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Zendor Highlights the Benefits to Retailers of Outsourcing Distance Shopping

Press Release

By: Zendor
22 November 2004

The home shopping market is expanding with more and more retailers choosing to exploit the opportunities that distance shopping has to offer. In 2003, the direct catalogue sector grew by 7.1%, achieving sales of £5.6bn (Verdict on Mail Order Retailers 2004), and according to a recent report commissioned by the Royal Mail, online sales are predicted to increase to £40.5bn by 2010 (The Future of Retail: A 2010 Vision).

Retailers who are interested in taking advantage of this burgeoning distance shopping market but are without the infrastructure and expertise to do so should consider outsourcing their distance shopping fulfilment (order processing, warehousing, delivery) and related services (direct marketing, e-commerce etc) to a third party expert. Here, Zendor explains the benefits that outsourcing can offer the retailer:

• Cost - Outsourcing to a fulfilment specialist, with an established, robust infrastructure already in place, can substantially reduce start-up costs, together with capital and operation costs. As well as benefiting from economies of scale, the retailer will also ‘inherit’ the stability of an existing fulfilment operation.
• Catalogue and Web Design - Designing for websites and catalogues requires a very specific skillset, which takes into account the customer needs and requirements involved in buying a product, rather than brochure design which focuses more on aesthetic appeal. Brand consistency across channels and customer recruitment and retention are key in this area and are better understood by a distance shopping expert.
• Merchandising - On the high street a customer can touch and try on items; in distance shopping a merchandiser will have to consider other selling points to create a range of products that customers will buy. A distance shopping expert will have the knowledge and understanding about what products will sell well ‘off the page’ and via the Internet.
• Forecasting - An established retailer will have everything in place to cope with peaks and troughs on the high street; preparing for the same volume fluctuations in distance shopping will require specialist knowledge, flexibility and understanding of the nuances of catalogue and online sales, and so can help the retailer prepare for them.
• Customer Service - Outsourcing the call centre to a distance shopping expert will help the retailer to offer a high quality and consistent level of customer service; guaranteeing excellence in customer handling and also ensuring resources are managed to fulfil peaks and troughs in demand.
• Logistics - Warehousing requirements and processes will differ greatly between a high street retail and home delivery operation. A business with a history of fulfilment experience and knowledge will understand the intricacies of a ‘single pick’ operation for web and catalogue orders, compared to the ‘bulk pick’ facilities needed for stores.
• Packaging - Goods packaged for store do not tend to travel well. Distance selling experts understand how items for home delivery can be packaged most effectively in order to avoid being damaged on arrival, thereby reducing the number of returns and associated costs.
• Returns - It is inevitable that the retailer will be confronted by more returns from a catalogue or online store than a high-street operation. A retailer may be ill equipped to cope with both the volume of returns and the processes needed for refurbishment, evaluation and forecasting.
• Integration - A distance shopping expert can fully integrate all back and front-end fulfilment systems (across store, catalogue and Internet channels) with a retailer’s business existing systems, ensuring a coordinated multi-channel approach. This integration can be more easily achieved when a third party is involved, especially if channels are competing with each other or working independently inside the business.
• End-to-End Service - A fulfilment provider, such as Zendor, can offer the retailer a full range of services, from order taking and customer services, through to warehousing, delivery and returns. By partnering with a single rather than multiple providers also allows for a better co-ordinated and more efficient fulfilment operation.

A close relationship with the right fulfilment partner who understands the nuances of distance shopping could prove advantageous for the retailer. Not only do distance shopping experts have the knowledge and experience of the different processes involved (from merchandising through to returns), but they also understand the home shopping industry including the importance of a fully integrated and end-to-end approach to multi-channel retail.