Press Any Key

Published: November 4th, 1999

It takes 10 minutes in the comfort of your home…to make a purchase, but it still takes days, weeks or months to receive it.

Electronic retailing is missing an (old) piece

The new high priests of IS are spending a lot of time extolling the virtues of electronic commerce and the new ways of doing business in the new millennium.

Combining the new millennium with e-commerce creates a degree of urgency associated with Y2K disasters, the end of the world and, as a result, being unable to do business. But with all the change, one old problem still persists.

It’s interesting to note that the first major change in retailing occurred in the 1800s and continued through this century. Catalogues were invented and mail order became accepted as a way of shopping, without having to settle for local products. Gieves of London had a variation where they sent a sales representative with samples of uniform cloth to various Royal Navy ports around the world. Once an officer’s measurements were on file, a letter to Gieves in Portsmouth would result in a nicely tailored uniform being delivered to the ship’s next port of call. Harrods provided a similar service supplying goods to explorers, hunters on safari and British civil servants stationed around the world.

North America had its own specialists, Sears Roebuck and Macy’s to name two. T. Eaton (now defunct) and Simpson’s (now Sears) were certainly the Canadian mail order giants and generations of Canadians were clothed, furnished and, at Christmas, fed by these companies. Now every business has a catalogue and instead of poring over the pages dreaming of the goods, we consign them to the recycling pile as they arrive.

Enter the Web and e-commerce. You can look at pictures on-line, possibly listening to a descriptive voice-over and then, with a click of the mouse, make your purchase in the appropriate size, colour, engine or whatever. Payment is as easy as your latest credit card and the goods will be delivered to your door.

It takes 10 minutes in the comfort of your home at any time of the day to make a purchase, but it still takes days, weeks or months to receive it. This is the puzzle that we haven’t solved yet or managed well.

Ordering on the Web may be fast, but filling the order behind the Web may use the very same manual processes used for a mail order. Somebody types a form, sends it to the warehouse, someone else fills the order, a different person packages it and eventually someone ships it. If you’re lucky and paid the extra tariff for a courier service, the goods will arrive within a week or two. That assumes that there’s no back ordering, last minute inventory depletion or Canada Customs involvement. Any of these can set you back at least another week.

Companies are still stuck with the problems of distribution. Amazon.com have sunk a lot of money and effort into creating an efficient distribution process that matches (or tries to match) demand and customer expectations. I haven’t even tried to describe the accounting, inventory and payment processes, all of which have their own challenges in an e-world.

This doesn’t mean that electronic retailing doesn’t work. It means that companies moving into this brave new world need to make sure that the processes behind the Web are robust and efficient. It also means looking for ways to do things differently. Multiple, localized distribution sites and fast delivery methods may or may not replace a giant warehouse in Toronto.

Electronic direct deposit into a special one-way customer account might replace the credit card. Order management systems and middleware that track order status at each stage including payment will help deliver customer service – or at least answer customer questions. Customer profiles that track sizes, favourite topics or other information to make re-ordering easier are already being done. In short, it’s not the IS challenges that slow things down, it’s the business.

Take a look at your products or services and decide how you’re going to provide added value in your product line and describe it on your Web site. Why should I do business with you instead of the person that’s a mouse click away? Probably because of the quality of your product but possibly because you consistently deliver on time. If you do things right, we build a relationship. Gieves, Harrods, Eaton and Simpson’s realized that a long time ago.

Horner is a partner in Sierra Systems Consultants, Corporate Enterprise Systems practice. He can be reached at alhorner@sierrasys.com.

It takes 10 minutes in the comfort of your home…to make a purchase, but it still takes days, weeks or months to receive it.

Electronic retailing is missing an (old) piece

The new high priests of IS are spending a lot of time extolling the virtues of electronic commerce and the new ways of doing business in the new millennium.

Combining the new millennium with e-commerce creates a degree of urgency associated with Y2K disasters, the end of the world and, as a result, being unable to do business. But with all the change, one old problem still persists.

It’s interesting to note that the first major change in retailing occurred in the 1800s and continued through this century. Catalogues were invented and mail order became accepted as a way of shopping, without having to settle for local products. Gieves of London had a variation where they sent a sales representative with samples of uniform cloth to various Royal Navy ports around the world. Once an officer’s measurements were on file, a letter to Gieves in Portsmouth would result in a nicely tailored uniform being delivered to the ship’s next port of call. Harrods provided a similar service supplying goods to explorers, hunters on safari and British civil servants stationed around the world.

North America had its own specialists, Sears Roebuck and Macy’s to name two. T. Eaton (now defunct) and Simpson’s (now Sears) were certainly the Canadian mail order giants and generations of Canadians were clothed, furnished and, at Christmas, fed by these companies. Now every business has a catalogue and instead of poring over the pages dreaming of the goods, we consign them to the recycling pile as they arrive.

Enter the Web and e-commerce. You can look at pictures on-line, possibly listening to a descriptive voice-over and then, with a click of the mouse, make your purchase in the appropriate size, colour, engine or whatever. Payment is as easy as your latest credit card and the goods will be delivered to your door.

It takes 10 minutes in the comfort of your home at any time of the day to make a purchase, but it still takes days, weeks or months to receive it. This is the puzzle that we haven’t solved yet or managed well.

Ordering on the Web may be fast, but filling the order behind the Web may use the very same manual processes used for a mail order. Somebody types a form, sends it to the warehouse, someone else fills the order, a different person packages it and eventually someone ships it. If you’re lucky and paid the extra tariff for a courier service, the goods will arrive within a week or two. That assumes that there’s no back ordering, last minute inventory depletion or Canada Customs involvement. Any of these can set you back at least another week.

Companies are still stuck with the problems of distribution. Amazon.com have sunk a lot of money and effort into creating an efficient distribution process that matches (or tries to match) demand and customer expectations. I haven’t even tried to describe the accounting, inventory and payment processes, all of which have their own challenges in an e-world.

This doesn’t mean that electronic retailing doesn’t work. It means that companies moving into this brave new world need to make sure that the processes behind the Web are robust and efficient. It also means looking for ways to do things differently. Multiple, localized distribution sites and fast delivery methods may or may not replace a giant warehouse in Toronto.

Electronic direct deposit into a special one-way customer account might replace the credit card. Order management systems and middleware that track order status at each stage including payment will help deliver customer service – or at least answer customer questions. Customer profiles that track sizes, favourite topics or other information to make re-ordering easier are already being done. In short, it’s not the IS challenges that slow things down, it’s the business.

Take a look at your products or services and decide how you’re going to provide added value in your product line and describe it on your Web site. Why should I do business with you instead of the person that’s a mouse click away? Probably because of the quality of your product but possibly because you consistently deliver on time. If you do things right, we build a relationship. Gieves, Harrods, Eaton and Simpson’s realized that a long time ago.

Horner is a partner in Sierra Systems Consultants, Corporate Enterprise Systems practice. He can be reached at alhorner@sierrasys.com.



Related Download
Create a Unique Selling Proposition for Your Global Market Sponsor: EDC
Create a Unique Selling Proposition for Your Global Market

Register Now