The ABCs of B2C

The ABCs of B2C

High profile e-tailer dstore is exploring its fulfilment options to meet customer expectations.

By Alicia Camphuisen

Fulfilment is the crux of any e-commerce operation. While drawing customers to one site over a milieu of alternatives is a hard task, meeting that consumer's demands and keeping them happy is crucial to generating repeat visits.

Todd Sunderman, director of operations at, is keenly aware of this. The online department store has kicked off 2000 with a television campaign promising the efficiencies and human touch of the site, and now it is Mr Sunderman's task to help deliver.

Launched last November as a joint venture between Looksmart Australia and sports merchandise retailer Rebel Sport, dstore has steadily expanded its inventory to currently sell toys, sporting goods, health products, videos and DVDs.

"It's the back end that separates the men from the boys in the e-commerce business."

Although the general range of products available to buy online is a fraction of what is available at physical outlets, dstore has looked to ease of use, convenience, and 24-hour shopping to entice consumers.

With customers able to take purchases from stores home immediately too, timeliness and accuracy of delivery has become crucial to dstore's quest to win over the everyday consumers yet to be drawn into regular online shopping.

To manage dstore's back end processes, Mr Sunderman said the company has organised its operations into four discrete areas.

The first and largest task was to plan warehousing and fulfilment. The packaging process and inventory levels are managed from dstore's semi-automated warehouse in Melbourne.

"Our warehouse management system needs to be automated because we want to build our capabilities," said Mr Sunderman. The site is still in its first stage of automated back end fulfilment, which includes automatic clothes sorting and flat pack technology, however Mr Sunderman said the company's broader vision is to add more technology to expedite the stages of delivery.

"The technology is also important to keep costs and time down," he added.


Each warehouse order comes directly from the dstore database. When a customer places an order, their payment is processed in real time so that dstore can immediately begin fulfilling it. "This takes out a process for us later on, as the site automatically generates an order processing form and sends it to the warehouse once payment is approved," said Mr Sunderman.

This message is in a standard Electronic Data Interchange (EDI) format. Although this message mode has traditionally linked separate businesses, dstore is using EDI to connect aspects of its supply chain and intends to continue expanding its applications.

The EDI message is sent from dstore's Microsoft-based site to a printer in the warehouse, where each order is printed out as a pink pick-and-pack slip. The slip contains the product name, brand, type, quantity and barcode for each item on the order, together with the customer's address details and any packing information such as gift wrapping. The slip also includes the location of each item in the warehouse.

Orders are manually gathered one at a time by pickers, and each order is kept in a bucket or tray with its slip. All items are barcode-scanned by a static scanner before being hand packaged for delivery. Although labels are printed out, staff must manually key in delivery details and print out labels for couriers.

The scanning allows dstore to monitor its inventory and maintain stock levels. Scanned data is assembled into a purchase order for dstore's suppliers, and incoming stock is scanned as it is put on warehouse shelves. The warehouse database mirrors the site database, so that customers see an accurate reflection of item availability.

Mr Sunderman said that at the moment the fulfilment process takes a few minutes, but he is conscious that the site can further improve its efficiency by automating relevant aspects of the process.

Dstore is looking at introducing trolleys capable of holding several trays for orders and fitted with Liquid Crystal Display (LCD) screens. These screens would display several orders at once, so pickers could process several orders in roughly the time it currently takes to complete one. Pickers would also be armed with handheld wireless radio frequency (RF) scanners, so they could scan items as they are picked from the shelf.

Dstore is also investigating a pick-to-light option, in which the lights on each item's location on the shelf are lit to signal to the picker that the item is part of the order. "These kinds of options will speed up the process and reduce error," said Mr Sunderman. "To use the cliche, it is the backend that separates the men from the boys in the e-commerce business."


Dstore also wants to broaden its use of EDIs beyond the single inbound version to five based on different order requirements, including inbound, reverse logistics (returned items) and purchase orders. These EDI messages would be directed to appropriate sections within the warehouse.

Dstore is already focusing on how else it can take advantage of EDI, as the company is planning to integrate the transmission of the message so that it will be linked to the consignment note computer. This move will ideally save time taken to type labels and manually complete courier consignment notes.

Order delivery is ultimately the responsibility of a third party, although dstore has established a set of criteria according to its warehouse and delivery vision and customer expectations. These include the ability to deliver within certain time frames, at night and on weekends, have online parcel tracking, be cost-effective and have nationwide delivery. As its current courier service only offers online tracking of these criteria, dstore is looking at other alternatives to expand its fulfilment offering.

"We haven't been overly excited by the logistics industry in Australia," said Mr Sunderman. "If we don't find someone we want to partner with in the next six months, we may just buy a courier company and do it ourselves."

Dstore's customer service and reverse logistics are value-added aspects of the site that have increased ease of use with consumers. As part of its company policy, for instance, customers can return stock to physical Rebel Sport outlets who then pass it on to the warehouse, where it is scanned and recorded as returned so that the order can be amended with a replacement item.

Dstore databases must be kept up to date so that processes can accurately track items and constantly record stock levels.

While Mr Sunderman said that some of the fulfilment aspects will probably need to remain manual tasks, he said that the company's focus at the moment is to increase its processing ability, as a preparatory step to manage the custom the site is angling to draw.

"We have wanted to build a dedicated business to consumer warehouse to meet customer needs like quality of delivery, but in Australia there tends to more focus on business to business."