April 30, 2002, 12:00 AM

The WIZMO Factor

(Page 2 of 3)

UPS has been offering its Worldship software, which includes customer e-mail notification, for five years. It is a free add-on service for retailers who use UPS for shipping. Retailers have been slow to adopt it because UPS hasn’t made a great effort to push it and retailers have been more focused on the basics of getting online selling right. But that is starting to change as word gets around about the savings that retailers like GrooveTech and XDR2.com achieve. “E-mail notification costs pennies for the retailer to send and it provides a greater level of service,” says Alan Amling, director of e-commerce at UPS. UPS relies on vendor partners to incorporate Worldship into their e-commerce products. UPS also allows some of its larger customers, such as Lands’ End, to customize a tracking page that links to the UPS system.

Shaving costs

Third-party fulfillment and customer relationship management vendors are starting to tap into the need of the smaller retailer to keep up with the big ones, and so many are rolling out automated e-mail notification programs geared at small and mid-sized retailers.

Vendors who once focused only on their ability to pick, pack and ship quickly and efficiently today are moving more into the customer relationship management realm with notification services. Experts say it’s because the market is maturing and retailers are focusing on ways to keep a lid on fulfillment costs. They not only turn internally for cost savings, but they look to their vendors as well. “There is a trend towards shaving off fulfillment costs now that vendors have gotten the process down,” says Jim Bunn, senior manager of KPMG Consulting Inc.’s retail practice. The desire to shave costs has squeezed the margin on vendors and at the same time prodded them to look to other services they can add.

And one of the ways they do both is by leveraging existing systems and data. “Retailers and vendors are collecting a lot more customer information now and they’re getting more sophisticated about how to use it,” Bunn says.

Everything and then some

PFSweb, for instance, used its e-mail notification systems to inform Roots` customers on a weekly basis of their order status. After taking orders for more than 400,000 berets, far beyond initial expectation of selling 10,000, PFSweb helped Roots keep its fulfillment process flowing. Layton points to the fact that fewer than 3% of orders were canceled as proof that customers were satisfied with the service.

Once retailers and vendors get the notification system well in hand, there’s no reason they can’t apply the instant-notice philosophy across the board, participants say. Boston-based SmartBargains.com, for instance, an online liquidator of high-end consumer merchandise, says it initially hopes to reduce costs by 10% when it implements APL Direct Logistics` Proactive Parcel Management product later this year.

But that is only the start, says Rich Secor, SmartBargains executive vice president. “Our philosophy is to give customers all the information they could possibly want, before they want it, so they don’t feel the need to contact our customer service department,” Secor says. “That philosophy applies to product information, service information, and anything else for which the Internet offers such a great advantage. Any time someone contacts our customer service department, it means we failed to provide adequate customer service.”



Wireless may find its e-retail niche in customer notification

Online retailers have been trying to define the role of wireless devices in e-shopping. So far to little avail. The screens are too small to display and describe product adequately and the keyboards not easy enough for most consumers to input shopping, shipping and payment data.

Now some participants believe they have found the niche that cell phones and personal digital assistants will occupy in retailing: Delivering order status to customers. “There is a definite movement toward this,” says Mark Layton, CEO of Plano, TX-based PFSweb Inc. “Consumers will be able to specify how much and how frequently they want to be updated about orders.”

Vendors say consumers’ appetite for immediate gratification is increasing, which would make wireless delivery and shipping alerts a must for retailers concerned about customer service. “That’s why people shop online,” says Layton. And analysts agree there is value in even faster notification. “If I order flowers for my wife it’s more useful to me to be notified of when they are delivered, rather than having to rely on checking my e-mail to see when the flowers were shipped,” says Jim Bunn. senior manager of McLean, Va.-based KPMG Consulting Inc.’s retail practice.

Some already are rolling out wireless notification. UPS is expanding its wireless access to notification services so customers can get tracking information on PDAs and wireless devices. And Greenwich, Conn.-based NewRoads Inc. says its Customer Concierge technology that notifies customers about orders can be configured to support voice-response systems as well as text messaging. “People don’t appreciate how simple the wireless function can be,” says David Himes, senior vice president of business process solutions. “All we have to do is reformat the message to make it shorter and people just need to know their text messaging address.”


He may ride forever ...

On Dec. 18, college student Emily Peters logged onto Barnes & Noble.com to buy a couple of CDs as Christmas gifts. She was taking advantage of Barnes & Noble’s offer to get free two-day delivery with the purchase of two items. Two days later, one of the CDs arrived at her home in Evanston, Ill. Four weeks later, UPS delivered the other.

The Essential Oscar Peterson: The Swinger started its journey on Dec. 19 from Barnes & Noble’s fulfillment operation in New Jersey. It stalled at a distribution center in Ohio on Christmas Eve. On Dec. 27, it moved out to a major UPS sorting facility in Chicago. But once there, it made a U-turn and went back east. Over the next two and a half weeks, the CD got caught in an automated loop and traveled from Chicago back to Ohio four times before a customer service rep who had been asked to help solve the problem instructed a worker in the sorting facility to grab the package, put a hand-written label on it and send it back to Chicago. In the course of its odyssey, the package had been scanned by UPS sorting equipment 37 times.

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