Australia Post blows e-commerce whistle

Australia Post blows e-commerce whistle

Australia Post has announced an extensive e-commerce initiative where it will provide the payment and logistics services for e-tailers. However, there is at least one doubting Thomas in the channel.

The postal giant has spent about $34 million developing the initiative, which is split into four key divisions. POSTlogistics will provide warehousing and fulfilment services such as inventory management, dispatch and returns processing for traditional and online retailers. This will be complemented by POSTeParcels, which will integrate the placement of orders with its processing.

Australia Post has also added extra online services to POSTbillpay, a counter and telephone payment system, and has extended the Pay it at POST service, where online customers with security concerns can now make payments at the retail outlet instead of over the Internet.

Martin Fisk, executive director and founder of e-procurement specialist Streamlink, is not as confident the Australia Post system will deliver the goods.

"A lot of companies have a huge disconnect between their online presence and the operations of their business," he said. "The issue with online fulfilment is all about the shop you're buying from. Unless Australia Post takes over the whole kit-and-caboodle, there will still be big gaps in the order system."

Australia Post has already signed up some initial e-tailers including David Jones online, Coles online, Telstra, Vintage Cellars and Smartbuy, and plans to offer its services to a large portion of the e-tail market.

"I think there's a lot of credibility in a service provider that can have a bricks-and-mortar presence of the scope of 4600 odd retail outlets," said Alec Ceselli, general manager of POSTlogistics.

Ceselli said the Internet economy needs the strength of a player like Australia Post to give consumers confidence in shopping online. He believes the existing logistics capabilities of dot-coms do not live up to consumer expectations.

"The main reason for our involvement in fulfilment is that all of the existing services are disparate, in that you have to go to numerous suppliers to get the whole solution," he said. "We are covering everything from order receipt, payment, fulfilment and delivery. There's no doubt that to have an efficient supply chain, you need this scale and points of presence."

Ceselli stresses the importance of Australia Post's retail outlets as points of presence for payments and returns. Australia Post has recognised the fears consumers hold when giving credit card details over the Internet, and the fact that many consumers don't have credit cards, and has decided to facilitate these payments in retail outlets after a product is ordered online. It has also recognised the problems associated with returning faulty or unwanted goods to e-tailers that have no offline presence. But Fisk believes consumers will be unlikely to gain any confidence from the returns service.

"If the product you ordered doesn't work, do you want to line up behind people buying 45 cent stamps to return it?" he asked. "No, you want to speak directly with the people who will fix the problem.

"The good logistics businesses were good businesses before the Web," he said. "What Australia Post is doing isn't all that much different to what TNT and Mayne Nickless and Corporate Express already does.

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