CBS Sportsline: In fulfillment, good isn’t good enough
In a presentation on “best in class fulfillment” at the eTail 2004 conference earlier this week in Palm Springs, CA, Dan Head, vice president of e-commerce for CBS Sportsline, advised his audience of e-retailers to “take a Wal-Mart mentality” in their fulfillment operations, referring to the giant retailer’s attention to wringing even the slightest bit of fat from its cost structure. “We have that same mentality in our e-commerce operations,” said Head, “but the measurement we use is time to fulfill, not cost. Being ‘best in class’ in fulfillment means exceeding customers’ expectations of the best in your class.”
For CBS Sportsline, whose principal web store is MVP.com, achieving best-in-class fulfillment is achieved primarily by relying on outsourced fulfillment solutions. “Even Wal-Mart outsources half of their fulfillment, and if they can do it, why can’t you?” asked Head. “You’re using other peoples’ money and resources when you do. And if they (fulfillment solutions vendors) can get the product out the door in 48 hours, why should I invest in that function?”
In making that recommendation, Head explained that CBS Sportline chooses to focus on core competencies in the operation of its web site, which include providing web content, running fantasy sports leagues online, e-mail marketing, database management and web advertising sales. But like many other retail sporting goods web sites, it turns to GSI Commerce Inc. for most web hosting, customer service and fulfillment, because it has concluded those are not core competencies of CBS Sportsline.
But that doesn’t mean that CBS Sportsline abdicates ultimate responsibility for fulfillment and customer service. In its affinity marketing relationship with Amazon.com, for example, CBS Sportsline gets customer feedback from the shopping portal in the form of customer satisfaction rankings, with a score of 5 being the best and 1 the worst. “Every Amazon customer that rates us a 1 or 2 gets a phone call from us to find out why,” said Head. “You learn a lot by doing that and you save a customer from leaving you.” Similarly, said Head, the company has a staffer whose first job in the morning is to scan fulfillment reports from vendors to see which orders were not shipped within the mandated 48 hours. The fulfillment provider gets a call to bring attention to the problem, but customers affected are also contacted to inform them that the package will be slightly delayed—and that shipping costs will be waived.
In cases where CBS Sportsline has determined that an in-house fulfillment option works best, Head argued the company tries not to overlook even the smallest of efficiencies. Most of its in-house fulfillment involves deliveries handled by UPS, he said, but a year ago the company found a better way to send out light and flat packages containing such goods as tee shirts. “We started using the Post Office’s Priority Mail service,” explained Head, “because it cost $3.85 to get a tee shirt delivered in two to three days, when we were paying $4.80 for UPS ground delivery of the same item in five days. You don’t get tracking, but who needs tracking when the service meets your needs and gets the product there faster.”
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