E-commerce retailers focus too much on the ‘front-end’ of their business and do not investenough time and money on ‘back-end’ logistics, according to an e-commerce expert.
Online retailers in the UK are now moving towards multi-channel marketing, and are branching outinto areas such as mobile commerce through smartphones and social commerce through online platformssuch as Facebook, Jamie Halliday, research consultant with London-based Fresh Minds, told a DHLe-commerce media workshop near London last week.
‘M-commerce’ and ‘s-commerce’ (and even ‘f-commerce’ via Facebook) would be the next mega-trendsdue to the fast spread of smartphones and online communities, he predicted.
But retailers are often ignoring or doing too little in the area of fulfillment, and deliveriesand returns in particular, Halliday stressed. “Retailers invest in the front-end, the website,products, and so on. But they do not invest in back-up fulfillment,” he declared.
Only about 10% of 500 e-tailer decision-makers said ‘accurate and on-time delivery’ was the mostimportant part of the multi-channel consumer experience, compared to about 30% for product choiceand 20% for website usability, a Fresh Minds survey found.
While 20-30% of British online retailers have invested most heavily in physical stores, websiteusability or customer support over the last year, as many as 45% said stock availability was theirmajor problem over this period. Only about 25% had invested in this area, however.
Fulfilment failures often included costly, late or failed deliveries, unclear or complex returnsprocesses and a slow refund process, Halliday stated.
Looking at European e-commerce market trends, he predicted that the £21 billion Britishe-commerce market, which now accounted for 5.4% of total retail sales, would slow to a growth rateof about 12%. The Nordics (with £20 billion in e-commerce revenues) are growing at about 22%, whilethe German market, now worth £14 billion, is growing at about 15%.
There is massive potential in France, Southern and Eastern Europe, where the markets arecurrently much smaller, due to fast growth in smartphones and relatively low internet penetration,he added.
As these markets mature, there is a general trend towards more sales of higher-value goods asconsumers gain confidence in online purchases, he commented.
