Consumer Online: Web retailers need to get the logistics right

Web-based traders can learn a thing or two about logistics from the mail order and catalogue specialists. Paul Harris, Chief Exectuive of the giant catalogue firm GUS, told the Consumer Online Conference in London yesterday that his firm had built "a substantial logistics capability comprising call centres, warehouses, and a network of catalogue deliverers... e-commerce will need some of this capability."

Too much concentration on the technical nuts and bolts and the virtual front end of e-commerce offerings will not provide the right degree of customer focus. "We must not think people will behave wildly differently online," said Harris, stating that service, value, and convenience are just as important online as on the high street.

According to Harris, Web based shopping is currently worth only 2% of the total home shopping spend in the UK. GUS's own print catalogues represent 24% in market share and billions of pounds worth of turnover by themselves -- much larger than all current UK-based Web shopping. But Harris believes that the Web based piece of the pie will grow quickly, and the firm is positioning itself to be a dominant player in Web shopping in the future. All of GUS's operations will eventually be online. "We use the Internet for all communications -- to talk to all employees, customers and suppliers," said Harris.

In his introduction to Paul Harris, Jupiter Communications' Phil Dwyer, provided some research suggesting strong growth for e-commerce in Europe by 2002. Jupiter's research suggests Germany will emerge as the main market in Europe, with an e-commerce spend worth more than the UK and France combined in certain key product categories. It will not have been missed by Paul Harris and others attending the conference that Germany has a huge catalogue-based home shopping industry.