Electronic Retailer - August 2012 - 34

Not Your Father’s Fulfillment House
With faster shipping, better service and analytics that can help direct response marketers make better business decisions, today’s best fulfillment operations are anything but plain vanilla warehouses.
BY JACK GORDON

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Hal Altman has a favorite line to use in speeches to groups of direct response marketers: “If you find a fulfillment house, and you go home that night and you can’t sleep, you’re in the wrong place.” Altman is president of Motivational Fulfillment and Logistics Services of Chino, Calif. His line is meant to hammer home the point that the fulfillment house holds the marketer’s entire business in its hands. “It has your merchandise, it has your money, it has your relationship with credit card companies, it has your reputation,” he says. If the fulfillment house drops the ball on customer service, screws up on packing or shipping orders, fails to manage chargebacks or returns properly, fails to deposit money in a timely manner, or reports financial information incorrectly, “all of that reflects on the client’s business,” Altman says.

Since fulfillment is so central to DR marketing, it behooves marketers to keep tabs on developments in the industry. What is changing about the fulfillment business? What can a fulfillment house do for clients now that it couldn’t do a few years ago? When Electronic Retailer posed those questions to four notable fulfillment executives, here are some trends that jumped out.

The New Need for Speed
Ayal Latz, president of a2b Fulfillment Inc. in Greensboro, Ga., calls it the Amazon Effect. Everyone in the industry has become intimately familiar with it. People who buy DR products in response to TV, radio or print ads once accepted as a fact of life the notion that they might wait weeks to receive their purchases. No more. Consumer expectations about when the product

should arrive on their doorstep have been radically altered by online marketers such as Amazon.com. If you order something from Amazon, Latz says, it almost always ships within 24 hours and you usually receive it in about two days. Depending on whether you qualify for one of Amazon’s frequent-buyer programs, the shipping charge you pay might be zero. Free shipping is still a rarity in the DR world, but “fast shipping has become a very hot topic,” Latz says. Executives agree that next-day or even same-day shipping is the emerging standard among leading fulfillment houses. To cover themselves in case of backorders or other supply problems, DR marketers still use language such as “allow six weeks for delivery,” Latz observes. “But that has gotten dangerous, in my opinion. Why would [consumers] buy from you? ‘Six weeks? Forget that, I’ll just go online and buy something similar.’” “Years ago, our turnaround time from receiving an order to shipping it was

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Electronic Retailer - August 2012

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