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Online sales hit logistical brick wall

Delivery is the key to success in ecommerce, research claims

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As e-commerce takes off, online retailers are being hit by the logistical nightmare of delivering the goods to their customers. A report from Forrester Research suggests that as the number of e-sales passes the two billion per year mark, companies will have to rethink their distribution strategies. The research company says that delivery of goods has not been a major concern, since online sellers have limited the number of products available. Three factors will put pressure on the electronic retailer: expanded product lines, the need to move large volumes of small parcels, and rising consumer expectations. "No one is prepared for the exponential growth in parcel deliveries that online sales will generate," said Stacie McCullough, an analyst at Forrester. "Firms that fail to attack order fulfilment with the same vigour as online selling will experience customer defection, funding attrition, and distribution nightmares." So what is the solution, according to Forrester? Companies must develop distribution systems that follow the package on its journey from the Web site, to the customer's front door. Customers also need to be kept informed of the progress of their order. Less than half of the companies selling online that were interviewed for the research made a profit on packages they shipped, and a staggering 85 per cent can't handle international orders (Global village? What global village?) because of the complex customs laws involved. ® Daily Net finance news from The Register

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