E Commerce Challenges for International Retailers

Prior to 1990s, International Retail Industry was plagued by inefficient Supply chain as well as under Supplier control of products. Post ECR initiatives the industry went through streamlining and adapting new processes as well as supply chain solutions that have brought the industry to its present stature. Currently the situation faced by the International grocery retailers seems to be the same as it was prior to 1990 with reference to its Online shopping customer deliveries. New and effective supply chain models are yet to be developed, tested and proven before they are adapted and standardised globally. Currently detailed studies are being conducted and theoretical models simulated by the industry experts. In some cases sample field trials for effective delivery solutions are being tried out both in US and in UK too.

E Commerce has opened up a whole new dimension to the International Retail Trade. Online shopping holds promising future for the customers who get to save on time and effort in driving the distance to the malls as well as the ease of ordering items from home at one’s convenience. Online shopping currently is at a very sensitive stage for the Retailers are luring customers with the promise of On time delivery as well as online promotions and availability of complete range of products. However the challenge faced by all is to manage the backend operations to manage the online orders.

The backend operational challenges with online order servicing are mainly related to the Order picking, packing and fulfilment process which is managed and controlled by the Retailers in house and the last mile physical delivery of goods issue.

Most Retailers promise a guaranteed window for home deliveries. Tesco in UK promises to effect home deliveries within 2 hours while many other retailers promise next day deliveries. When we consider the problems related to last mile delivery, we need to address two issues that make up for the last mile delivery problem. First and foremost is the issue of cost of delivery of individual orders to the homes. Secondly, the availability of Customers at home to accept the deliveries.

Several solutions are currently being evaluated by the Industry to tackle both the above problems. Retailers have designed several types of boxes for effecting home deliveries. Most Retailers currently use fixed boxes that are secured to the designated place at the residences so that unattended deliveries can be affected. Streamline in US has pioneered a new concept in effecting unattended deliveries. They use stream boxes that the delivery man can leave in the Customer’s garage which he accesses through a keypad system. The keypad system is linked electronically to the e-access system that allows him access to restricted |designated areas of the house and once the transaction is completed, the system terminates the access from the keypad.

Across US, several other options are being tried out too. Some retailers have designated collection points like local petrol bunks, post office or some such nearby location where the order deliveries can be picked up by the Customers at their convenience. Some of the large building developers have begun to install collection box areas in the building reception area similar to the luggage lockers. In UK, surveys have revealed that people prefer direct home deliveries within two hours. However satellite collection centres seem to be gaining ground too along with the collection centres at the reception of the apartment buildings.

Retailers have had to design separate boxes for delivery of food and other temperature sensitive items that are required to last for a few hours until it reaches the Customer. In case of unattended deliveries, the window of time where such items are required to maintain in ideal temperature is increased. Accordingly innovative boxes are being used by Retailers to tackle these delivery problems.

The logistics issue is not limited to making deliveries within the window of time promised or making unattended deliveries across the country but of collecting and getting back the boxes too.

Next few years are quite exciting as the Retailers get sufficient exposure and are able to gather data to understand Online Customer’s buying behaviour and find cost effective supply chain solutions to meet with their delivery promises and commitments.