The 7Rs principle consists of 7 tasks that logistics must meet in every company. 7R simply stands for 7 times Right. What does the implementation of this concept look like in the logistics service of online stores?
Dr. Arkadiusz Kawa, Department of Logistics and Transport, Poznań University of Economics and Business: Logistics is one of the key areas of activity for a modern trading enterprise. Nowadays, no one should have any doubts that logistics is not just a source of costs. Beyond supporting the processes of planning, organizing, and controlling the flow of goods and information about them, it performs an integrating function for separate business entities. It is precisely in the area of logistics that many concepts have emerged in recent years to improve the operational functioning of enterprises and their customer service. It has also become the foundation for the operations of companies selling physical products online. Without logistics, particularly without the delivery of goods to the customer, the implementation of the online sales process would be very limited.
The 7Rs concept can be used to explain the role of logistics in e-commerce. It defines 7 principles that logistics must ensure. These are the following activities:
1) Delivering the Right product – the delivered product should be exactly what the customer ordered. This refers not only to the type of product but also to its color, version, originality, etc.
2) In the Right quantity – the goods should be delivered in exactly the quantity the customer ordered. This is of particular importance for companies that make online purchases. If they receive too small a quantity of goods, they may have problems with their current operations or lose sales opportunities. In the B2C segment, most goods are ordered online in single units, so there is no problem with delivering them in the right quantity.
3) In the Right condition – this relates to the safe delivery of the product to the customer. The quality of the delivered product should be exactly the same as if the customer had purchased the product in a traditional store. The condition of the goods is affected by improper handling during loading, unloading, and transport. Proper securing and packaging of the product also play a major role. The poor condition of goods can be caused by damage, partial shortages, etc.
4) In the Right place – the goods should be sent by the online seller to the location indicated by the customer. This can be: a specific address (e.g., work, home), a post office, a parcel drop-off and pick-up point (e.g., grocery store, newsstand, gas station), a self-service terminal (e.g., parcel locker), or a stationary store location.
5) At the Right time – unlike traditional retail, the customer does not have immediate access to the product after making a purchase. Therefore, it is important for the seller to specify the order fulfillment time, in particular the time for order preparation and shipment delivery. Customers increasingly have a choice of different delivery dates and can thus influence the total order fulfillment time. In the case of domestic orders, this time is 1-2 days, while for international orders, it ranges from a few to over a dozen days.
6) At the Right cost – the largest logistics cost in online retail is the cost of delivery. In the case of cheap products, it may exceed their price. The faster the delivery, the higher its cost. Efforts are made to reduce delivery costs by optimizing the final delivery process, the so-called last mile. This involves offering various forms of self-collection of parcels. Customers increasingly expect free delivery and product returns, especially when their order exceeds a certain amount of money. Besides delivery, an important cost factor is order preparation, i.e., picking and packing products.
7) To the Right customer – products should be delivered to the customer indicated as the recipient in the order. A major role here is played by the customer correctly providing the address to which the store should send the order and providing additional contact details, e.g., a phone number. In the event that personal collection of the parcel is not possible, a person authorized to do so should be indicated.