpose. When the provider made the decision to stop offering this solution, we started the process for looking for a new WMS,” Aaron says.
T2 Tea first started looking for a new software provider in October 2018, and after considering all the solutions available in the market opted for HighJump’s Warehouse Advantage solution.
“It was a very close call for us but in the end, we found that the HighJump offering was exactly what we were after,” Rohan says.
Set for the future
T2 Tea made the decision to go with HighJump’s solution at the end of 2018 and started the project with one of HighJump’s Australia-based implementation partners in February 2019, the project then went live in June 2019.
During the WMS selection process, T2 spoke with fellow Australian retailer Adore Beauty, who has also implemented the HighJump WMS offering. “We were lucky to chat with the team at Adore Beauty who are fulfilling thousands of orders a week, they have had a great experience with the HighJump product and this really gave us the confidence that we would be able to meet the demand that we are forecasting for the e-commerce part of the business,” Rohan says.
“The team at HighJump have been great in terms of flexibility, guiding us around best practice and providing creative solutions. Both HighJump and its implementation partner, iWMS, have been very supportive and helpful through the entire process,” Aaron says.
Aaron also recently attended HighJump’s Elevate Conference in Orlando, Florida and says that it was great to see so much technology on offer. “We’re very interested in voice and automation and how that can help us meet demand further into the future, and it’s great to know that the HighJump product will allow us to utilise these kinds of technologies,” he says.
The HighJump solution was originally designed to deliver over 10,000 shipments a week, which Aaron says is modelled around T2 Tea’s busiest periods.
“It’s certainly streamlined the e-commerce picking and packing process. We’re getting efficiency gains of 30 per cent for our e-commerce picks and for general replenishment we’re still getting around 10 per cent efficiency again even though the process has remained much the same,” Aaron says.
According to Rohan, the key for this implementation was to achieve those efficiency gains around e-commerce. “This is where the business sees a growth channel and this software has opened so many doors for us around flexibility and efficiency,” he says.
T2 Tea opted for HighJump’s cloud offering, which according to Rohan has presented the business with a number of benefits around risk management and scalability.
“By utilising HighJump’s cloud offering, we now have greater confidence in our infrastructure. When it comes to infrastructure on premise, there is the increased risk of downtime due to outages or issues with the infrastructure. We know, that by using HighJump’s cloud offering, that there is a greatly reduced risk of an outage.
“If you have an outage in the warehouse, it can cost you more than you realise because you’re not shipping and not utilising your WMS. That downtime can be really significant, especially when you’re experiencing a peak in demand. By moving to the cloud, it’s essentially like having an insurance policy against this kind of loss in productivity and profitability,” Rohan says.
With HighJump’s cloud option, the solution and infrastructure are managed and supported by the software provider, giving T2 Tea the added benefit of ongoing support from HighJump.
“With the likes of Black Friday and Singles Day, where you have a huge uptake in sales and volume, when your infrastructure is on the cloud you have the sense of confidence that the solution will scale up accordingly. It’s basically unlimited scalability,” Rohan says.
HighJump’s cloud-first initiative was launched three years ago and is called HighJump Now. The software provider has seen a considerable move to cloud-based infrastructure and provides solutions across a number of global cloud-based providers, with global agreements currently in place with Amazon Web Solutions and Oracle Cloud Infrastructure.
Over the past three years, seventy percent of HighJump’s new customers have opted for cloud-based solutions. Additionally, there has been a twenty percent year-on-year uptake in conversions of of HighJump’s long-term customers to a HighJump hosted service. HighJump has been a leading provider of hosted WMS solutions for over ten years and has built a deep domain expertise in this field.
Personalisation and customisation
Another area of development for T2 Tea is the ability to offer personalisation and customisation for its online consumers and HighJump will also support T2 Tea in this.
“We’re ready for when we want to do some quirky things around customisation in the future. We haven’t quite finalised what that will be yet, but this WMS is very flexible and offers us the opportunity to add a value-added service lane so we can have some fun with our e-commerce offering,” Rohan says.
This project is part of a larger strategy for the retailer and according to Rachel Chaloner is the first step in the organisation’s strategic road map. “This was a big piece in the puzzle for us, to make sure that we get more efficiency out of our warehouse and distribution. We’re also in the process of upgrading our website and the WMS is absolutely critical to that initiative. We wanted to make sure our warehouse was operating as efficiently and effectively as possible and I’m happy to report that it’s so far, so good,” she says.
HighJump boasts a portfolio of a number of leading retailers worldwide, with more than 4,400 businesses using its software solutions. According to HighJump’s Director of International Sales, Jamie Sterling, T2 Tea was a great company to work with. “We’re thrilled to have the opportunity to work with such a recognised Australian brand and innovative retailer. The growth that T2 Tea is currently experiencing is setting it up as one of the world’s leading boutique tea retailers and we have enjoyed developing a solution that will offer them efficiency gains, while also offering flexibility around peak times. We worked closely with the team to deliver the project to a tight timeframe and ensure that they are ready to meet the projected demand across its e-commerce offering over the next few years. At HighJump we are extremely proud to call T2 Tea a partner and I look forward to working with the T2 Tea team into the future,” he says.