Survival of the Fittest: Have you evolved to keep up with the ecommerce revolution?

Online retailing is revolutionising the way we shop, with almost 20% of every non-food pound spent online by the end of last year. But with revolution comes evolution through changes in behavior, service and technology. We caught up with Simon Tomlinson, business director of UK logistics and supply chain consultancy The Logistics Business, to find out how businesses can differentiate and innovators shine in the ecommerce market. 

“In the early years high street names, small businesses and even specialist online stores either ran their e-fulfillment as a separate operation but replenished as they would a traditional retail store, or integrated into a conventional store replenishment warehouse. In most cases neither proved particularly successful.  Only the smartest and most forward-thinking recognised the fundamental differences - most notably that when a customer adds an item to their basket online they imagine it to be no different to doing the same in the real shopping world and hence believe that product is now theirs. If the online retailer then replied that the product was out of stock or failed to deliver in the promised time, the customer was naturally disappointed.”

“In the beginning having goods delivered to your door was an event worthy of note.  Several years down the line, and millions of parcels later, hanging around to sign for goods or visiting the post office to pick-up missed deliveries has become a chore and, as a consequence, an opportunity for differentiation.

“Some have risen to the challenge by offering click and collect services. Their popularity has exceeded all prediction, and now accounts for up to 75% of some retailer’s sales. It has further advantages in that it drives footfall into stores and, possibly as a result, few retailers are asking if it is really what customers want. For some the convenience of click and collect is clear but for others its attraction is much more the fact that it is free and predictable. When, through promotions, retailers make home delivery free, click and collect volumes fall dramatically. More worryingly, if click and collect continues to grow at its current rate, store collections will become unmanageable leading to poor customer service.”

“Home delivery is getting better but delivery times have to be more predictable.  Timed slots are being offered by more companies, although for most this service is still too expensive and more carriers are happy to have parcels left in convenient places such as sheds and greenhouses. It’s not enough to get goods to the door intact any more, now its about getting them to the customer when it’s convenient and on time, every time. And as choice has gone up, tolerance of slip-ups, delays and damages has gone down.
 

“From a retailer perspective all this demands better stock control, ultra efficient pick and pack, failsafe packaging and reliable delivery services – and the latter point, delivery, is one which many business choose as a key point of differentiation.

“Our most recent research shows that in a world where next day delivery has become synonymous with mail order efficiency and service, consumers increasingly value free, predictable services most highly. They shop online for a variety of reasons, with convenience and choice being top of the list.  While speedy, efficient service is important, immediacy isn't necessarily the premium measure for all consumers. Increasingly, predictable timed delivery before or after-work, or during a tight window at the weekend, is a sought-after option. People don’t want to be waiting in all day for a delivery; they’d prefer to know when their items are going to be delivered.

“Whatever delivery commitment retailers make, the golden rule is to honour those commitments every time without fail, and that means superb organisation behind the scenes. Without a streamlined warehouse operation and a highly efficient pick-and-pack, that’s extremely difficult to do.”

Martin Richards, Automated Packaging Systems mail order fulfillment specialist agrees.  He’s compared data from small-scale, retailer-own and third-party logistics fulfillment operations and confirms packing speed and consistency are key to meeting mail order commitments.

“With an all-in-one mail order fulfillment bagging system, operators can pack up to 360 bags per hour, compared with 40-80 bags per hour manually. With speed comes flexibility which is key to fulfilling delivery commitments.”

Visit the Mail Order Fulfilment page for full details on the system.

 

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