Your favorite aunt always did her holiday shopping early. And she always managed to find the perfect gift. Never did she send after-the-fact e-mail explaining, " Sorry, your dream toy was out of stock."
Unfortunately, many e-tailers cannot claim anything close to the same track record. Fulfillment problems such as lost orders, incomplete or inaccurate product availability information, and late shipments were common features of the 1999 online holiday shopping season. Many e-tailers, in addition to counting increased sales, found themselves dealing with lawsuits filed by unhappy shoppers. In July, the Federal Trade Commission approved a US$1.5 million settlement against several e-tailersââ,¬"including CDnow, KBkids.com, the Macys.com site of Federated Department Stores, Toys 'R' Us , and the Georgia division of HoneyBaked Ham, ââ,¬"which, consumers said, got their holiday orders wrong.
This year, with analysts such as those at Jupiter Media Metrix, predicting online holiday sales will jump 66 percent to US$11.6 billion, the stakesââ,¬"and the need for e-tailers to fix fulfillment problemsââ,¬"are higher than ever. Getting fulfillment right, experts say, will be the quickest road to customer satisfaction.
"The pressure is on the retailers and this market channel to prove themselves," said Chris Newton, an analyst at AMR Research. "This entire business model has come under question and is on trial this year."
E-tailers say they've gotten the message. The lesson they learned from last year's holiday ordering blues, they say, was that customers have high expectations for online fulfillment. And unless e-tailers deliver high customer satisfaction, this season may be their last. So, to fix or head off fulfillment problems this season, e-tailers are taking steps: They're beefing up ordering and fulfillment systems to give custom ers better product availability and delivery information; they're doing a better job of after-the-fact analysis to find and fix fulfillment problems; in some cases they're turning the whole fulfillment process over to a new breed of fulfillment service providers; and, perhaps most important, they're being careful to promise customers only what they can deliver.
Will it work? E-tailers still won't be able to match your favorite aunt. But, say experts, they will improve on fulfillment this holiday season. "No one wants to see the bad press or be sued," Newton said. "There has been a tremendous shakeout this year. The really weak retailers who didn't have business models or systems in place are not going to be around this year."
