Ever hear of Direct Plants? They offer a valuable lesson in the changing realities of the e-commerce merchant. Today this successful online seller has moved far beyond single platform merchandising to embrace a growing ecosystem of online platforms. The Direct Plants store now follows customers across multiple platforms, supercharging the online buying experience.
It’s a strategy that’s gaining rapid momentum. Yet, how do you maintain back-office and inventory control while orders fly in from many directions? This article takes a deep dive into this e-commerce model, presenting ideas, examples and strategies that can help transform omnichannel retail efficiency and profit. You’ll learn how to:
- Save time and money on listing, managing inventory, picking and shipping operations
- Automate processes that bring new simplicity and control to challenging rapid-growth operating environments
- Avoid overstocks, understocks and seasonal unpredictability and other demand forecasting challenges
Table of Contents
Content Summary
What We Know: Consumer Shopping Behavior Has Changed
Multichannel Listing Software
Customize Your Inventory Software to Scale and Descale to Demand
Having the Edge on Shipping and Fulfillment
Controlling Operations Leads to Scaling Business
Over the past few years, your retail business has probably needed to pivot, grow and adapt. Now, it’s important to have agile systems and processes in place that position you for further growth.
Brands standing out in ecommerce are those able to optimize every level of the customer experience, from awareness, through the purchase journey to shipping and fulfillment.
Many elements are out of retailers’ control: supply chain issues, inflation, and a labor shortage are just a few examples. But having an easily integrated solution for inventory, order and warehouse management processes are two ways to stay ahead of these potential challenges.
In this article, we’ll discuss solutions to common growth challenges and outline best practices to position your business for scalability.
What We Know: Consumer Shopping Behavior Has Changed
Linnworks – an ecommerce solution for brands – surveyed more than 1,000 shoppers in the UK and the US. The findings showed that consumers want seamless, connected shopping experiences. The simplicity of online shopping came to be expected during COVID-19 restrictions when many people relied more on ecommerce than before. Two years postpandemic, we have seen this need increase.
This is a permanent behavior shift, according to the survey findings. Online shopping is here to stay. Three out of four shoppers said they will be shopping online more after the pandemic than before.
So how do you compete and win when there are so many players in the space?
“The entire customer journey needs to be highly curated and managed,” said Callum Campbell, CEO of Linnworks. “As a brand or retailer, make sure that you’re delivering a great experience to your customers at every touch point with them.”
“Convenience is king,” Campbell added. He said the modern consumer wants a product on a channel where he is already shopping. The consumer may want the product delivered fast – tomorrow or in three days, or at 6:00 p.m.
“Whatever the consumer wants, as a brand of retailer, you want to be giving that proposition.”
Multichannel Listing Software
It’s impossible to count the number of different selling platforms online, as new ones are created daily. Each has different specifications on its listings, and entering every product one-by-one would be near impossible.
This is a familiar concept for Shahin Sacki, founder of Rex Brown Ltd. of London, ecommerce experts. Rex Brown helps retailers like Unilever, Proctor and Gamble, L’Oreal, Fitbit, and Mattel get their products to customers online. Having to crosslist products on Amazon, Groupon, eBay and others, Sacki speaks multichannel like a second language. He said selling on multiple channels would not be possible without a real-time multichannel listing system.
“Each and every single one has its own criteria: has its own titles, image, formats, financial reconciliations, you name it,” Sacki said. “You’d have to master every single one and upload everything manually.”
With multichannel listing software, retailers can expand their product lines and selling channels to meet customers where they are online. This concept of “always on” shopping sets up retailers to align with the new environment.
The listing software manages and optimizes product listings across key selling channels.
Retailers can streamline their listing processes by using bulk listing formats, which minimizes errors and redundancies, as well as freeing up staff time.
Automating this process allows you to manage your product listings and sell across a wider range of channels at scale, increasing your customer reach and potential sales.
The Covid pandemic brought a laser focus to retailers who were suddenly acutely aware of the importance of multichannel selling. Sacki said the pressure on ecommerce sellers was like an “unplanned black Friday.”
“It almost verified the business model because the brands were very Amazon-focused, but they didn’t see the impact of every other platform and the fact that if no shop is open, everyone has to go online,” he said.
Automating using a system like this has a multitude of benefits, including:
- Bulk listing tools that ensure accuracy across platforms
- Synched inventory listings showing in real-time
- Automatic inventory updates when a product is restocked
- Data that predicts seasonal product demand
In addition to order management, a customized, advanced reporting system is crucial to facilitate business expansion. Insights into orders, stock levels, sales, shipping performance, and returns will enable retailers to see trends and forecast needs. For example, if a retailer gets an order on Amazon, and gets an order on eBay, the retailer would need to log in to each platform manually and download the orders. Imagine having a hundred marketplaces.
“Once you have consolidated data, you can then analyze it a lot better,” Sacki said. “That’s the beauty of a tool that has all of the orders in one place,” he said.
The data consolidation helps predict sales rising due to seasonal fluctuations, for example.
“And that’s where the order management tools are massively useful,” he added
Customize Your Inventory Software to Scale and Descale to Demand
Custom software was a game-changer for International Paint Suppliers, a custom car paint and family-run business in Leicester, UK, founded 30 years ago.
