Secure boxes for home delivery or retail pick-up points

The single biggest factor holding back the e-commerce revolution, said the experts, was the inconvenience of having to stay at home to wait for deliveries.

So the new breed of e-fulfilment companies, allowing retailers to deliver goods whether or not customers are at home, should have been laughing all the way to the bank.

However, 18 months down the line, those who haven't run out of cash concede it is taking somewhat longer than they thought to spread the e-fulfilment gospel.

Retailers agreeing to act as pick-up points for goods ordered over the net have seen at best a disappointing trickle of parcels going through their stores, and at worst, none at all.

Meanwhile, unattended home delivery boxes' hi-tech wheelie bins attached to properties to take online purchases have as yet failed to progress much beyond small scale trials inside the M25.

So is e-fulfilment another e' word heading for the dustbin of history? All sides agree the logic underpinning the concept is compelling, carrying the promise of a 100% delivery success rate for retailers and putting an end to waiting in for deliveries or a trek to a sorting office for customers.

But as it becomes increasingly clear that the e-fulfilment revolution will be more of a marathon than a sprint, the real question is whether the pioneers in

the field have the stamina and the funds to stay in the game for the long

haul.

Hippobox maker Giraffe Marketing, which plugs its box as the simplest and cheapest solution for a wary public and cash strapped e-tailers, admits extravagant claims were made in the beginning. Giraffe founder Charles Gallichan says: "There was a lot of fanfare and silliness from some quarters. Let's face it, no one was going to sell half a million of these boxes. We never thought, and we certainly never claimed, that we would get a sniff at anything like that. You've got to be in this for the long haul."

Given that venture capitalists expect a 300% return on their investment within three years, it's not surprising some start ups have been a little ambitious with their sales forecasts in order to get their projects off the ground, he adds.

Unlike other firms in the field, Giraffe does not charge retailers for delivering to its hippobox, designed and manufactured by partner Chubb Safes. Instead, the customer pays a one-off fee for the box which comes in several different sizes and a key. After manufacturers, retailers or delivery agents have deposited the goods, the lid snaps shut and locks. Although the system does not allow for multiple deliveries, Giraffe doesn't require a customer subscription or a pin access code and relies on the fact that most people are waiting for only one delivery at any given time. Giraffe has sold boxes to customers in Aberdeen, Plymouth and the Channel Islands as well as the usual suspects within the M25 and along the M4 corridor, although, like its competitors, the company is unwilling to disclose any figures. "We've sold a reasonable number," says Gallichan. "And we've probably got another year to go before the figures really start to rack up, but within four years, they will be everywhere."

More hi-tech competitors say carriers will refuse to deliver to a box that doesn't provide proof of delivery. However, Gallichan says Giraffe is happily conducting business with wine companies, e-tailers selling bulk items like nappies, and companies selling books, CDs and clothing.

Rivals Bearbox and Home Delivery Access generate unique pin codes giving carriers access to boxes or component parts of properties, such as porches and garages, providing electronic proof of delivery to all parties via text message or e-mail. Customers can still deal with unregistered suppliers or friends and relatives wanting to drop things off safely by issuing them with pincodes.

Unlike rival Homeport, which has been conducting protracted trials in central London with Sainsbury, carriers do not have to collect the box after the goods are removed.

The technology underpinning the system is flexible enough to be tailored to a variety of solutions, from boxes outside houses, to smart locks' providing access to properties or even built into the side of buildings. Both parties are working with developers to incorporate the system into new housing. However, they believe the real moneyspinner will be in the b2b arena and are actively targeting businesses with mobile employees, such as service engineering and IT support companies, that need to get tools or samples to sales representatives or field engineers.

For others, picking up online purchases from the local c-store is preferable to extracting them from a large unsightly box pinned to the side of the house. This system is well established in France, where 60% of deliveries from mail order companies are taken to c-stores and other outlets.

Collectpoint was one of the first companies to push this model in the UK, and has built up a substantial network of pick up points. More than 3,200 stores, and more than 80 e-tailers, including the Gadget Shop and QVC, signed up to deliver goods to the customer's nearest Collectpoint store.

Collectpoint sales and marketing manager Dillon Dhanecha admits progress has been slow, but insists e-fulfilment via the Collectpoint model is a "value adding proposition" for retailers, who receive a handling charge for every parcel processed. "It's a win win situation for c-stores," says Dhanecha. "There are no costs associated with joining us. Yes, it's a waiting game, but then you've got nothing to lose."

Like HDA and Bearbox, he is confident the b2b side of the business will prove the most lucrative, with sales reps and service engineers collecting tools and samples from their nearest Collectpoint instead of a distant depot.

Given the infancy of the market, the arrival of a major player such as Consignia into the e-fulfilment arena is probably a good thing for everyone. More than 18,000 post offices and sub post offices are acting as pick-up points for its new Local Collect service, and 3,000 parcels move through the system each day. Over 100 e-tailers are represented on Consignia's home

shopping site worldofshopping.com and more are due to come on board this

year.

However, the only company claiming to be making a profit out of e-fulfilment is London based Urbandrop, which has a distribution centre just south of Tower Bridge.

Here, freight is consolidated from companies like ANC and Business Express and distributed to a network of 400 independent retailers in the London area. Consumers are alerted by email, text message or phone that their goods await collection. The company also has arrangements with postal services to have parcels sent from urbandrops to any UK destination by the following day.

Sales manager Gail Wickes says plans are being hatched to move outside the capital into Birmingham and Manchester, where the company has already set up networks of urbandrops and identified sites for warehouses.

Spar is also convinced that e-fulfilment could prove an important footfall driver and incremental income stream for members and recently began talks with Argos Retail Group about a possible partnership. Retail development controller Barry Wallis emphasises that discussions are in the early stages, but a tie up might involve ordering goods from ARG subsidiaries via Spar's instore Smart Shopper kiosks and having them delivered to local Spar stores.

The problem inherent in the c-store pick up model however, is that to achieve critical mass, several thousand stores must be recruited as pick-up points.

Likewise, it is not suitable for handling groceries because products cannot be temperature controlled and may conflict with the goods being sold in the local store.

Conversely, while unattended boxes are more suitable for groceries, grocery e-tailers like Tesco.com are concerned about maintaining the integrity and temperature of products left for hours outside properties.

Those selling unattended home delivery boxes say anything that entails a trip to another store to collect remote purchases defeats the purpose of home shopping which targets those without the time or inclination to make a trip to the shops. Bearbox marketing director James Bates says: "If you drive past the pick-up store every day, that's fine. But if not, where's the convenience in that?"

HDA's David Philips is convinced that systems enabling carriers to deposit goods safely at customers' homes will win the e-fulfilment war. "If you have to pick your order up from a local store, you might as well go out and buy it," he says.

However, Datamonitor analyst Mike Philips insists e-fulfilment is one e' word that is here to stay. "The collection point model removes the most significant obstacle to b2c e-commerce fulfilling its massive potential the troublesome last mile. Collection points attract high value customers to parcels kept in a rear storage area. This is a low cost, simple and effective way of increasing footfall and capturing new revenues."

Conversely, Verdict's Sally Bain says research reveals online shoppers prefer "home oriented" delivery options, although there is probably no single winning solution: "No one approach will fit all permutations and a number of alternatives will prevail."

So what future for e-fulfilment? While market researchers' predictions of the size of the online shopping market in five or 10 years vary, there is no doubt that more goods are being purchased on the internet, and tackling the last mile will become even more critical. The question is, do the e-fulfilment pioneers have deep enough pockets to stay around to enjoy the rewards when they come?