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Wednesday
- October 4, 2000
Intermediaries Revolutionize UK Online Retail
Fulfilment
New fulfilment intermediaries will help the UK's online
merchants confront problems of increasing competition and
painful economics, according to a recent report by Forrester
Research. These players will transform home delivery by managing
integrated fulfilment networks and contributing to an enhanced
consumer confidence in shopping online.
"As retailers struggle to make existing
fulfilment operations work consistently, competitive pressure
and accelerating customer expectations require them to graduate
to a more sophisticated model," commented Mike Honor,
analyst at Forrester Research. "Retailers need a fulfilment
operation that is responsive to customer needs. To pull this
off, they must integrate their front ends with diverse product
suppliers, traditional warehouse operations and third-party
logistics firms. For most retailers, this is too much of
a challenge. Intermediaries will help merchants with this
and give them the advantage over competitors that deal with
carriers directly."
Component integrators will become the new intermediaries
with the scale and scope to redefine fulfilment for the largest
online retailers. These specialists will help retailers build
customised fulfilment propositions that work backwards from
customer needs, yet are economically feasible.
Component integrators will combine all the
players in a retailer's supply chain into a fulfilment network.
They will rationalise complex and inefficient fulfilment
operations and enable retailers to benefit from significant
cost savings, reduced stock holding and increased product
availability.
"Having rationalised the process of delivering
single packages to doorsteps, component integrators will
seek to replicate the communities of their business-to-business
logistics cousins," Honor said. "They will do away
with long-term contracts between retailers and carriers and
adopt the role of market-makers in order to balance supply
and demand across the fulfilment network, manage relationships
between retailers and carriers, and operate dynamic, responsive
demand chains."
"Intermediaries will thrive in the fulfilment
business -- their integration of diverse parties into broad
networks is to the advantage of all. Retailers get a broader
and faster fulfilment infrastructure, carriers access a more
economically viable model, and consumers get convenient and
responsive delivery. As merchants offer consumers quicker
gratification of their demands, more consumers will buy online."
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2000 News Archive
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