What role do logistics play in online grocery retailing in general?
The advent of Internet technology in all its applications paved way to the modernization of traditional tasks before. In business, the traditional market operations such as retailing of grocery stores was transformed into point and click strategy. Today, the process is known as e-tailing – the sale of goods and services via the Internet or other means of electronic channels for personal consumption of consumers (Harris and Dennis, 2002). Meanwhile, on the case of online grocery retailers, e-grocer is the term that was coined to describe both the process and the people engaged to it (Hays et al.).
Generally, logistics is among the most essential tool in procuring products and services where they are needed and when they are desired. It plays a general role in accomplishing tasks in marketing and manufacturing industries. The whole support process involves integration of information, transportation, inventory, warehousing, material handling, and packaging.
In online grocery retailing, logistics still play its traditional functions. However, the advancement that the Internet technology brought enhanced the efficiency, convenience, and access to the services/products being offered by the company. Mainly, logistics in online grocery retailing is a tool for increased efficiency and convenience (Dennis et al. 2004). Logistics developed the traditional market. It augmented the growth of retailer power to control their supply chains. The physical involvement or retailers is reduced but the supply chain management become more effective with the use of modernized equipment for operations (supplier and retailer linked) (Dennis et al. 2004).
Placing grocery orders over the Internet that utilise highly automated centralized warehouses and computerized logistics structures is more efficient as to compare with groceries in the supermarket. The movement management for the retailer and prospective customer to establish contact and achieve an exchange of merchandise for payments has not always required a physical store (Dennis et al. 2004, pp. 205-206). Some retailers saved a significant amount of their resources in operations “by replacing electronic-data-interchange (EDI) tools with Internet-based ones that facilitate product comparisons, streamline logistics, and help business-to-business vendors” (Calkins et al. 2000, p. 140).
At once, customers neglect the feasible benefits of online grocery retailing, but when they tried and are enchanted with the convenience of ordering groceries online, they will be hooked to it (Smaros et al., 2000).
Logistics, effective in application, is a competitive weapon to survive online retailing industry (Dvorak & Van Paasschen 120). As an example, the superior effectiveness of the computer-controlled logistics schemes is seen in Tesco (Fernie, & McKinnon, 2003). Another example would be, Amazon, which is founded on efficient logistics systems and customer care and service (Dennis et al, 2004). Amazon uses its logistics proficiency “to carry out distribution services on contract for bricks retailers such as WHSmith (www.whsmith.co.uk) and Toys R Us (www.toysrus.co.uk)” in U.K. (Dennis et al. 2004, p. 9).
But the convenience of online grocery retailing still holds predictable consequences relating to the usage of Internet in the process. The Internet has global reach and provides the opportunity to trade internationally. Dennis et al. (2004) claim that “this is not necessarily an advantage for a number of reasons, such as having to deal with multiple languages, currencies and even cultures, and managing far-flung logistics including returns, but, with foreign competition able to enjoy the potential of international trade online, businesses do need to consider their competitive position should they ignore e-retail” (p. 58).
With its forgivable pitfalls, logistics in online grocery retailing supports the whole operation of the company by means of highly sophisticated technology and processes that provide instantaneous, effective, and 100% quality guaranteed product/service.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment