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E-Commerce Innovation Needed by Retailers

Last summer I wrote a column titled “Holiday e-Commerce: Innovation Required” (SCMR Jul/Aug 2014). In it, I delved into the causes of the substantial late deliveries that occurred during the 2013 holiday season.

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Last summer I wrote a column titled “Holiday e-Commerce: Innovation Required” (SCMR Jul/Aug 2014). In it, I delved into the causes of the substantial late deliveries that occurred during the 2013 holiday season. Many gifts were not delivered in time to be put under the Christmas trees of lots of families. My view was that the e-retailers and parcel carriers set customer expectations too high. They positioned legacy services as if orders could be submitted as late as possible the day before, yet still be delivered by Christmas Eve. The media laid most of the blame on the parcel carriers despite the fact that retailers were equally—if not more—complicit. The carriers had not tailored their delivery services to accommodate holiday nuances, and retailers were characteristically struggling to handle large volumes of e-orders. 

I concluded that parcel carriers and e-retailers needed to jointly innovate new holiday delivery services, especially more realistic delivery schedules. They appeared to have done this as delivery performance vastly improved this past holiday season. Apparently the parcel carriers added costly capacity and convinced retailers to not overpromise delivery dates, as well as to provide forecasts that they would not exceed. While deliveries improved, brick-and-mortar retailers still struggled because they retro-fitted existing supply chains, rather than making the investments needed to succeed in e-commerce.


Short History of Mass-Market Retail

I started my career at a consulting firm with Sears, and Roebuck and Co. as a client. Sears was the Wal-Mart of its day as the highest grossing merchandizer. Sears was also an early version of a successful omni-channel retailer with two major sales channels: brick-and-mortar stores and mail order catalogs (the precursor to e-commerce). Its legacy catalog business grew from the late 1880s by servicing the expanding Western frontiers. Sears separately managed two supply chains.

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Download Article PDF

Last summer I wrote a column titled “Holiday e-Commerce: Innovation Required” (SCMR Jul/Aug 2014). In it, I delved into the causes of the substantial late deliveries that occurred during the 2013 holiday season. Many gifts were not delivered in time to be put under the Christmas trees of lots of families. My view was that the e-retailers and parcel carriers set customer expectations too high. They positioned legacy services as if orders could be submitted as late as possible the day before, yet still be delivered by Christmas Eve. The media laid most of the blame on the parcel carriers despite the fact that retailers were equally—if not more—complicit. The carriers had not tailored their delivery services to accommodate holiday nuances, and retailers were characteristically struggling to handle large volumes of e-orders. 

I concluded that parcel carriers and e-retailers needed to jointly innovate new holiday delivery services, especially more realistic delivery schedules. They appeared to have done this as delivery performance vastly improved this past holiday season. Apparently the parcel carriers added costly capacity and convinced retailers to not overpromise delivery dates, as well as to provide forecasts that they would not exceed. While deliveries improved, brick-and-mortar retailers still struggled because they retro-fitted existing supply chains, rather than making the investments needed to succeed in e-commerce.

Short History of Mass-Market Retail
I started my career at a consulting firm with Sears, and Roebuck and Co. as a client. Sears was the Wal-Mart of its day as the highest grossing merchandizer. Sears was also an early version of a successful omni-channel retailer with two major sales channels: brick-and-mortar stores and mail order catalogs (the precursor to e-commerce). Its legacy catalog business grew from the late 1880s by servicing the expanding Western frontiers. Sears separately managed two supply chains.

SUBSCRIBERS: Click here to download PDF of the full article.

About the Author

Larry Lapide
Dr. Lapide is a lecturer at the University of Massachusetts’ Boston Campus and is an MIT Research Affiliate. He received the inaugural Lifetime Achievement in Business Forecasting & Planning Award from the Institute of Business Forecasting & Planning. Dr. Lapide can be reached at: [email protected]

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