E-commerce? It’s all in the delivery

Written by on August 31, 2015 in Opinion with 0 Comments

delivery 2There is, surprisingly, a new player in the e-commerce game. You would be forgiven for thinking that with retailers innovating in how their customers buy, collect or receive deliveries it would be a brave man to try it. Parcelhero, the e-commerce fulfilment specialist, believes that Jet.com is run by a very brave man. The man in question is Marc Lore, a founder of online retailer Quidsi – which includes diapers.com and soap.com – which he sold to Amazon in 2011 for $545 million.

His unique selling proposition is in the logistics. The offer is run along the lines of Amazon Prime, in that you pay a monthly subscription. In return, the company, now with 1,600 retail partners, offers customers prices 10-15 percent lower than anyone else.

Prices start at around eight percent cheaper than elsewhere, but, cleverly, discounts are added as more ‘bundles’ of orders are placed at one time. They also trade-off price for delivery against speed. Right now, speed is the ball game, with retailers trialing drones, and the ‘click and collect’ culture becoming mainstream. Instead Lore’s view is that if customers can wait a while, then they can get it cheaper.

His other innovation is in the returns policy. The cost of returns is high, because it is almost entirely manual. This kept the cost of delivery high as well (in the same way that credits kept the cost of credit card processing so high for so long). Jet offers customers the choice of not returning items and adds an extra discount if they choose this option.

It seems that the e-commerce arena is still as disruptive as ever, perhaps more so. In the struggle for the most efficient delivery mechanism, the giant of the piece, Amazon, is setting up its own subsidiary, Amazon Logistics to address the issue. (See here for a Parcelhero paper on the subject.)

The world of e-commerce just got interesting again. With Amazon seeming to lead the way (with eBay always in the background), retailers moving quickly beyond a ‘bricks and mortar’ mentality and other giants such as Apple being rumoured to thinking about a play themselves, it is still a space worth watching. And lessons may well be learned for the overall communications industry.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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