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E Tailers, Deliver Or Die


Business Week e.biz -- Neuborne on E-Tailing

E-Tailers, Deliver or Die

This holiday season, online shoppers will not tolerate order snafus

I spent much of September watching the Olympics on television (though NBC's ratings suggest I was nearly alone in that pursuit). But I wish I could have made every e-tailer on the planet watch the gymnastics competition. Why? Because the coaches and commentators delivered a constant and relevant refrain to the athletes: Stick the landing.

That's a message the e-tail community needs drummed into it as the holiday season approaches. No matter what you do with your site design, your merchandising, or your ad campaign, make sure you do what you have to do to get those packages to my door on time. Stick those landings. This is the season when the last mile will be the most crucial element of e-business. It was the glitch that got the most press last year, and it will be the factor that will count most with consumers this time around. Sellers who come up with creative ways to deliver will secure enormous consumer loyalty. For those that don't, "it won't matter how great your other stuff was," says Lauren Freedman, president of The E-tailing Group, a Chicago-based consulting firm. "The package didn't get there as expected. That's what the customer will remember."

That's a tall order for this industry. It will be harder than last year to get the delivery right. Jupiter Research predicts that online retail sales will boom this season, to $12 billion, up 66% from last year. The increased volume alone will put pressure on fulfillment departments and delivery partners. What's more, fewer companies are offering free shipping this year. While consumers might have been a bit more forgiving of mishaps when the shipping was free, they'll be a lot more demanding when they're paying for it.

E-tailers say they're ready. eToys (ETYS) has new warehouses on the East and West coasts to get goods to consumers in a timely fashion. Toysrus.com (TOY) has partnered with logistics whiz Amazon.com (AMZN). Ashford.com (ASFD) has elected to continue offering free overnight shipping from its Houston warehouse. But lots of companies are still working out the kinks. Virgin Megastore Online has a great new idea--home delivery in 30 minutes or less on selected items. I had a friend try the service in Los Angeles, where the project debuted. It worked, sort of. Within 45 minutes, my friend had two copies of the CD, delivered at two different times. He had to send one of the CDs back and then wrangle with a supervisor on the phone to be sure he wasn't double-charged. That, in gymnastics terms, is what's known as a hop on the landing. It certainly wasn't a wipe-out--the CD arrived in good time. But that glitch at the end is the last thing the customer experiences.

I can testify that great delivery is well worth the investment. I used Barnesandnoble.com's (BNBN) same-day delivery service in Manhattan earlier this year when I realized, on the Friday before Father's Day, that I was giftless for the upcoming brunch with my dad. By 6:30 that evening, I had an Aaron Copeland CD in hand, wrapped and all. Until then, I was a loyal Amazon shopper. But now B&N is on my radar. I remember that this was the company that thought up a creative delivery tactic and executed a flawless landing--a 10. We need more.

Admittedly, making the last mile a success is no easy trick. In almost all cases, e-tailers don't control delivery and must partner with anyone from United Parcel Service (UPS) to Kozmo.com to get the job done. But delivery will be the lasting image of this holiday season. So hold those wobbles--or we're going to the mall and carrying our packages home.By Ellen Neuborne, Ellen_neuborne@ebiz.Businessweek.com


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