Online shopping is set to have a revolutionary impact on consumer buying habits, but its potential will be constrained, not so much by technological limitations as by the logistics industry responsible for delivering the desired objects to customers' doorsteps. The potential for dissatisfaction with this part of the transaction is legendary, and the subject of more complaints than many other aspects of online shopping which have much higher profile. Grievances about damaged goods, unfulfilled or incomplete orders, long lead times and badly timed deliveries are just some of the issues that have to be addressed by online suppliers who fail to get their logistics right. Poor service can kill off the relationship between an online supplier and its customers at a time when the 'doorstep experience' is fast becoming as important as it was in days gone by when the fishmonger arrived every Friday to sell a fresh catch off the back of his van. Yet many logistics and delivery companies, while well prepared to deliver goods in bulk to factories or shops, have little experience at picking and handling a high volume of individual stock items and delivering them to domestic addresses. Online book and clothing suppliers need watertight systems for effective returns handling; and technically complex products may need specialist handling and unpacking and even installation. The Lane Group PLC is one of the UK's leading logistics companies with five years' experience of domestic deliveries. In 2002 it won over El million worth of new business, becoming the sole supplier for Parcelnet for the delivery of large-screen televisions, taking on the home delivery and installation of nursery products for Mamas and Papas, working for Tesco in a major product recall and re-delivery programme, and winning the Lilywhite's contract for the delivery of domestic gym equipment. But despite its success, profits were difficult to realise, as Sales Director Patrick Butler explained: 'We offer a professional two-man delivery and installation service, which many of our customers demand to complement their own quality products and brand image. However, there is still an unwillingness among retailers and manufacturers to pay for the added value elements of such a service ... We have in the past come across customers who have expected a 48-hour service, installations, product testing and old product collection and removal - which is fine. What is unrealistic is that they often expect these services free of charge.' Questions . What decision criteria should online retailers use in selecting a distribution ser vice? Sources: www.lanegroup.co.uk; Beimen (2000). . To what extent are the psychological characteristics of the buyer likely to have influenced the decision of companies such as Tesco, Parcelnet and Lilywhite to use the Lane Group? 3. Account for the reluctance of manufacturers and retailers to pay a premium for value-added distribution services
