The rise of eCommerce is driving a lot of adjustments from product makers, retailers, and connectors along the supply chain. While it’s still not clear what retailing will look like 10 years from now, it’s apparent that customers have a lot to celebrate.
That’s because much of the innovation occurring today is aimed at improving the customer’s experience, most notably in fulfillment. Merchants have always strived to offer great products at good prices. At the same time, the fulfillment experience is becoming equally important. eCommerce has raised expectations for delivery speed and low prices, but also brought a whole range of new demands from customers.
In the direct-to-consumer world, meeting customer demands means providing visibility throughout the entire experience:
• Can your customer find your product online?
• Is the product available?
• What are the shipping times and costs?
• How quickly did it get to the customer?
• Was it well packaged?
• Were they able to track the order along the way?
Building that visibility all the way from when it’s produced to when it arrives would have been unimaginable (and too costly) ten years ago, but it’s rapidly becoming an industry standard.
Much of the innovation occurring today is aimed at improving the customer’s experience.
The return process is another great example of how the digital economy is changing retail. Some customers may still prefer to return online purchases in the store for a refund or store credit. However, some retailers are finding that providing a pre-printed shipping label not only saves time and reduces hassle for the customer, it also reduces cost. With a pre-printed label, returned merchandise can be routed directly back to the preferred location for repackaging, without tying up store associates who could be processing new sales in the store.
Collectively, these types of improvements—from product discovery through delivery—reduce friction in the supply chain, improve customer satisfaction, and ultimately enhance a company’s brand appeal. Converting a supply chain for eCommerce means some of the investments brick-and-mortar retailers made over the last several decades are becoming obsolete, or at least need significant upgrades. The distribution network that was set up to serve brick-and- mortar stores is dramatically different from the network required to fulfill direct-to-consumer orders. Everything from the location and size of distribution centers, to their material handling equipment, to product sourcing networks, and inventory strategy is changing.
These types of improvements—from product discovery through delivery—reduce friction in the supply chain, improve customer satisfaction, and ultimately enhance a company’s brand appeal.
To meet these challenges requires investments in a few key areas—technology, leadership talent, and analytics and information capabilities. Skimping on any of these will reduce a retailer’s competitiveness.
The technology used to support supply chain affects customer experience, cost position, and flexibility. To shift from a centralized warehouse system to a distributed model that brings products closer to the customer, retailers need visibility and real-time information about their network. An integrated technology framework that provides relevant, actionable data turns distribution networks into a strategic asset that’s essential to succeed in eCommerce.
To meet these challenges requires investments in a few key areas—technology, leadership talent, and analytics and information capabilities.
Managing the modern supply chain is a complex undertaking, requiring a large number of employees to drive continuously evolving processes, and integrate new systems and technology. Leadership talent in today’s supply chain requires more specialized knowledge and relevant skill-sets that match today’s technology.
Analytics and data were much less complicated in years past, when retailers were largely looking at transportation costs and shipping rates. Today, we have much better data and information that can help dynamically analyze where shipments originate, how to consolidate and package those shipments, and which combination of those variables provides the best customer service across their distribution network.
eCommerce success will be a direct result of how businesses support customer experience and meet demands. It is a world where creating a unique and differentiated customer experience is key. Luckily, we have the tools to deliver much more value to customers by innovating in the supply chain and driving toward greater execution. Companies that recognize and invest in those tools will be poised for ongoing success in this increasing competitive retail environment.