Delivery. this is Absolutely the bugbear of e-commerce, if the horror stories told by would-be customers are anything to go by. Six months after the UK's first e-Christmas, many retailers are still struggling to cope with the surge in online shopping that it brought and the promises of fast and convenient delivery.
Relying on traditional delivery firms and their 20th century approach to an essentially 21st century phenomenon, retailers and customers, are regularly disappointed, as goods still take unacceptable lengths of time to be delivered - if at all.
Retailers are not as clued up on the art of customer service as they could be, as they often fail to give punters the feedback they need about their transactions. But now that gap of expectation is about to be filled by a combination of "old" and "new" economy players, competing and co-operating to, literally, bring home the goods.
Express Dairies with its network of 2,500 milk floats and 250 depots has just invested £3m in M-box, a UK start-up.
Express, whose milkmen pass 10m homes six mornings a week, will increase morning delivery slots and introduce evening deliveries on behalf of retailers,to fulfil the promise of delivery at the customer's convenience.
Domino's Pizza, with 205 stores across the UK and Ireland, is in on the act, following a successful trial delivering Pokémon games to homes for online games retailer Gameplay, that ended last week. Now, the pizza vendor will expand to include CDs, videos, DVDs, and according to marketing director Chris Moore: "It is credible to suggest that your local Domino's delivery driver could be dropping round to your house with anything from MP3 players to flight tickets."
Jet petrol stations, along with late-night convenience stores Londis and Spar, have joined start-up Dropzone1, to serve as depots for those not averse to picking up their online purchases en route.
Exploiting the logic that most online buyers in the UK are less likely to be at home during the day, Dropzone1 will take delivery of e-shopping from the retailer on behalf of the customers. They simply choose a local pickup point or "dropzone" from its website, to which the company dispatches the goods, ready for the customer to pick up at £1 a package.
Trials begin in the Reading, Berkshire area next month and the company hopes to expand partnerships to 5,000 depots by the autumn, to include video rental stores and off-licences.
The Online Research Agency predicts that the value of the UK home delivery business will be around £120m this year. "Ironically, with e-commerce, all sorts of long-forgotten institutions like the corner shop are being revived," observes Nick Rosen, a director at the agency.
The main driver of change has been the unique difficulties big transport companies face when delivering to households with any degree of flexibility, after hauling the goods over long distances. This is known as the "last mile" delivery problem.
"People's delivery requirements tend to be skewed towards the end of the day or week," explains Simon Pollard, vice president and service director at AMR Research. "At normal retail prices, margins of between 1% and 4% and high petrol costs, it is not profitable for traditional delivery companies to work the last mile."
Exploiting this to the full, Dropzone1 and other e-fulfilment start-ups such as ZipRound, and M-box are also seeking direct partnerships with on and off-line retailers as well as customers, in a bid to cut the traditional delivery firms out altogether. ZipRound, described by founder Peter Wright as "part web portal, part courier network," has gone one step further and is negotiating with two overnight delivery firms to run their last mile operations.
M-box, through partnerships with others, proposes to offer some or all of the elements required by retailers to operate efficiently on the web, from running their collection and returns operation, to outsourcing the entire e-fulfilment process.
The scramble among nimbler start-ups for last mile business has attracted a number of niche and "end-to-end" service providers. They offer anything from one-hour delivery to management of a retailer's e-fulfilment operations.
In the last 10 days alone, two companies have launched into the UK: US-based UrbanFetch and M-box, with many more imminent, from both sides of the Atlantic.
Which model will win - the home delivery or pickup service? And which goods are suited to different forms of fulfilment?
"There is definitely a marketplace for niche delivery specialists from the US and UK,"says Pollard at AMR Research. "But the secret is to remove the undesirable constraint of having to be home and give the customer the choice of where to receive goods."
He predicts the birth of a "lifestyle collection service", where customers will be willing to pay a premium to have goods brought to the most unlikely pick-up and delivery points. Stadiums and hospitals, for instance.
Rosen at the Online Research Agency also sees the costs of widespread delivery services as prohibitive. "It's too much of an investment. Tesco, for one, has first mover disadvantage, with the cost of maintaining each vehicle at about £1,000 a week. It's the delivery hubs that will work in this country. The village shops, the petrol stations."
But at the very least, between the old tried, tested and trusted milkman, the corner shop and the new delivery whippersnappers, there appears to be the promise of more flexibility for the customer than ever before.
Can one now, finally, expect one's e-shopping to arrive in internet time?
