November 1999 | Case Studies | I.T. Toolkit

Will E-Commerce Deliver Holiday Demand?

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A cornucopia of new logistics IT solutions offers much to be thankful for this holiday season.

Here are some new logistics IT solutions that offer much to be thankful for in the world of supply chain management.

Dreading the avalanche of post-holiday returns? Both OEM and end-user communities in the electronic products industry can access www.3RE.com to manage high-volume returns. Previously named Logistics Management@Internet, 3RE.com, Memphis, Tenn., provides hub-based off-site logistics solutions via Internet connectivity. Positioned to serve small and medium businesses, as well as large manufacturers and end users, 3RE.com provides return management repair and remarketing; e-commerce with build-to-order and configure-to-order capabilities; sales demo management and fulfillment programs; and advance exchange and warranty fulfillment.

Is product packaging a concern? Visit www.PackAid.com and share your insights into what is needed to better address this aspect of distribution. Projected to become a neutral web site for providing information and direction to help buyers understand options within the packaging industry, PackAid.com is gathering feedback from buyers and sellers during its current construction phase.

Chilled to Perfection

CS Integrated LLC (CSI), Secaucus, N.J., a provider of logistics services for the temperature-controlled food supply chain, offers a value-added, web-based service at no charge to its customers. An interactive, secure site, trak[it] lets customers obtain inventory status, confirm customer order status, place orders electronically, track distribution and order fulfillment in real time, and generate online reports that reflect real-time information 24 hours a day.

"We work with food manufacturers and retailers representing the full gamut of temperature-controlled products," says Don Wojtal, CSI's first v.p. of information technology. "Trak[it] allows customers to modify orders in process potentially up until the time the order leaves the dock."

The expansive functionality of trak[it] empowers customers to search and identify information by product, lot, order, manufacturing date, or consignee. Wojtal compares the services afforded by trak[it] to an insurance policy—if inventory is recalled, the ease of locating and identifying products could save millions of dollars.

This level of visibility and accuracy is critical in an industry where safe handling practices are becoming a monumental concern and liability. As retailers and manufacturers continue to source from multiple suppliers, the technology to allow for "one- stop-shop and monitoring" will become increasingly important.

Wojtal expects that the capabilities of trak[it] will soon be utilized to provide information on all of a customer's vendors, even though it will mean sharing a competitor's information.

"The large retailers will demand information sharing across the supply chain because it will provide them with one complete picture to better manage resources and analyze key performance indicators on every supplier," he says.

CSI, an affiliate of ProLogis, Denver, operates 31 refrigerated warehouses encompassing more than 169 million cubic feet in the United States.

'Tis the Retail Season

This promises to be the "coming of age" moment for retailers selling online, with holiday sales projected to soar and retailers assuring every Santa order that their elves will deliver with rapid efficiency. To say that many retailers are naive in their understanding of the logistics required for processing, distributing, and fulfilling e-orders is a gross understatement.

Dave Bruno, product manager at GERS Retail Systems, San Diego, anticipates that many retailers are waiting until after the holiday crunch in their brick and mortar locations to address the logistics infrastructure of supporting web site sales. However, he shares that many of his customers report "staggering growth in e-commerce, with sales jumping from six transactions to more than 80 transactions a day, with the retailer doing nothing except posting a web site and making online purchases an option."

The difficulty with e-commerce is not securing the orders (post it and "they will buy"); the challenge is delivering on the promise. It's a challenge that retailers will be hard pressed to meet if all they are using are traditional fulfillment processes. And, this is a promise that once broken will be hard, if not impossible, to amend.

"The most important aspects of retailing online are customer service, engendering trust, and delivering on the customer's expectations," states Bruno. "Customers want transactions to be safe, easy, and quick."

Citing a recent report, Bruno says only 33 percent of potential shoppers perceive online transactions to be even somewhat safe. "The more people learn to trust e-commerce, the more they will buy," he says.

Nowhere is the adage "seeing is believing" more apropos than in the world of virtual commerce. When customers can't touch and feel the product, it's even more important to have a positive purchasing experience. The interactive, real-time communications afforded by web-based protocols make it easy for retailers to literally walk their customers through every phase of order processing. The best web retailers are those that confirm order receipt via an instantaneous follow-up e-mail, then continue to send notifications of order progression or exceptions through the order life cycle to confirmation of final delivery. Retailers that "take the money and run," without following through on the customer service side, will find that e-commerce brings more harm than benefit to their brand.

"Retailers must have processes in place to ensure follow-up communications and timely order fulfillment," says Bruno. "Our team is ideally suited to help brick and mortar or catalogue retailers, as well as retail newcomers starting on the web, improve processes and implement new systems against existing processes. We've created a consultative environment with almost 90 percent of our staff coming from retail backgrounds."

With the GERS e-Commerce Solution Suite, retailers will have a complete front-to-back automation package that includes web store design, product catalogs, shopping carts, fulfillment (with pick, pack and ship capabilities), and customer service. Partnered with Wyse Interactive, GERS provides comprehensive and creative marketing communications support to help merchants generate online traffic. The software package from GERS fully integrates differentiating web store features including customer service and call center operations, customer profiling information, shipping instructions and status, and online payment processing.

"Web customers are demanding; they wait only eight seconds for a page to load before clicking to another site," warns Bruno. "It would be better for retailers to establish and meet realistic customer expectations than fail to deliver."

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