Spring 2008

Peter Rowlands revisited the company after four years, and came away impressed

'We're the link between cyberspace and reality. We're the people who give credibility to e-commerce.' So says Stephen Martin, chief executive of Intermail, which is one of the longest-established players in the fulfilment market.

He should know; his company provides fulfilment services to a wide range of online retailers selling anything from cosmetics, jewellery and clothing to gifts and electrical products.

Increasingly, says Martin, the job means more than just storing, packing and despatching product; it can also include a whole panoply of added-value services, from product procurement to web site development. All of which means that clients can increasingly position themselves as truly virtual businesses, focusing their energies on product selection and marketing rather than physical handling.

 

For one or two overseas customers Intermail has effectively taken on the role of UK distributor as well (in the commercial rather than the logistical sense of the term). 'We have clients in China, for instance, who have realised they don't need a UK wholesaler for their products,' Martin says. 'We do the whole job for them.'

The work includes returns handling as well as despatch, and Intermail has even started doing first-pass technical assessment of the condition of returned goods. 'If they're still sound, we can handle their disposal as seconds, or whatever the client wants.'

Historically, Intermail built its business round mail order and response handling - the activity from which it derives its name. That means the company has always been particularly strong in address handling and data management in general; and it has drawn on this experience to build up a very strong IT capability.

As Martin puts it: 'We've concentrated on response handling, not bulk mail, which others can do better, and invested in IT rather than mailing equipment.'

Several years ago F&E reported on the company's in-house fulfilment software, which is now used by a variety of its customers. Since then, Intermail has embarked on several new IT initiatives, one of which is a data warehousing capability.

This is the kind of system where disparately held business datasets are gathered together daily and interlinked in a way that allows detailed, customised analysis and reporting according to customer requirements. 'They might want to pose a specific question such as *Can we afford a mailing to promote a particular product or service, or work out or how many people bought products worth over £100 online in the last quarter?''

The company can evaluate this data against business information datasets such as Mosaic, and analyse it against geodemographic or other criteria. 'We can help point users in the right direction,' Martin says.

Intermail's IT expertise goes further. 'We're able to help customers with issues such as search engine optimisation,' Martin says, adding that the company works on this with a specialist partner-company. 'These days search engines are increasingly making qualitative as well as statistical judgements about the relative popularity of web sites. We can help to highlight these issues for customers.'

He points out that 80 per cent of online shoppers are believed to abandon their shopping carts before they buy. 'There's an incentive for us to reduce this proportion for our customers. If they perform better, we all benefit.'

tailor-made web sites

Recently Intermail has been refining its web development capability further, and a good example of what it can achieve is seen in the work it has done for Bayer on an online system supplying veterinary products. It has built a password-controlled web site with three levels of access. Vets can get into the first level, sales representatives have more extensive access, and Bayer's head office staff have full access.

The system has been tailor-made to Bayer's specification, and includes the option to download brochures, accept orders and email confirmation if required. Advanced AJAX-style technology has been used to allow fast screen refreshing without the need for on-screen forms to be re-drawn every time the data changes.

The IT capabilities are likely to be particularly attractive to smaller e-commerce specialists who are scaling up their operations. As Intermail's IT manager Simon Emerton puts it: 'Moving up to the next level is always hard. Sometimes companies will say they can produce proper pick lists, but then it turns out that they don't even use location codes. We can help bring some order to these activities.'

In such cases Intermail generally charges a setup fee and a monthly account management fee. They are both small amounts in absolute terms, but probably serve to focus the minds of those who are paying the bills.

A classic example of a customer with significant potential is Finchley Clinic, which deals in hundreds of orders a day, and is growing fast. 'They were doing their fulfilment in-house until six months ago,' Martin says, 'but we have been able to help them scale up.'

When talking to prospective customers, Intermail is not afraid to explore their business potential. 'One of the first things we ask them is how they plan to drive business to their web sites,' Martin says.

Intriguingly, on some occasions this kind of discussion has actually prompted Intermail itself to intervene. In one classic instance, it bought the stock of an online retailer that was struggling in its efforts to sell upmarket hair care products online. 'We promoted the range to some of the top fashion editors, and pretty soon the business was growing just through the power of word of mouth and PR.'

When it comes to pricing, Intermail aims to pitch itself in the middle ground. 'Clients looking for outsourced fulfilment usually seem to request four or five tenders,' Martin says, 'and we don't expect to come out at the bottom end. We're not selling fulfilment as a commodity.'

Whilst IT is at the core of Intermail's activities, the company certainly doesn't neglect the physical aspects of fulfilment. 'Space is always a problem,' Martin says - which is why the company recently added a third warehouse to its estate. 'And one of our properties is used purely for storage, rather than picking.'

He adds: 'In a buoyant market it might seem tempting to take on even more capacity speculatively, but we take a pragmatic view. We won't add space unless it's linked to firm contracts.'

Martin acknowledges that final delivery to the customer can sometimes be a problem when it comes to a satisfactory e-commerce transaction. 'Often it comes down to allowing consumers to enter helpful delivery instructions for the courier company on e-commerce web sites,' he says. However, he takes full responsibility. 'Intermail has a duty to manage the couriers and make the delivery work for the customer.'

Intermail has a range of resources to contribute to delivery success. For a large proportion of clients it sends automatic emails informing consumers that products have been despatched. It also runs its own call centre. 'Even a simple thing like a well-constructed web page of frequently asked questions can help reduce the number of consumer queries,' he says.

While Intermail's main focus is the UK market, it continues to attract business overseas as well. Its work for Far Eastern importers is one example of this activity; another is its presence in the United States, where it has a long-standing presence on the east coast. 'We distribute for three or four of our UK clients in the US,' Martin says, 'and we also do work for American retailers wanting to sell in the UK.'

He says he would love to see expansion into continental Europe as well. 'There's great potential for fulfilment companies there.'

Something Martin is particularly proud of is Intermail's support for industry standards and qualifications. He himself is a founder fellow of the Institute of Direct Marketing, and the company was among the first to embrace ISO quality standards.

data security

More recently Intermail became probably the first in its field to achieve ISO 27001 certification for data security - 'and that means both physical and electronic data,' Martin points out. 'We won't send data anywhere unless it's encrypted.'

He feels this focus on data security underlines the company's ability to deal not just with physical distribution, but also with the information flows that always lie behind it.

Clearly Intermail has long since outgrown the term 'mail' in its name, and Martin says there have been times when he has debated changing it to something that conveys its role in physical distribution more strongly. 'But we're so well established now that it would be counter-productive to change the name.'

In any case, mail order and now e-commerce have always meant more than just letters. If you ever want evidence of that, have a look at what Intermail does. For all-round commitment to fulfilment and all that goes with it, it's hard to imagine a supplier that is better-placed to offer you the solution you need.