Understanding Brand – What is a Brand?
Brands are different from products in a way that brands are “what the consumers buy”, while products are “what concern/companies make”. Brand is an accumulation of emotional and functional associations. Brand is a promise that the product will perform as per customer’s expectations. It shapes customer’s expectations about the product. Brands usually have a trademark […]
Measuring Acquisition Equity
Acquisition equity is the potential monetary value of acquisition for the organization. It provides the stage for customer equity data to be encapsulated in the financial database of organization. Measuring acquisition equity is indigenous and simple process to implement, the only hurdle is the collection data before this calculation is made. Computation comprises of following […]
Product Management in the Indian IT Sector
The previous articles in this module discussed how product management differs from brand management and the way in which product management is carried out in IT companies. This article looks at the specific case of product management in Indian IT companies by referring to some well-known companies and their practices. The Indian IT sector is […]
Positioning and Differentiating the Market Offering Through Product Life Cycle
Today’s markets represent the surplus market, with a wide range of product available for sell. Consumer has huge product offering to choose from, for soap, there are more than dozen brands and each brand has at least 4 or 5 varieties. Companies have to work on strategies, which would differentiate their products from competitors. This […]
Changing Media Landscapes and their Impact on Society
In previous articles, we have discussed how media affects society and effects changes in the way people think and act. This article looks at how the historical function of media as a watchdog and a purveyor of public good have now evolved to a point where the media sets the agenda for the country to […]
International Retailing is seeing exciting times. With globalisation and availability of new market opportunities, we see a lot of aggression from International Retailers in consolidating their operations within the country and setting up new outlets in emerging markets such as South East Asia. International buying and supply chain has undergone a series of evolution since 1990s and currently the International Retailers are moving towards consolidating their procurements and buying through Global exchange of Suppliers.
Globalisation and Internet revolution has opened new vistas for International Retailers in terms of E Commerce and Trade opportunities. Online shopping has become the new channel of sales. With increasing penetration of internet in all homes, the volume of online shoppers is steadily increasing. On time committed delivery is the key driver of this channel coupled with availability of complete range of SKUs available at the store.
Tesco offers a guaranteed 2 hour home delivery for all of the online orders in UK. When the Retailers are faced with making committed deliveries to its customers across the country, they are faced with several challenges in operations. The challenges faced mainly are to do with back end store operations that manage order fulfilment and the last mile distribution.
As the Retailers are committed to delivering as per their promise, most of them manage the logistics of transportation and bringing back the delivery boxes in house. Making individual deliveries to Customers is an expensive proposition. Studies in UK reveal that each individual delivery can cost upto $13-15 whereas the Customer is charged between $5-7. This means the residual cost is borne by the Retailer Company.
In order to tackle this delivery problem, Retailers have come up with several solutions that are being tried out. Some have set up local satellite collection centres from where the Customers can collect their orders at their convenience. In some cases the apartment buildings provide a securing system for the unattended delivery boxes. LeShop in Switzerland has opted to use the National Post to deliver all of its orders to the Customer’s homes the next day.
The day is not far off when the Home Delivery or Secondary Distribution solution that is cost effective and workable will be in place. The trend of growth in this area would be similar to the way Third Party LSPs have developed Primary Transportation and Warehousing solutions. The way that the local transportation as well as the courier companies work can be replicated to home delivery process too.
Third Party secondary distribution Companies are setting up and operating common home delivery system for multiple Retailer Companies. They are setting up consolidation centres at the Point of Pickup and distribution centres at local point of delivery, from where home deliveries are affected. Dedicated tracking systems are implemented and are interfaced with the Retailer’s system to ensure instantaneous data exchange. Use of RF at the point of delivery ensures online confirmation of Proof of Delivery.
With availability of Third Party Service providers who can provide the required quality and committed services and are equipped with reliable IT systems to ensure seamless integration with Retailer systems, the costs of home deliveries will drop drastically, making it a profitable venture.
Online shopping is the way for the future of International Retailing. On domestic deliveries front, the Customer’s tend to prefer immediate deliveries within two hour window and are yet to accept a late and unattended delivery system. As time goes by, the model will mature and solutions will fall in place. Next decade is going to be a learning period for International Retailers in understanding and predicting the growth of Online Shopping and E Commerce as well as developing international solutions to cater to the E-Customer’s demands.
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International Retail Store Design Principles – The Principle of Totality
February 12, 2025
