Do you have a really good e-commerce business plan with all the nitty-gritties chalked out to the T? But, wondering what is the key success element in your well-thought business recipe? Well think no more, we’ve got you covered! Read on to know how supply chain management can be your secret success ingredient.
E-commerce has brought in a whiff of fresh air in the traditional brick-and-mortar format of retailing, changing everything right from the way consumer packaged goods (CPG) are sold to the way consumers shop. E-commerce or Electronic Commerce can be defined as a marketplace that allows individuals or firms to conduct business over an electronic network like the internet. Operating in four market segments namely as B2B, B2C, C2C and C2B, e-commerce is one of the most cost-efficient business models that has the ability to compete with not only those who encompass in the e-commerce radar but even those who operate under the purview of the traditional market.
What makes the e-commerce business model work is that firstly, for the customer, it offers a high level of convenience and selection in terms of product assortment and shopping within the comfort of their homes at any point of the day and secondly, for the retailers, it eliminates major fixed costs associated with the brick-and-mortar model. However, just as every coin has two sides, this business model too has a few flaws and challenges that are listen herein,
- No instant gratification for customers as once they place an order, they have to wait for the product to be delivered to the address.
- Minimal customer service and little or no interaction with humans is a big challenge.
- Inventory handling is a challenge to both the newcomers in the industry as well as the established players.
- Consumers cannot touch and see a product, hence the level of trust among consumers is low, thereby hindering the online sales of many products.
These lists of risks and challenges are an accepted reality of today’s fast paced ITES scene. Consequently, in order to be successful in the e-commerce world, businesses need to adopt a leaner and efficient supply chain strategy to overcome these roadblocks. Right from production to assembly and the final delivery to the end-user, everything and every product requires a different logistics management approach. This is exactly what supply chain management is all about, making it the backbone of electronic commerce.
Devising SCM Strategies the E-commerce Way
When consumers make an online purchase from a particular e-commerce site, there are several factors that are taken into consideration right from the way the product is manufactured, designed, distributed, delivered and supported by the seller. There is a direct relationship between the performance of supply chain of a business and customer loyalty, as the orders are relatively small but the complexity lies in order fulfillment and delivery. The major players in the e-commerce space use the services of third parties who have the necessary experience to help bridge the gap between the customer’s expectation and the actual business performance. Other than these, businesses should focus on the platforms that are responsible for driving sales and optimize these platforms to enhance customer experience. Vendors in the electronic space have turned to a more integrated approach across all mediums, giving birth to omni-channel retailing that combines the advantages of brick and mortar stores with that of e-commerce and m-commerce to enhance value. Last but not the least, a flexible and responsive supply chain is essential to create a sustainable competitive advantage and to cater to the constantly changing demands of the market.
SpendEdge can help companies draw insights and help bridge the gaps in procurement and sourcing, thereby devising efficient supply chain strategies to build customer satisfaction and profitability.