In 2014, the company expanded from custom car paint locally to make more of an international presence. When Covid lockdowns hit, everyone was home and doing improvement projects, said Principal Enrique Tomlinson.
During that time, orders came in at an absolutely staggering pace. Add to that, the company makes more than 300,000 colors of paint, each in a variety of volumes and formats, like bottles and tins. Overall, the company had 25 million SKUs.
And it had launched a new product, a car paint in a small portable bottle, like a nail polish -which was proving to be overwhelmingly popular. But using separate selling accounts, employees had to process orders manually, one by one, until that became too much work.
“We found that we were not able to keep up with demand,” he said. “And we were actually having to reduce the amount of sales that we could have had, because our processes weren’t efficient enough.”
Using a customized inventory management software, the company has tripled its profits in two years. The system was able to be tailored to International Paint Suppliers’ needs, managing the huge volume of SKUs. Having so many products automatically stocked and organized allowed the company to keep its prices competitive, and ward off copycat product manufacturers.
As a result, it is seeing 30 percent year over year growth and International Paint Suppliers now sells on several continents.
“It is amazing when you consider that most retailers in the UK, they’re looking for a 2 to 5 percent growth year on year. It’s really, really incredible,” Tomlinson said.
Sustainable growth is top-of-mind for many business owners. The Linnworks study showed that almost half, 48 percent, of owners who updated their connected operations across new sales channels by investing more in IT operations in 2021. And 71 percent of businesses plan more IT investment in 2022.
It’s not unusual for business owners to think they have all the data they need to expand, because an internal number of spreadsheets has all the numbers. Somewhere.
What is lacking is a full dashboard to compare and analyze those numbers. Taken out of context, a figure on sales volume, for example, doesn’t tell the whole story. Insights can inform all kinds of investment decisions across operations, from infrastructure to omnichannel development.
Among the challenges businesses face in controlling their costs and making sound decisions is that data is siloed like this.
A recent international survey of retailers by Linnworks showed:
- 70% can’t leverage their own data because it’s scattered
- across multiple spreadsheets or systems 20% have limited real-time inventory data visibility
- 12% have tracking visibility problems
It is really more important than ever, frankly, for brands to get control of what they’re doing across all those digital channels, the information they’re presenting on those digital channels and really building that relationship with those consumers. – Alex Becker, vice president of NA sales with Linnworks
The US retailers in the survey had even more pronounced data issues including:
- 100% more likely to have delivery tracking visibility
- 210% more likely to have problems seeing inventory levels
These challenges result in retailers over spending on resources and time to gather information to take to analysts, or worse, making ill-informed decisions that are based on limited sets of data.
That is why these systems are crucial to maximizing your time, said Alex Becker, vice president of NA sales with Linnworks.
“Brands are trying to ultimately build relationships with those consumers and maintain those relationships,” Becker said. “They want a really good customer experience, but a consumer is only one click away from going into your competition.”
“It is really more important than ever, frankly, for brands to get control of what they’re doing across all those digital channels, the information they’re presenting on those digital channels and really building that relationship with those consumers.
Having the Edge on Shipping and Fulfillment
One area out of retailers’ control is how inflation is impacting shipping and order fulfillment costs. As shipping costs rise, it is more important than ever to ensure you are streamlining your processes.
Shipping management systems can help increase speed of delivery across all selling channels. A bespoke design can automate carrier selection based on distance, warehouse location, and product information.
Speed is critical in this ecommerce acceleration. A McKinsey study revealed that 90 percent of American shoppers expect only two to three days shipping time on everything they purchase.
Campbell said shipping affects the customer experience, basically delivering on the promise that you made at checkout, but it also has a cost associated with it.
“If you’re shipping orders at scale, any kind of volume, it can become very costly. And so automating that means that you don’t make errors in assigning orders to the correct shipping service. Your customer is happy, and you also automate that in a way that means you reduce your costs. You become more efficient as a business.”
The other part that gets complex is your distribution and fulfillment strategy, Becker said.
Controlling Operations Leads to Scaling Business
Overall, realizing your business’ potential necessitates having your data in front of you. You need to be able to see what is working, and how to maximize that, as well as find errors, and how to eliminate those or restructure your selling to improve them.
Imagine the possibilities if you could step back and think bigger.
An assessment of your systems in place now will expose gaps and show opportunities that would have remained hidden otherwise.
To summarize, there are a series of steps you can take to master multichannel selling. You can use software to master your listing on multiple channels; automate your inventory management to scale and descale on demand, and finally streamline your shipping and fulfillment operations.
“If you don’t automate, it’s likely that the economics in your business won’t be scalable. So you could be losing money or losing margin on every sale. And as a result the business is not as successful.”
Agility is another key to scaling a business properly, Campbell said.
Thinking small means you don’t have the confidence to basically be in control of your business to move quickly with the market, he said.
“So if customer expectations shift, you are able to move quickly, you’ve got the right technology in the business. You can plug in a new channel. If customers expect a new shipping service, you can work with a new carrier. So it gives you the ability to move quickly to be in control, centrally, such that you can make decisions fast.