Source: Allegra Strategies Forecasts/Euromonitor/APACS/ONS/IMRG

Source: Allegra Strategies Forecasts/Euromonitor/APACS/ONS/IMRG

As a result, due to advances such as speed and interactivity brought about by digital technologies and the extension of trading time, customer expectations of levels of service have risen significantly. Therefore organisations are required to adopt a more dynamic and flexible approach to dealing with these raised expectations.

Allegra Strategies (2005) identified a number of performance gaps and Table 10.6 presents some of the most significant gaps and the managerial implications.

For the e-retailers it is important to identify any performance gaps and develop strategies which help to close the gaps. For example, in the case of logistics, research has found that utilising carriers (road haulage, air freight) that have higher levels of positive consumer awareness with appropriate online strategies (i.e. offering a choice of carriers) can contribute to the consumer's willingness to buy and overall satisfaction with the online buying experience. Therefore, development of strong awareness and brand image among consumers can prove to be a beneficial strategy for both the e-retailer and the carrier, since consumers have traditionally carried out the home delivery function themselves (i.e. shopping in 'brick and mortar' retail stores). Of course, this in itself raises the expectations of the care taken by the delivery agent, which has the implication of having to introduce better handling of goods as well as the speed with which the goods need to be delivered (Esper et al., 2003). A further consideration is that the retailer and the chosen carrier need to be able jointly to satisfy the consumer so that they may benefit from co-branding.

How the online consumer accesses the retailers' goods has given rise to various formats (discussed earlier in the chapter) and distribution strategies but this only forms part of the retailers e-strategy. Nicholls and Watson (2005) discuss the importance of creating e-value in order to develop profitable and long-term strategies and agree that logistics and fulfilment is a core element of online value creation but at two other important platforms: firm structure, and marketing and sales.

Firm structure can be used strategically depending on organisational capabilities and technology infrastructure. Porter (2001) described the emergence of integration and the potential impact on e-value chains. Integration can ensure faster decision making, more flexibility and attract suitable e-management specialists and capital investment (Nicholls and Watson, 2005). In the case of the UK grocery sector, larger retails have adopted different approaches towards structuring their online operations: Tesco serves 95% of the

Table 10.6 Performance gaps and managerial implications
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