Fulfillment Change Trims ShopNBC's Warehouse Needs

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Television shopping network ShopNBC, looking to improve its fulfillment process, has begun drop-shipping orders taken by telephone or over the Internet.


The New York-based network, which competes directly with QVC and Home Shopping Network, is using CommerceHub's Universal Connection Hub to integrate via the Web with its suppliers. This lets the brand expand its product offerings without the risk of adding inventory.


"We're enabling them to expand their product offerings on their Web site and television broadcast without ever owning, warehousing or shipping the item, and all with the same levels of customer service as if products were shipped from their own warehouses," said Frank Poore, president/CEO of CommerceHub, Clifton Park, NY.


Before using CommerceHub's platform, ShopNBC did what many retailers do: fax, e-mail or communicate through other means like electronic orders to its suppliers. Products would be shipped to its facility, the truck unloaded and the product stored in the warehouse. It eventually was picked, packed and shipped to the customer.


Now, the order enters the ShopNBC system and is communicated to the supplier, which ships directly to the customer. Consequently, there are no costs related to inventory, shipping and handling between businesses, warehouse or labor.


CommerceHub lets ShopNBC integrate electronically with all its suppliers regardless of their technical capabilities. This includes compliance on purchase orders, shipment confirmations with tracking numbers, inventory feeds and invoices.


The way it works is simple. Once an order is taken for, say, a blazer at www.shopnbc.com, the retailer authorizes the credit card. After completion, ShopNBC's internal order management system generates an order to CommerceHub. The order is processed and changed into a file readable by the supplier's system.


At the supplier's end, this order is entered into its system and a ShopNBC-branded packing slip -- logos, barcodes or gift messaging -- is generated for inclusion with shipment. The supplier picks and packs the item, and inserts the slip into the box for shipment directly to the customer.


Once this happens, CommerceHub gets a shipment confirmation with tracking numbers from the supplier in a format the supplier sends. CommerceHub changes the file into a format readable by ShopNBC's systems. ShopNBC receives the shipment information, which triggers an e-mail to the customer and a settlement of the customer's credit card.


Through this process, CommerceHub's Drop-Ship Master application lets ShopNBC monitor the service levels with each supplier. If, for example, a supplier does not pick up an order by a certain time, the shopping network is alerted so it can keep the process moving without affecting the customer.


"Fulfillment is as important a part of the customer experience as anything," Poore said. "When a customer lays down their cash for something, there is a building anticipation to receive the product. Retailers have been getting better each year and have worked out many of the kinks that plagued earlier years. But with continual growth and big spikes in capacity required, everything gets pushed to the limits."


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