Online fulfilment

Why are we talking about it?

Online giant Amazon is taking its first steps into physical retail with the launch of collection lockers in shopping centres and transport hubs across the UK, as revealed in Retail Week last week. Customers who select the delivery option will be sent a personal code that will enable them to open the locker and retrieve the item.

Why is fulfilment so important?

Fulfilment is the single biggest inhibitor to shopping online.

Two thirds of those who abandon their online shopping order cite delivery factors as the reason for not completing it, according to Royal Mail research undertaken in 2009.

Tom Allason, chief executive of delivery service Shutl, which works with the likes of Argos and Aurora, says convenience is critical for customers. He says multichannel retailers are increasingly using convenience to gain competitive advantage over pure plays, which are often cheaper in price, with their physical stores being exploited.

However, the pure online retailers are also using fulfilment to build competitive advantage with Asos offering free returns and delivery for the foreseeable future as a marketing initiative.

What innovations are we seeing in fulfilment?

Fashion retailer Aurora, which runs Oasis, Warehouse and Coast and sister chain Karen Millen, now offers 90-minute deliveries for online orders. The retailer trialled the scheme in London but is now expanding the offer elsewhere. Argos also offers a 90-minute service in London.

Department store House of Fraser is also taking click-and-collect to the next level by opening a store solely for that purpose in Aberdeen this month. Retailers are also using convenient pick-up points for customers with online giants Asos and Shop Direct along with high street players Arcadia and New Look using Collect+, which has a network of 3,500 local shops.

What will come next?

The innovations we are seeing now will soon become the norm in online, and consumer expectations will get higher still, according to observers.

Speedier delivery will be inevitable, according to Deloitte head of multichannel Colin Jeffrey, who believes this could have a knock-on effect on where retailers store their stock and could signal an end to the national distribution centre.

More partnerships between retailers, which would allow customers to pick up in alternative stores, are also predicted.