Pottermania strains the supply chain

Retailers expect new Harry Potter book to be largest-ever e-commerce shipment

It's another five days before the latest Harry Potter book is due to hit store shelves. Yet for weeks, the fictional orphan-turned-wizard-in-training has been causing a frenzy for Web developers, logistics planners and distribution groups at big real-world companies such as Amazon.com Inc., Borders Group Inc. and Federal Express Corp.

Book No. 4 in the popular children's series is expected to yield the largest-ever shipment of an e-commerce product and has every link in the B-to-B supply chain scrambling to ensure that demand can be met.

"As a corporation, we've been planning on this release for months," said Rich Fahle, content manager at Ann Arbor, Mich.-based Borders.com.

As of last week, Borders had racked up more than 100,000 orders for the J. K. Rowling book, whose July 8 release has been shrouded in secrecy.

It wasn't until last week that the book's U.S. publisher, New York-based Scholastic Inc., revealed the title - Harry Potter and the Goblet of Fire.

That set off a chain of events at Seattle-based Amazon.com, which has received more than 275,000 orders for the book.

"Among other things, we had to quickly change all of the places 'Harry Potter IV' appeared on our Web site," said Lyn Blake, general manager of the online bookstore. "It sounds easy, but there's a lot involved in making that happen."

Amazon has been working closely with Memphis-based FedEx, which will ship the books from Amazon's six distribution centers. For the first 250,000 who ordered the book, Amazon is offering free Saturday delivery, ensuring a July 8 arrival.

To ship all the Amazon orders, FedEx will use 100 flights and 9,000 delivery workers out of 700 stations. It has also placed computers and FedEx information technology workers on-site at Amazon's distribution centers. Orders for the book have been astronomical - six times more than Amazon's former largest preorder of 43,000 copies of John Grisham's The Brethren.

"There is a ton of work going on behind the scenes from an IT standpoint," said Dottie Berry, FedEx vice president of customer integrated technologies.

For the past week, FedEx and Amazon have been checking data quality to ensure they have correct shipping addresses for preorders.

"We e-mailed all of our preorder customers and told them to go back and check their shipping address, since FedEx can't ship to a PO box. Customers then came back to our Web site and confirmed their address," said Blake.

Amazon also had to change its shipping and billing processes and systems. Usually, Amazon bills customers' credit cards as soon as their orders are picked, packed and sent out from one of its distribution centers. But in Harry's case, Amazon has been prepackaging early orders at the centers, while waiting to bill customers' credit cards until the books are shipped out at precisely 12:01 a.m. on July 8.

"This has required a work-around change in our software," Blake said.

But analyst Stacy McCullough at Cambridge, Mass.-based Forrester Research Inc., said that though the Potter shipment presents certain challenges, it's easier to prepare for than the holidays. "I think with this type of shipment, while it is very large . . . it's easier to handle than a mad rush on all the products," she said.

Meanwhile, Borders is capitalizing on Pottermania to drive traffic from its Web site to its 300 brick-and-mortar stores, and vice versa.

Customers who preordered the book online for home delivery will receive coupons for Borders' cafes and other in-store discounts.

Meanwhile, all of the brick-and-mortar stores are hosting special Harry Potter events such as midnight release parties, many of which are being filmed for video broadcast on the Borders.com Web site. The company has teamed with Centerseat Inc., a New York-based digital production company, for the Web broadcasts.

Visitors to real-world stores will also receive a special "decoder" gadget that they can hold up in front of a certain page on the Borders Web site to reveal the solution to a special Harry Potter riddle.

"There's a mania surrounding the release of this book, and anything to do with Harry Potter is getting massive traffic," said Fahle.

Staff intern Meghan Holohan contributed to this report.

Copyright © 2000 IDG Communications, Inc.

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