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on May 14, 2021 by Marcus Startzel in Fulfillment

Ecommerce Supply Chain Guide: Using Digital Transformation for Strategic Advantage

Ecommerce is here to stay. The global pandemic accelerated the shift to online shopping by at least two years, according to eMarketer.

Across retail categories, consumer behaviors are forever changed, with no signs of reversing. The flexibility, choice, and speed of ecommerce have made the channel (and the consumer) king.

Although ecommerce simplifies life for the consumer, it complicates nearly everything for brands. The stressors on supply chain management have grown exponentially, thanks to consumer expectations and an increasingly connected global world. As McKinsey points out, “Service represents the primary factor that brands and retailers can use to differentiate themselves and ‘delight’ omnichannel shoppers.”

Digital demand for goods is higher than ever, adding greater stress and complexity to supply chain management.

If exceptional service is the end goal, how do you build and future proof a supply chain that will grow as your business grows? Planning for the future starts with a deep understanding of the supply chain and the partners you need to succeed. Both new DTC and established retail brands need help navigating the barriers to entry and knowing what they don’t know about a constantly changing online marketplace and consumer. Read on for guidance on what you need to know to use digital transformation for strategic gain.

Ecommerce Supply Chain Barriers (and Opportunities) to Entry

The grass isn’t always greener on the other side when it comes to entering the modern commerce marketplace. Emerging or native DTC brands and traditional retail face their own unique ecommerce obstacles across logistics and supply chain management. Although not an exhaustive list, the table below outlines some of the more common strengths and weaknesses experienced by both sides of the retail equation.

 

Strengths Weaknesses

Native DTC

  • Direct connection to customer
  • Treasure trove of customer data 
  • No reliance/dependency on brick and mortar
  • Speed, agility, customer service are hallmarks
  • No (or niche) brand awareness
  • Need to find and grow customer base
  • Limited resources to compete
  • Vulnerable to emerging competition 
  • Keeping up with demand when/if growth happens in unpredictable cycles

Traditional Retail

  • Established brand awareness
  • Built-in customer base
  • Big box presence nationally
  • Deep resources to compete or buy competition 
  • No direct connection with customer
  • No customer data or delayed intel 
  • Lack of speed or agility due to fixed processes
  • No insight into “out of stock” or overstocked products

 

As ecommerce complexity increases, so too do the questions and decisions a brand must make.

  • Where should you sell products?
  • If you have a branded store, should you expand to Amazon, Walmart, and Target?
  • When does it make sense to capitalize on Amazon’s reach and scale versus building your own branded universe?
  • How should I allocate ad spend between in-platform and off-platform advertising?
  • Which products will sell best in which channels?
  • How can you differentiate supply and demand across channels?
  • What’s the cost per acquisition (CPA) for new customers across channels?
  • Where do you store inventory to fulfill across channels?
  • What advantages do you gain from using a 3PL for fulfillment?
  • What other supply chain partners can help you get to the next level in ecommerce?
  • How will these partners “partner” with each other?

The ecommerce opportunity is knocking. How you respond today will chart your growth trajectory for tomorrow. See the urgency ahead of you as an opportunity to create a resilient, efficient, and fast supply chain for success.

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Choosing the Right Supply Chain Partner

You’ve made the choice to outsource part or all of your logistics and supply chain management. Which partner(s) do you really need and what do they bring to the table? Typically, a business can tap into any number of companies throughout their supply chain, such as a 3PL, a DTC consultant, an ad agency, warehousing solution, tech platform, etc. Your partners will have their own discrete goals, knowledge, and resources related to the function they perform for your business. A good rule of thumb is to focus on how these partners can work together, integrate systems and processes, and relieve the oversight burden on you. Your objective is to centralize your ecommerce strategy and extract the most valuable insights across the supply chain to sell more.

The right supply chain partners should remove complexity, not add to it.

