Customers still first in e-commerce, firms told

9 March 2000
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09 March 2000 | Elizabeth Bellamy

Logistics operators entering the world of electronic retailing have been warned to focus on customer service and worry less about technology.

Gerry Murphy, group chief executive of logistics group NFC, said logistics would be a core element of electronic retailing, or "e-tailing", and that the sector's degree of involvement with e-commerce would soon double.

But he called for companies to be mindful of the "real issues", such as the effectiveness of delivery systems. "It is still a physical world," he told a Freight Transport Association (FTA) conference in London last month.

Mick Jackson, head of logistics at the FTA's industry group, agreed. "You can invest as much as you like in an upstream supply chain solution," he said, "but if you don't get the ultimate delivery right, customers won't shop with you again and you fail."

While supporters of e-tailing have claimed that home shopping will reduce traffic congestion as shoppers abandon their cars, Jackson said its environmental impact would be mixed. "On the one hand, there could be fewer cars on the road, but on the other, the number of freight trips could increase faster than the number of passenger trips decrease," he said.

Philip Mengel, chief executive of English, Welsh & Scottish Railway, said he did not believe suburban roads would become increasingly clogged by delivery vans, but added that e-tailing had "not yet been worked out". It would be a loss leader for retailers for "a considerable time yet", he said.

Delivery points will be one of the biggest problems that stores will face, said Dominick Scott-Flanagan, director of Somerfield's 24-7 home shopping service, due to go online this month.

"When you think of home delivery, most people assume that customers will stay at home to receive their groceries, but e-tailing is based on the idea that it will allow consumers more time to do other things," he said.

As a result, firms could be delivering to the workplace, railway stations, local secure units, or even pubs and newsagents, Scott-Flanagan suggested.

But he warned that stores venturing into e-tailing needed to set up separate distribution centres to ensure the right type and volume of stock was available to fulfil orders. Somerfield has three distribution centres for its 24-7 service and plans to open another 15 within the next two years.


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