Rush Job

"Most people who are ordering from catalogs are ordering during the day," says Ms. Kassinos. "Then all of a sudden you get this Internet account and guess what? There's hardly any business during the day. And then about 5 o'clock in the afternoon up to about 12 o'clock, it gets heavy because everyone's coming home and getting on the Internet."

"The dotcom challenge, at least in my mind, is forecasting," says David Uprichard, Airborne's account representative in charge of Outpost.

Outpost reached its year-three sales projections in only four months, he says. "From our standpoint, that's hard stuff to deal with, it's explosive growth." Mr. Uprichard adds Outpost has definitely been a high-maintenance company compared with some of Airborne's older clients like Xerox and Siemens.

"I love the people at Outpost," he says. But he also concedes that they appear rattled at times.

"I don't know if it's because they're not sure they'll be around next year, or because they try to be so in touch with the customer that every jibe they feel, we feel.

"I think a lot of companies like Outpost are figuring out who they are, growing up as companies," Uprichard adds.

The relationship between Outpost and Airborne became especially intense during last year's holiday season, when orders began to flood in. Uprichard recalls some heated messages passing between him and an Outpost vice president.

"Overnight shipping was not invented for retailing," says Mr. Matathia, "but it has clearly been its most severe test."

"When FedEx and Amazon can deliver 250,000 copies of Harry Potter the first day, and on a Saturday," he adds, "it says as much about Fedex as it does about Amazon."

Uprichard says he has also had to deal with the somewhat unrealistic expectations of Outpost's marketing department. In the returns area, piles of 32-inch Sony TVs sold by Outpost sit in mangled shipping cartons.

"These were never meant to be bought this way," he says. "You're supposed to go to your local Circuit City and get one."

To increase the TV's survivability, foam is now injected into the packaging before shipment. Large workout equipment has been ruled out by Airborne, since it can only travel in the very limited "belly" space of their aircraft due to size.

A viable model?

The big question for Airborne and Outpost: Can the partnership approach compete as more traditional brick-and-mortar retailers go online, offering their own same-day delivery from their network of stores?

"After finding a local retailer online, there can't be anything better than walking into a store, and they say 'We'll have it set up today,' " says Matathia.

Outpost's Mr. Bowman disagrees. "You can't make money that way in this market segment. Groceries and books may be one thing, but when you're talking about a $2,000 computer, it's a different story.

"The [delivery] people need to be licensed and bonded," he adds. "You can't just throw it on the back of a bike and say 'good luck and Godspeed.' And try to find those people in a full-employment economy."

For now, Airborne is bracing for the upcoming holiday season. It's been told to expect at least 30 days of 25,000 to 30,000 orders per day.

(c) Copyright 2000. The Christian Science Publishing Society

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