Fulfilment: Size Doesn't Matter

SYDNEY (08/03/2000) - The small end of town is showing that it can be a big player when it comes to delivering the goods.

"We are quickly discovering that small niche players specializing in Internet fulfilment and home deliveries often provide a far better service than their more established counterparts, such as large transport companies," says Rob O'Byrne, director of Sydney-based supply chain and logistics management consultancy Logistics Bureau.

"There is not a lot of expertise in the B2C (business-to-consumer) delivery arena," says O'Byrne. "What we're finding is that the smaller players are forging ahead in the market. Their focus is on B2C, so they tend to be able to provide a superior delivery service because they understand their customers' needs. These are companies that are solely focused on home delivery, they are flexible and have the right 'cultural fit'. Large transport companies that cater to the masses often simply don't have the know-how."

O'Byrne says more "e-competent" distribution companies are investing in the appropriate technology for order processing, transport management, and track-and-trace systems.

"Good distribution companies know that the most important part of an e-commerce transaction is the delivery," he says. "If a company's core business is B2C, it will know that customers want consistent service, a choice of delivery time, evening and weekend deliveries, and value-adding technology."

Brent Hughes, chief executive officer of Melbourne-based logistics and fulfilment company e-fill, a joint venture between online department store dstore and logistics and fulfilment company 3PP, agrees.

"E-fill and its joint venture partners recognized the market need for completing the delivery experience and made the investment in home delivery to provide the consumer with an economically timed window delivery to their home," he says. "Daytime, evening or weekend deliveries promote the flexibility available for the consumer to shop online."

According to Hughes, flexibility for the customer is the key requirement when it comes to the delivery of goods purchased online.

"As a fulfilment provider in direct-to-consumer you must always be looking for the way to enhance the customer experience," he says. "Consumers really don't care where the ball was dropped in the fulfilment of their order."

Indeed, as dstore CEO David Gold points out, all the evidence suggests that online shoppers want to make the choice when it comes to taking delivery of their online purchases.

And that's why there's also room in the market for delivery solutions that link consumers, retailers and distributors in one process.

One such offering comes in the guise of Sydney-based industrial, electronics, engineering and communications company CMG IEE's data box.

"We believe that any system that provides increased visibility in the status of a shipment can do a lot to enhance the current paltry state of fulfilment," says CMG IEE's chief tech Brett Raymond. "Our 100 percent locally-made data box is successfully tracking the progress of farm produce en route from 'geographically challenged' farms to central processing plants at least an eight hours drive away in both Australia and the U.S. This box could bring great freedom and choice to e-customers, driving many more to purchase online.

"When a customer wants to know where their delivery is, the central server can display it to them via a delivery pin over the Internet.

"Data boxes," Raymond explains, "are put into vehicles, so that at any stage of the delivery cycle, not only the freight company, but also the customer knows exactly where the delivery is. Receiving live information from the box, the freight company's home base knows where the parcel is at any time and exactly when it has been delivered. Text messages can be sent to and from the driver, and there are no black spots as satellite technology is used.

"In short," according to Raymond, "total visibility, and no more sitting at home for hours waiting for the delivery contractor to come. When a customer wants to know where their delivery is, the central server can display it to them via a delivery pin over the Internet."

Another product aimed at providing the three-pronged missing link is ezzebox, founded in January 2000 with financial backing from software company Unicomp.

"Based on a proprietary wireless access system, the ezzebox is an electronic delivery box, much like a safe," explains founder and co-director Darren Geros.

"Easily installed at both residential and business locations, it features a touch keypad that generates a unique code for each delivery, providing customers with the option at the point of purchase to have their goods delivered to their ezzebox.

"A unique access code is generated," he continues, "which is attached to the parcel with the delivery details. On delivery, the courier enters the code into the ezzebox keypad.

"Each code is only valid for one ezzebox and one delivery to ensure maximum security is maintained. Once the parcel is delivered and the ezzebox has been securely shut, a notification message is automatically sent to either an e-mail address, pager number or mobile phone."

Geros says ezzeboxes, which are suitable for up to 80 percent of current deliveries and can fit up to two cases of wine, will be available in metropolitan areas from early December 2000 at an estimated price of $A500 (US$292) or A$5 per delivery.

According to Geros, research indicates that 68 percent of goods currently delivered require more than one delivery due to unattended delivery addresses or courier limitations.

"At an average of A$5 per delivery, the cost of redelivery last year was A$10.2 million," he says. "This burgeoning cost of redelivery is seriously eroding retailers' bottom lines."

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