Your partners should remove complexity, not add to it. The right supply chain partner can make or break your business. Key to choosing the best partner is understanding the supply chain and how outsourcing can benefit your business:

image of moving shopping cart holding product boxesEcommerce sales: Consider a partner who has proven expertise in listing management and marketplace channel decisions. Ecommerce sales are akin to your brand’s front door. You want to make the best possible first impression to as many viable customers as possible. An ideal partner can guide you to selecting and optimizing products in the right marketplace and channels, from Walmart and Amazon to your own branded site. Importantly, a solid ecommerce sales partner returns real-time insights and data not only on your demand but also your competition’s — and actively optimizes to both.

image of brick-and-mortar retail storefront iconIn-platform advertising: You need compelling creative ads, but also a smart strategy that invests ad dollars for the best ROI. How and where are buyers (and repeat ones) finding you? How easy is it to discover your products within channels? Your ad partner should provide individual platform insights as well as learnings across platforms to improve overall performance. If you plan to use an Amazon ad agency, will their capabilities and insights extend to other channels and platforms? Remember, just because you built it, doesn’t mean your customer can find it.

image of supply chain hub and spokeTechnology integrations: The front of the house needs to be frictionlessly synched with the back of the house at all times. Your partner’s ability to receive and communicate orders on/across marketplaces is critical. As soon as an order is placed, what happens next? 3PLs most commonly fill this gap, providing connections between fulfillment and sales transactions. In other words, products are picked, packed, and ready to ship without error. Modern commerce tech partners can (and should) do more than basic logistics. Knowing an order is ready is only a part of the equation. How does supply communicate with demand to inform inventory levels, shipping, advertising, and more?

Image of box with this side up arrows on the sideFulfillment solutions: Although there is overlap with tech integrations, fulfillment presents its own unique challenges. From how products are packed and shipped, creating multi and variety packs, to returns and marketplace maintenance, a fulfillment solutions partner has a lot of plates in the air. Look for a partner with experience and results in operational efficiency across time, touches, and movement.

Image of delivery truck and clock iconLogistics: Many businesses focus myopically on the logistics partner. Getting product out the door fast doesn’t guarantee delivery to your customer fast. Smart partners optimize carrier contracts and shipping options to get you as close to customers as possible. They have a real-time view of inventory levels and can plan accordingly. Most importantly, this partner must feed those insights up and across your supply chain.

 

One, two, or 10 Partners: What’s the Right Mix?

Although every business is unique, a resilient, effective and fast supply chain demands connectivity. If your partners operate in silos, you’ll be missing out on critical insights to improve the front or back of the house operations. If partners refuse to collaborate, the onus is on you to provide constant oversight and ensure sharing of information. It’s important to be honest about your own strengths and weaknesses as well. If service truly is your north star, look for partners who embody that value and deliver on it consistently.

A resilient, effective, and fast supply chain demands connectivity across all your partners.

Most importantly, a supply chain partner should make your life easier, not harder. Having a trusted and expert partner frees up your time to focus on building your brand, deepening customer relationships, and delivering an unmatched product experience. How are your partners aligned with your mission versus offering a cookie-cutter approach to the ecommerce supply chain? Are they capturing and returning customer data to increase your expertise and operational efficiency? Look for a partner with insights to impact your whole business versus siloed recommendations that benefit only their piece of the supply chain.

Whitebox unites supply and demand into one integrated ecosystem to help brands sell and move more.

See the Whole Supply Chain Picture

Digital transformation across the supply chain can grow your business in new and lucrative ways. Key to your success is finding the right partner to grow with you. Whitebox connects both sides of the business in one integrated ecosystem, so you can sell more products and fulfill more orders. We help brands seize every opportunity in the supply chain. Understand the consumer journey holistically across channels. Get the whole picture of which channels perform and what your competitors are doing all in one place. Work with a partner that embodies cutting-edge innovation, deep ecommerce expertise, and is scaled for your growth. Whitebox delivers the data and insights you need to succeed in modern commerce today and tomorrow. Let’s chat.

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