New specialists will revolutionize online shopping

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UK home delivery will be transformed by managing integrated fulfilment networks and boosting consumer confidence in shopping online.

“Retailers need a fulfilment operation that is responsive to customer needs,” said Mike Honor, an analyst at Forrester Research. “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 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. They will help retailers build customised fulfilment propositions that work backwards from customer needs, yet are economically feasible.

These specialists will combine all the players in a retailer’s supply chain into a fulfilment network. They will rationalise operations and enable retailers to make significant cost savings, reduce stock holding and increase available products.

“Having rationalised the process of delivering single packages to doorsteps, component integrators will seek to replicate the communities of their B2B 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 quickly satisfy consumers demands, more consumers will buy online.”

Forrester Research’s “Whole View” of the Internet economy enables clients to weave together initiatives with eBusiness technology to satisfy customers’ changing needs.

Forrester

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