Logistics: The Key to e-Retail Success

Beyond all the fancy Web sites and 24-hour, in-your-pajamas shopping convenience, it is excellence in distribution, transportation, and inventory management that leads to Internet retailing success. With store-related costs gone, logistics expenses have become an even larger part of the retailer's cost structure. To better understand the influence of logistics in e-retailing, a detailed experiment is designed and managed that used phantom shopper techniques for purchasing and tracking purchases of music CDs. The research turned up three key areas in which logistics managers can add tremendous value: 1. network design, 2. search and inventory management, and 3. physical delivery.