Golden Service Enterprise PC Home
The Unbeatable Lightness of 24-hour Delivery
In the world of online retailing, only one question is paramount: "How to deliver the goods to the consumer as quickly as possible." At PC Home, the secret weapon is not working faster, but a 24/7, three-shifts-a-day operational culture.
The Unbeatable Lightness of 24-hour DeliveryBy Yueh-lin Ma
From CommonWealth Magazine (vol. 478 )
Two lions, PC Home and Books.com.tw, are locked in mortal combat in Taiwan's NT$200 billion online consumer market. In CommonWealth Magazine's recent service industry survey, the two competitors ended in a virtual dead heat, be it in terms of customer satisfaction, reputation or any of the other seven indices surveyed, but PC Home was able to edge out number-two Books.com.tw on the strength of its 24-hour delivery service efficiency.
"99.99 percent of our deliveries are made within 24 hours," says PC Home chief operating officer Vincent Hsieh, noting that a customer might now even place an order at noon and take delivery early the same evening.
PC Home began offering its 24-hour delivery service four years ago, and to date no competitor has been able to match it.
At one time, "PC Home and Yahoo Kimo Shopping were engaged in a sort of civil war," observes Richard Chang, founder of top Taiwan online fashion retailer lativ.com. At the time, PC Home was just an upstart online retailer vying for customers through low prices – until they established an efficient warehousing and distribution system modeled after Amazon.com, establishing a business model "that really made people wake up and take notice," says Chang.
This sort of three-shift, round-the-clock Taiwanese-style service is entirely reliant on an execution capacity that foreign companies can't match.
Inventory Times Calculated to the Second
"We actually haven't gotten faster," Hsieh says in a self-analysis of PC Home's success. "We've just deconstructed the supply chain to reduce inefficiencies along the distribution network."
PC Home now calculates its inventory in terms of the number of seconds each item is stored in company warehouses.
Whenever a typhoon approaches Taiwan, PC Home boosts its inventory of mahjong sets, anticipating an upsurge in game-playing among the storm-trapped population. And with the arrival of each Ghost Month, the company increases its stock of Kuai Kuai biscuits, one of the more popular snacks presented as offerings to the spirits.
Hundreds of employees scurry about the company's two Taoyuan warehouses, with a combined floor space of more than 3,000 sq. meters, working round-the-clock in three eight-hour shifts, picking up merchandise and making sure that the more than 10,000 orders the company receives each day are delivered into the hands of consumers as rapidly as possible.
The value of Internet service derives from its supply chain efficiency. From point of origin to final point of distribution, every time each item changes hands, costs go up. An online service needs not only to have precise inventory control to offer cost savings to consumers, but also to provide a more direct conduit between producer and consumer to ensure there are no gaps that might cause delays in satisfying the consumer demand for virtually instant gratification.
Running Low on TP? Hit the Button
"People today are very busy and there isn't always time to plan ahead for everything. Online shopping is convenient in taking care of consumers' everyday needs," Hsieh says. PC Home's single biggest seller, in fact, is toilet paper; when customers realize they're running low, they can just go online and they're restocked before it's too late.
Responsive to an aging society, PC Home has this year introduced telephone ordering, offering goods for consumers that are just a phone call away, needing only the customer's name, phone number, goods to be purchased and a home address.
"You don't need to become a member and you don't need to provide a pile of personal information," Hsieh says.
From the start, PC Home has tossed aside the "customer profile" approach so many others salivate over, refraining from requiring membership registration and allowing consumers to jump right in and buy.
"When you go to a brick-and-mortar store, do they ask you your age, what you do for a living, or your annual income?" says Hsieh.
Hsieh thinks online retailers need concern themselves with only one thing. "That's how to deliver the goods to the consumer in the shortest possible time."
Aside from 24-hour delivery, PC Home leads the industry by offering more than a few innovative services, including online layaway payments, online cash bonus accrual and instant online redemption of credit card bonus points. Its aim is to use greater speed and convenience to share the advantages of brick-and-mortar stores with consumers.
PC Home is now taking Taiwanese goods and its own service system abroad.
In July of last year, "Global PC Home Shopping Network" went online, making nearly 350,000 products available for purchase and shipment to 105 countries around the world, from mosquito lamps bound for South America to stainless steel woks bound for Africa.
"The quality and price of Taiwan-made products can make any one of them an internationally competitive ‘most favored product,'" Hsieh says. He thinks there is a need to take the battle of commerce from the tiny island to the world at large via the Internet.
In a digital age that has seen e-commerce grow by leaps and bounds every year, what online shopping service will come along next to delight consumers?
Translated from the Chinese by Brian Kennedy