Depreciating items such as laptop, desktop or other hardware are difficult to do business with. As we could see in case of HP how they were struggling to make money. Technology advances so fast that, the existing tech items depreciate fast. So, it is ideal for any business to maintain less in inventory but still, they will need to ship fast. With the introduction of Amazon prime, delivery speed has been an essential part of online shopping. We pretty much get everything delivered within 2 days from Amazon. So, I understand why it will be difficult for HP if they want to keep an inventory to ship sooner. But, consumers have a lot of other brands to choose from. While I do not think delivery speed will be a problem from end customers when they shop in brick and mortar stores. Delivery speed is a critical factor only when the purchase is being made online, via a direct channel or via retailers such as Walmart or Amazon. If HP maintains a huge inventory, they may face inventory losses due to component devaluation cost, price protection cost product return cost, obsolescence cost like what they faced before ( Callioni, Montgros, Wright, 2005).
I believe HP should let the retailers manage inventory so the delivery speed can be maintained. We read how HP reduced its inventory cost by restructuring the supply chain. Enabling IDC helped them identify and rectify cost.
But understandably this process will take time to ship a product once a customer makes a purchase. So, if it is possible, HP should maintain an inventory with retailers, but HP will have to work hard to predict demand on their product types.
Otherwise, they can build regional warehouses to maintain inventory and then ship when required.
I have amazon prime membership, so I prepay to get everything I buy on Amazon, to be delivered in 2 days. But other than that I try to seek free shipping. I subscribed to Amazon Fresh to get grocery delivered by Amazon, mostly because the winter on Boston was brutal and I could not drive to the supermarket. So, I never buy anything else for which shipping is not free. As a matter of fact, 9 out of 10 online shoppers prefer free shipping as online shopping incentive (Gesenhues,2016), which means, free shipping is not going anywhere anytime soon.
Sometimes, I order delivery of food from restaurants, which charge for home delivery.
So, I believe if I get stuck in the snow again, and if I do need grocery, then I am ready to pay a fee to get the grocery or food delivered.
On the same note, I pretty much buy everything online, my phone, gadgets, appliances or clothes. I find it easier and hassle-free way to shop and most of the sites offer 2 – 3 days shipping and most of the time for free or many times there is a minimum purchase amount to get free shipping. Hence I think for only one service I may pay a fee that is food delivery and grocery delivery under certain circumstances.
References:
Retrieved on 12/4/2018. Retrieved from https://hbr.org/2005/03/inventory-driven-costs
Retrieved on 12/4/2018. Retrieved from https://marketingland.com/e-commerce-report-9-10-consumers-say-free-shipping-no-1-incentive-shop-online-180280
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