Editor's Comment

Editorial: How even the big players can struggle with the cost of fulfilment

One of the biggest stories this week is the news that Tesco is to close its Tesco Direct website in July – and has blamed high fulfilment costs in part for its decision to close. As well as closing the site the company will close its Fenny Lock fulfilment centre, which handled the Tesco Direct orders.

The struggles by the retailer to make the site work show that even for big players getting the right balance between fulfilment and profitability isn’t an easy task and so requires careful management.

That’s easy to say and not so easy to do – especially when retailers are struggling to accommodate all their customers’ desires around delivery. In our opinion piece this week Matthew Robertson, co-CEO of NetDespatch, reveals why he believes flexible delivery will become the norm.

Of course one way of challenging fulfilment costs is in encouraging customers to pick up their items from store through click and collect. It saves on delivery costs, the risk of failed deliveries and helps to boost additional spend too – since there is an opportunity to sell once again when the customer comes to collect.

In its latest results Halfords has revealed the strength of its click and collect business with around 85% of its online orders being picked up through the company’s store networks rather than being delivered directly to customers.

In other news this week we have furniture retailer Loaf extending its logistics contract with Wincanton; shareholders voting for a new financing deal for DX Group and the launch of new tracking tools from APC Overnight.

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