Three ways to go the distance of the last mile

Instant gratification, the promise of many B2C e-businesses, continues to cause problems. Well, surprise surprise!

“The last mile” will continue to be the most expensive part of the infrastructure needed to make businesses in the new economy work efficiently for the average consumer.

Gartner, which provides authoritative e-commerce research, says that for every &£1 spent on the Web front-end (the bit you see on your PC) up to &£50 will have to be invested in the back-end (the bit that stocks product and delivers to you). However, as yet back-end investment has barely started.

There are three approaches in evidence at the moment. First, you have the “established” players who already own and operate big facilities, such as GUS and JD Williams. They are struggling to transform themselves from supertankers into speedboats, so far with limited success.

Second, there are the real new economy delivery firms, such as Urbanfetch, Kozmo and Koobuycity.

Some, like Urbanfetch, have already run out of start-up money, and there will be a lot of small failures before the winners start to emerge.

Finally, there are the leviathans who have already established major brands, who have taken the opportunities of the new economy seriously and are making the investment necessary to go the last mile. Tesco shines out here as a really savvy player.

The key to e-commerce and investor confidence is, of course, communications, and the missing piece of the “back-end” puzzle that has still to arrive is the latest generation of customer management call centres.

Given that even in best-case situations 70 per cent of interaction is still on the phone, and that the call centre agent needs to be able to see phone, e-mail, fax, WAP, written, despatch and stock details – together with purchase and payment history – the difficulty of getting an accurate picture becomes easier to appreciate.

The pioneers attempting to solve this part of the equation can expect to make real progress over the next 12 months as the software that enables true “multi-channel” customer management begins to settle down.

Howard Seaton is a director of Caribiner Capital