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 / Spring 2006 / Issue 42(originally published by Booz & Company)


The Hidden Costs of Clicks

In the end, future success for retailers of furniture, electronics, luggage — any sort of retailers — won’t be a matter of expanding standard offerings to the burgeoning Internet channel or replicating existing online models. Despite the obvious marketing synergies, toys present different challenges from books, and shoes different challenges from luggage. Smart retailers will take a closer look at the costs of bringing each item to each consumer — the cost-to-serve — to decide how to merchandise their offerings and ultimately grow their business by applying the right retail model at the right time.

Reprint No. 06103

Author Profiles:

Tim Laseter ([email protected]) serves on the faculty of the Darden Graduate School of Business at the University of Virginia. Author of Balanced Sourcing: Cooperation and Competition in Supplier Relationships (Jossey-Bass, 1998) and formerly a vice president with Booz Allen Hamilton, he has more than 20 years of experience in operations strategy and supply chain management.

Elliot Rabinovich ([email protected]), a faculty member at the W.P. Carey School of Business at Arizona State University, is an expert on Internet retailing and supply chain management. He is the coauthor of Logistics and the Extended Enterprise: Benchmarks and Best Practices for the Manufacturing Professional (John Wiley & Sons, 1999).

Angela Huang ([email protected]), formerly a financial analyst at the Reserve Bank of New Zealand, is an associate in Booz Allen Hamilton’s Cleveland office. She works with clients on operational challenges, including retail supply chain issues.
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