Dotcommonsense about distribution
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T the real sharp end of the new dotcom glamour industry, things continue as they always have. Despite their ethereal nature as cyber – sexy companies selling airwaves and digital space, dotcom companies and e-commerce experts are just as dependent on customer service, distribution efficiency and supply chain management as any ‘metal-basher’ or other traditional industry.
The problem is that, in some instances, the e-commerce companies don’t seem to have learned that lesson yet.
When The Sunday Times invited readers to submit their personal e-commerce experiences of purchasing from websites, “people responded in droves, with hair-raising stories of missing goods, credit-card rip-offs and lousy customer service” said writer, David Hewson in an article headed Can The Web Deliver? Hewson added “kind words were very much outnumbered by the gripes. Large and small, dotcom companies seem proficient at erecting sites designed to take your orders, but downright rotten when it comes to delivering the goods.”
According to market research analyst, Verdict, which carried out a survey into the £17 billion e-retailing market in the UK, the biggest problem facing this sector is not the product offering, but delivery and customer service. The dotcom companies have made “little or no investment into ensuring that customers get what they want, when they want, where they want and how they want,” says the report.
These are issues of storage, product handling and distribution, plain and simple. As Hewson concludes, “too many e-tailers seem obsessed with the technology of their websites and dismissive of the mundane business of putting goods in boxes and dispatching them.”
As the recent collapse of share prices in the dotcom sector demonstrates, however, nobody is above the law of market economics, and customers will vote with their credit cards when service does not come anywhere near to matching the promise, leading to
a rapid bursting of the e-commerce bubble. So what do web-based businesses need to do to get it right? The key point for e-commerce success is to invest in the technology to handle orders and deliver the goods before accepting orders that cannot be fulfilled. Jacqueline Munro-Foley of Kitbag, a company quoted in the Sunday Times article, said, “we know we got it wrong in the past and have learned from those disgruntled customers. Now, they only debit credit cards when goods have been despatched, and have also introduced a customer service team to deal with any problems.
Once this basic requirement has been taken care of, the next point, to ensure profit, is to get the goods out and delivered to customers asap. Here again, new companies can learn from all others who have developed techniques to ensure just that.
The website must be the next step, not the first step. The new electronic companies may be media-sexy and Tony Blair’s bright young things of the business world, but without effective distribution, they are nothing.
As Hewson says in his Sunday Times article, of the overriding customer dissatisfaction with web-based trading: A single series of events summarises the most common complaint. You go to a website, see something you want to buy and place an order. The company charges your credit card. And then you wait. Sometimes the wrong goods turn up, sometimes half the order. Usually, though, you receive nothing and it is impossible to provoke any kind of response, by ‘phone or e-mail.
It needn’t be this way. Indeed, it must not be this way because – despite the glamour of the e-commerce industry – every single company will crash if it cannot deliver the goods and keep its customers happy. It is exactly the same lesson that the ‘old tech’ companies also had to learn. The warning is clear: do not get carried away with websites before considering the basics and installing the right equipment to ensure delivery. U
This article is based on a paper presented by storage and handling equipment
specialist Dexion.
