Executive Briefings

E-Commerce Continues to Drive Supply Chain Transformation

Analyst Insight: The growth of e-commerce, the evolution of consumer expectations, and the globalization of e-commerce have resulted in many changes in the requirements of retail supply chains. These changes demand that retail supply chains handle more volume, quicker, and around the world. Supply chains are at a crossroads to either constrain an organization’s success or to enable the organization’s profitable growth. - Jim Tompkins, CEO, Tompkins International

E-Commerce Continues to Drive Supply Chain Transformation

The impact of e-commerce on retailers, wholesalers, distributors, consumer product companies and 3PLs has been huge. Of course this has been evolving over the last 20 years, but now there are three new challenges that require the attention of all organizations: cross-border commerce, customer centricity and omnichannel.

Cross-border Commerce

Cross-border commerce is when a company in one country sells through their domestic website to a customer in another country or when a company in one country sells through a marketplace in another country to a consumer in that other country. For example, cross-border commerce is when a U.S. company sells to a consumer in China via their U.S. website, seller.com, or when a U.S. company sells to a consumer in China via the Alibaba website, Tmall.ch. Global consumers desire the best products at the best prices, without any constraints about what country the seller is located in. Cross-border commerce is rapidly growing from $233bn in 2014 to $994bn in 2020. The challenge and complexity of cross-border commerce is huge and obviously places major global demands upon our supply chains.

Customer Centricity

Customer centricity is achieved when an organization places the customer at the core of their business strategy. When the organization contemplates the impact of every decision on the customer and when the organization is dedicated to responding to the consumer’s needs and desires. The four categories of consumer expectations are:

• Price: the cheaper the total price the better

• Selection: the broader the selection the better

• Convenience: the quicker the delivery the better

• Experience: the less friction and the more personalization the better

These four categories continue to evolve and so too must your supply chain to assure a total focus on the consumer.

Omnichannel

Omnichannel has been a major topic of discussion for the last five years. Unfortunately, what is most often discussed is only 25 percent of the true meaning of omnichannel. To fully cover omnichannel the following four topics must be embraced:

• Consumers - Buy anywhere, fulfill anywhere, return anywhere, and a seamless consumer experience.

• Retail - Seamless inventory and seamless sales experience.

• Logistics - Integrated distribution and fulfillment, localized inventory, and high-velocity final delivery.

• Merchandising - Analytics, channel management, and social media.

Designing one’s supply chain to meet all four of these topics is required to truly be omnichannel.

The Outlook

Obviously, every company must upgrade its supply chain to meet the requirements of these three topic areas.

The impact of e-commerce on retailers, wholesalers, distributors, consumer product companies and 3PLs has been huge. Of course this has been evolving over the last 20 years, but now there are three new challenges that require the attention of all organizations: cross-border commerce, customer centricity and omnichannel.

Cross-border Commerce

Cross-border commerce is when a company in one country sells through their domestic website to a customer in another country or when a company in one country sells through a marketplace in another country to a consumer in that other country. For example, cross-border commerce is when a U.S. company sells to a consumer in China via their U.S. website, seller.com, or when a U.S. company sells to a consumer in China via the Alibaba website, Tmall.ch. Global consumers desire the best products at the best prices, without any constraints about what country the seller is located in. Cross-border commerce is rapidly growing from $233bn in 2014 to $994bn in 2020. The challenge and complexity of cross-border commerce is huge and obviously places major global demands upon our supply chains.

Customer Centricity

Customer centricity is achieved when an organization places the customer at the core of their business strategy. When the organization contemplates the impact of every decision on the customer and when the organization is dedicated to responding to the consumer’s needs and desires. The four categories of consumer expectations are:

• Price: the cheaper the total price the better

• Selection: the broader the selection the better

• Convenience: the quicker the delivery the better

• Experience: the less friction and the more personalization the better

These four categories continue to evolve and so too must your supply chain to assure a total focus on the consumer.

Omnichannel

Omnichannel has been a major topic of discussion for the last five years. Unfortunately, what is most often discussed is only 25 percent of the true meaning of omnichannel. To fully cover omnichannel the following four topics must be embraced:

• Consumers - Buy anywhere, fulfill anywhere, return anywhere, and a seamless consumer experience.

• Retail - Seamless inventory and seamless sales experience.

• Logistics - Integrated distribution and fulfillment, localized inventory, and high-velocity final delivery.

• Merchandising - Analytics, channel management, and social media.

Designing one’s supply chain to meet all four of these topics is required to truly be omnichannel.

The Outlook

Obviously, every company must upgrade its supply chain to meet the requirements of these three topic areas.

E-Commerce Continues to Drive Supply Chain Transformation