Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

Ecommerce Technology is more than the sum of it’s features

One of the essential parts of my consulting practice is vendor identification, evaluation, selection & transition.  Typically, a lot of the time needed for such an engagement is the development of the requirements document … an attempt to document every possible feature a client might need in the operations area being addressed.

But there is more to such an engagement than the rather mundane process of listing the set of feature requirements, and comparing it to what each prospective vendor claims they can provide.

An article in Multichannel Merchant, just today, makes this point well.  Entitled, 5 Tips for Choosing an Ecommerce Technology Provider , click to read it for yourself.

Matching up with the features & functions you need is an important place to start.  But as Raj Kumar Waghray writes, there are other broader, and ultimately, even more important factors:

  • evaluating your existing partnership
  • understanding your unique needs (my emphasis on understanding)
  • serving your needs?
  • collaboration quotient (not only theirs, but yours as well)
  • eager to serve mindset

There is a business culture component to matching up technology users with technology providers — don’t ignore it.  It is often the biggest factor of the long term success of your business relationship.

Filed under: Direct Commerce, Opinion, , , , , , , ,

Amazon’s Same-Day Delivery Will Shake Up Retail

The title of this post is the headline of an article posted at Ecommerce Times on Jan 17, 2013.  Here’s a link.

The article points out the very convenient solution Amazon can provide in some high-density markets for customers who are willing to pay for the convenience of not having to actually go to a store themselves for something they need today.

The author then proceeds to describe some of the warehouse systems, which Amazon uses to facilitate their same-day delivery service, including a reference to Kiva Systems.  Kiva Systems provides robots for use in the Pick & Pack process of direct-to-customer fulfillment centers.  It’s a great systems … I met with the founder when he was looking for both initial funding and early clients (back in 2003 or so).

But we need to keep this “same day delivery” thing in some context.

According to data from the Department of Commerce, under the category of Retail Sales, Mail Order and Ecommerce Sales still amounts to only seven percent of total retail sales … yes, 7%.

Now, that’s still a significant number.  And for some retailers, it may even account for a major percentage of their annual profit.

Please take note that in most direct commerce research, “free shipping” remains among the most effective promotions.

But given that same day delivery will only appeal to the more affluent, for whom delivery cost is not as significant as convenience, and given that all direct commerce accounts for only 7% of total retail sales … it’s somewhat of a stretch to say that same day delivery will “shake up” retail.

A bit too much hyperbole, for me

Filed under: Direct Commerce, Ideas, Opinion, , , , , , , ,

The Hidden Costs of Ecommerce Platforms

This is the headline on an article at Website Magazine.  Follow the link to the full text.

The article is based upon research funded by Demandware and executed by Forrester.  Probably the key line is that 43 percent of web merchants experience a TCO higher than they expected.  This is often partially justified by merchants claiming that they’ve over-built to support future growth (and that holds some legitimacy).

But it does not negate the more central fact that the sophistication of ecommerce platforms continues to grow at an escalating rate, which makes is increasingly and sometimes unexpectedly expensive to maintain your place in the marketplace, especially compared to your competition.

This situation makes is ever more important to plan ahead, select carefully, and probably not jump on every bandwagon that rolls by.

Filed under: Direct Commerce, News, Opinion, , , , , ,

The second step to multichannel commerce

Step one = a single, unified product master

Now, step two — a cross platform, cross-channel order management system [OMS].  By this, I mean an order management system which can support transactions and customer service in one or more physical stores, in a call center, at a web site, or on a mobile site.

This is a tall order.  And of course, it’s relevant, only if you really use all of these transaction channels.  Maybe you have one I missed — the point is that your order management system should support transactions in every channel thru which you sell.  That should include Amazon or eBay or any other ancillary channel.

This single OMS enables you to have a single view of your customer and allows you to fix in transaction in any channel in any other channel.  That is what your customers are beginning to expect.

Can you transaction on an iPad or iPhone?

Can your customers check themselves out (self-check-out at the grocery store, or self-check-out at Apple Stores)?  Walmart announced they are testing self-check-out on iPhones.  Where do you stand?

The principle here is that customers should be able to transact with you in a manner that suits them, rather than in a manner that suits you.

Filed under: Direct Commerce, Ideas, News, Opinion, , , , , , , , , , ,

Perfecting the Perfect Order

Kate Vitasek and Karl Manrodt wrote, in the May 10 issue of Operations & Fulfillment Advisor, a weekly electronic newsletter under the headline, Perfecting the Perfect Order. Essentially, their article advocates a new customer service measure which attempts to measure fulfillment execution against the customer’s expectations.
I like much of what they say. However, as they point out, most of the applications systems currently used to fill orders don’t allow us capture all of the information necessary to actually calculate this new “perfect order” metric.

There are really two typical shortfalls.

[1] Our systems don’t always capture what the customer wants. For example, do we know when the customer needs or wants delivery? Most consumer-oriented fulfillment systems don’t even allow for future ship-dates, much less future “receive-by” dates. And the most important date is when the customer wants to receive their order.

[2] Most of our systems do not capture actual delivery dates. Certainly, some do. And as Vitasek and Manrodt point out, the data is available from most carriers (even USPS captures this on most parcel shipments). But generally, we don’t get the data and don’t compare it to what the customer wanted, because we don’t even ask the customer what they want, we just assume they’ll be happy with when we ship it and when they get it.

Vitasek and Manrodt also wax philosophical about the definition of a “complete order.” My only disagreement is they make too much out of it; even while pointing out that their own definition is almost impossible to measure.

Overall, they make good points about how to measure real performance of order fulfillment activities. They’ve moved the ball forward.

Filed under: Direct Commerce, Uncategorized, ,

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