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

9 Steps to Multichannel Commerce

This is a slide deck, which I produced and uploaded to slideshare.net.  Click here.

Filed under: multichannel commerce, , , , , , , , , ,

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 seventh step to multichannel commerce

We’re getting there, slowly but surely.

This is the step where everyone wants to start … it’s time to set up a web site.

Some of my consulting colleagues have reported there are over 900 ecommerce platforms, from which a merchant can select, upon which they can build an ecommerce store.  The variables seem to go on forever … but don’t forget the previous six steps we’ve outlined.  Those are the non-negotiables (or at least, should be).

After those, nearly everything may negotiable.  Merchants all think their business is unique and needs features or capabilities which other merchants don’t need.  Or they need some feature tweaked.  The only thing I would remind you of is that changes, tweaks and new/modified features cost money.  So, before you go requiring lots of customizing, make sure the customization you need will actually make more money for you than taking the feature, the way it comes.

Consultants love to help clients customize things … often makes them more money.  But many, if not nearly every, merchant asks for things that do not increase sales and may even increase cost or have other negative impacts.

There is a lot to be said for finding an ecommerce platform that has:

  • experience in your industry
  • experience with your other applications, such as Product Master, Inventory, OMS, WMS
  • uses a technology your staff is already familiar with, so you can make minor changes and fixes, yourself
  • an effective user interface, which merchandisers, customer service reps and others can be quickly trained on
  • a plan to stay up-to-date on marketing and technology improvements
  • already supports your current marketing activities
  • supports your current payment processors
  • a good cultural fit with your present staff

When you select your ecommerce platform, you must include every department in the decision.  Don’t let the technology people drive the decision without major input from merchandising, customer service, finance, operations.  It’s very expensive to change ecommerce horses … and the technology itself is not always the most important consideration.

It’s about people and process … the technology is actually less expensive to change.

Then again, take advantage of the technology to improve your processes and perhaps lower your labor costs.

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

The fourth step to multichannel commerce

Step 1 = a single, unified product master

Step 2 = a cross-platform, multi-channel order management system

Step 3 = a single view of inventory, updated in near-real-time.

Step 4 = a warehouse management system capable of item-unit-picking and parcel shipping (fulfillment processing)

More and more warehouse operators are coming to an appreciation of the differences between shipping to stores and shipping to consumer.  For those who don’t, the most typical problem is that both processes use similar terms, but the definition of the term varies with the environment within which you’re working.

Picking for a shipment to a store, is often at the case level.  Picking for a consumer is almost always at the unit level.  A case contains multiple units of a single item.  Pallets contain multiple cases, which may be of a single unit or mixed units — but all in cases.

Fulfillment of consumer orders usually requires:

  • more complicated picking instructions
  • variable picking strategies
  • more difficult packing (read “slower”)
  • slotting optimization (to reduce picker travel time)
  • more sensitive cut-offs for picking orders
  • coordination with multiple parcel carriers (USPS, UPS, FedEx, DHL and others) for pick ups based upon class of service (ground or expedited)
  • near-real-time updating of order status and inventory status

These are just the highlights … the actual list goes on much longer.  I’m only trying to highlight the differences between retail fulfillment and consumer fulfillment.

More and more Warehouse Management Systems (WMS) are capable of handling both retail and consumer fulfillment.  So, the more difficult matter is personnel management and scheduling.  In a typical retail operation, staff peaks in August-September for shipping Christmas inventory to stores.  And the staff increase is 20-30 percent over base levels.

However, for consumer fulfillment the increase in staff may reach 200-500 percent and run from early November thru mid- to late-December.  This dramatic increase puts a premium on the ability of Human Resources to hire quickly and well; plus the ability to train new people on any specialized tasks.

Filed under: Ideas, Opinion, , , , , , , , , , , , , ,

Systemax exits hosted e-commerce software business

There is probably a lot behind this story in DM News.  But ultimately, it’s a failure in execution.  Compounded in my view, by a mismatch between the vision of the company and the vision of it’s prospective clients.

Fortunately, there are still a lot of good solutions in the marketplace — perhaps not integrated to the breadth that PCS promised, but still good solutions.

Filed under: Direct Commerce, News, , ,

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