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Fulfillment Options - Recent Trends

Typically, retailers have provided their customers a standard set of fulfillment options i.e. the different ways in which the order could be delivered to the customer. E.g.: Standard Delivery (2-5 day delivery), Expedited (Next day delivery), Store Pickup etc.

Increased competition has compelled these retailers to provide services that differentiate them from the rest of the pack. And fulfillment options are one area where they are pulling out all stops to woo the customer. An interesting battle is on among retailers that have an online presence in addition to traditional brick & mortar stores pitted against those that have an online presence only.

For the holiday season of 2011, Toys 'R' Us offered an interesting variation to the store pick up service. The ability for the customer to designate a person (other than himself) who would collect the order at the store once it is ready to be picked up. Clearly, the retailer does not want to lose a sale where the customer may not be able to pick up the item and hence does not order.

Similarly,, which has no store presence, is currently doing a pilot project where store pickup would be offered as a fulfillment option. Which store, you ask? A neighborhood store such as 7-11 or Rite-Aid. Amazon has setup lockers at a few stores in select cities in the US and in London, England. Customers choosing this method of delivery receive an email that contains a code that unlocks the locker holding the package. (The customer can choose a locker during checkout.) Of course, the email is sent only after the package has been delivered to the locker by the carrier.

Interestingly, it is not just the retailers who seem to be feeling the need to differentiate. Carriers, used by online retailers for deliveries, are also innovating and offering newer services. UPS recently announced that it was collaborating with a few retailers to offer a MyChoice program which lets consumers, for a fee, subscribe to alerts (emails, text messages) on their package progress OR choose a two hour delivery window within which they would want their package to be delivered. The two hour delivery slot has been offered by retailers (typically grocery retailers) that run their own delivery fleet; it is interesting that a carrier such as UPS also now offers this choice.

There seems to be increased pressure, in this world of uncertainty, to offer a differentiator service that will help add new customers and retain existing ones. What will we see next?

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