A new industry report predicts that as e-commerce grows, the demand for
order fulfillment solutions will reshape the delivery business as suppliers
evolve to serve the small-package needs of commerce sites.
Online orders from consumers and businesses will soar past the two
billion per year mark by 2003, the report from Forrester Research (FORR) says.
As online sales move out of the experimental phase, three factors — an
expanded selection of products sold online, the need to move a large
volume of small parcels, and rising customer expectations — will combine to
put new pressures on order
fulfillment systems, the report states.
“No one is prepared for the exponential growth in parcel deliveries
that online sales will generate,” says Stacie S. McCullough, business
applications research analyst at Forrester. “Firms that fail to attack order
fulfillment with the same vigor as online selling will experience customer
defection, funding attrition and distribution nightmares.”
The report says companies can meet the demands of online selling by
developing a fulfillment system that delivers end-to-end logistics,
which Forrester defines as: package visibility and service continuity from
buy button to final destination.
Firms need to keep customers informed with up-to-date information about
order arrival and empower them through self-service solutions that address
common fulfillment problems, the report says. Meanwhile, manufacturers and
distributors need to shift their focus from shipping in bulk to stores
to delivering packages to individual consumers.
“With residential deliveries expected to exceed 2.1 billion by 2003, a
strategic battle over the consumer doorstep is under way,” says
McCullough. “Shippers have figured out that whichever vendor establishes an ongoing
relationship with the consumer becomes the
online retail gateway.”
For the report, entitled “Mastering Commerce Logistics,” Forrester
interviewed
40 vice presidents of operations from retail, Internet, and
manufacturing
companies that have an online presence.
