September 19, 2018 by Jim Bengier, Chief Customer Officer
A B2B marketplace lets you sell more without having to own the inventory.
The June 2018 release of Gartner’s Magic Quadrant for Digital Commerce listed five strategic assumptions. Number two was interesting: “By 2020, more than 50% of online sellers will either list their products on marketplaces or sell third-party products on their core commerce sites.”
That’s only two years from now. Do you sell your products on a marketplace like Amazon or Walmart? Many vendors do. However, not nearly as many have a marketplace of third-party products on their own ecommerce sites. But it’s a growing trend, even for B2B commerce.
In fact, Amazon Business revealed in a September 2018 blog post that third party sellers make up more than 50% of their $10 billion in global sales.
In other words, Amazon Business doesn’t own the inventory for over 50% of sales. They just take the order, and route it to the appropriate third-party vendor for drop ship. With a marketplace, you could do this too. A marketplace lets you offer an expanded assortment of products that compliment your core inventory, so you can drive top line growth at a high profit, and without the expense associated with inventory. Imagine not having to own every product you sell. What could you do with that cash?
A lot, no doubt. But the first step on your journey to that enviable position, is to set up a marketplace. Below are the 7 key steps to success:
1. Implement a marketplace platform
There are several off-the-shelf options available, or you may choose to build your own, but you’ll need a way to manage your vendors and their products and where you want them to display on your ecommerce site.
2. Onboard vendors and their product catalog
There are two ways to add a new vendors and products to your marketplace. The first, is to provide a portal where vendors input or upload marketplace item information directly. In this case, the vendor will provide item or category recommendations. The second, is using an on-boarding provider with a network of suppliers to help you onboard new vendors quickly and efficiently so you can start selling new products in a matter of days. The advantage here is that the on-boarding provider can quickly load product information with the correct and complete item data. In fact, some of them can even make vendor and product recommendations based on aggregate sales data from across their supplier network. But even if you can outsource onboarding there are some internal considerations too.
For example, you’ll want to define who will determine which products to offer in your marketplace. Will you have separate team select the assortment to be sold on your marketplace? Or will your category buyers be responsible for selecting complementary products to include in your marketplace? Addressing (and communicating) this decision up front will save a lot of conflicts in the future.
3. Integrate vendor pricing, promotions, and inventory availability updates with your ecommerce platform
Once the catalog is loaded, you’ll need additional product information such as pricing, promotions, and inventory availability, and you’ll need a mechanism for regular updates. This lets you display products from the newly loaded catalogs on your ecommerce site, and always display accurate stock information so you can avoid canceled orders.
4. Determine which fulfillment options best suit your business
Your marketplace may offer several fulfillment options to the customer. The most common is to drop ship the product(s) to the customer’s address from the vendor. However, if the marketplace item is part of a larger order, some marketplace owners prefer their third-party vendors to ship the merchandise to them for order consolidation. That way the customer receives a single package. However, this may also delay delivery, so you’ll need to think about what works best for your customer base.
5. Capture marketplace orders and send them to the vendor
If a customer places an order that includes both owned inventory and marketplace items, you’ll need the ability to split that order and send the marketplace line items to the appropriate vendor, for a seamless customer experience.
6. Track status
Just because items are shipped from a third-party vendor, doesn’t mean customers won’t expect status updates from you. Make sure you define a process to provide marketplace shipment status tracking to customers, both online, and via email and/or text. Remember the customer is making the purchase from your brand.
7. Complete the financial transaction
Once the product has been shipped, the order needs to be reconciled financially. After you receive shipping confirmation from the vendor, you charge the customer. Then you withhold a predetermined percentage of the sale as a commission, and pay the remainder to the vendor.
In summary, a B2B marketplace is a new means to drive top line growth. And with more and more products and services designed to accelerate marketplace deployment, the opportunity to expand business via the marketplace has never been better. If you’d like to learn more about launching a marketplace, please Contact Us.
July 16, 2018 by Jim Bengier, Chief Customer Officer
Where will shipping materials be stored? Who will train store associates how to package fragile items so they don’t get damaged? These are just some of the change management considerations for Ship from Store.
A retailer’s greatest liability is their inventory. It represents a huge capital investment. One on which the return must be maximized. Yet competition in retail is fierce. And not just because of downward pressure on item prices. Rivalry now includes the cost of delivery, consumer expectations for fast delivery, and their unwillingness to pay for speed. Thanks Amazon. So, what can multi-channel retailers do?
In the quest to compete with Amazon’s fast delivery speed, stores are a key advantage. Ship from Store, where ecommerce orders are shipped from a local store to the customer, is one of the fastest growing trends in retail. Stores do double duty as mini Distribution Centers (DCs). And it’s not surprising. With at least 80% of their inventory in the stores, at a location so close to customers, it is a great way for retailers to deliver faster, and for less money. Think about Walmart in the United States…
Their 4,700 stores are located within a ten-mile vicinity of 90% of the U.S. population. This means delivery from a Walmart store to a customer would be a fast, and easy way to reduce shipping costs. Now, not all retailers have 4,700 stores. But if they have more stores than DCs, there are still many advantages to Ship from Store. For instance:
But the complexity of Ship from Store should not be underestimated. Implementation requires store associates to learn new processes and skills. And like any other omni-channel fulfillment initiative, preparation is key. So here are some change management questions to consider:
Ship from Store is the most complex of all store fulfillment. Stores were not designed to be distribution centers. They were designed for cash and carry. But it’s a great option to leverage all inventory within the omni-channel journey. And with ‘Ship from Store’ you can take full advantage of your entire store network to fulfill online orders. To learn more about Ship from Store change management, please Contact Us.
June 27, 2018 by Jim Bengier, Chief Customer Officer
When she gets to the store to pickup her online order, will the pickup experience inspire additional purchases?
57% of online shoppers said they had picked up an online order in a store in the last year according to results of a study published in August 2017. And in-store pickup is a great way to drive traffic into stores. In fact, 71% of customers will make an additional purchase while in the store.
But if your customers have an unsatisfactory in-store pickup experience, there’s a good chance they’ll skip the additional purchases, which will impact the return on your Buy Online Pickup In-Store (BOPIS) investment. So, in this article, the second in a series that started with Buy Online Return in Store: 15 change management questions to consider, we’ll cover some change management questions that will help you craft a high quality pickup process.
To make it easier, we’ll align the question with the 3 different approaches to Buy Online Pickup In-Store, in order of complexity:
This is the simplest model. Orders are shipped directly to store, from the DC, pre-labeled with the customer’s information. Store associates do not have to pick orders, so business disruption is minimized. Key change management questions include:
Drop shipping is a popular way for retailers to provide an expanded assortment without owning the inventory. Drop ship to store offers this same inventory expansion, but with the added benefit of driving store traffic. It works particularly well when the drop shipped item is part of a bundle of products ordered by a customer, for example:
This way, the customer visits the store once and receives all their items at the same time. But to successfully receive in-store pickup orders from multiple sources (which may have inconsistent packaging and labeling) requires some additional thought. Change management questions for this use case include:
This is where things get tricky. Why? Because, while inventory accuracy in a well run DC is usually good, stores are a different matter.
Inventory moves from the backroom to selling floor, rides in carts, is abandoned in fitting rooms, or placed on random shelves by customers. And whether your revenue is $200 million or $12 billion, the number one challenge when fulfilling orders from store inventory, is inventory accuracy. Without it, you’ll have canceled orders which result in customer disappointment, and lost sales. So when you start preparing to pick orders from store inventory, consider how best to achieve the inventory accuracy you’ll need to ensure success. Some important initiatives to consider include:
Other change management questions you’ll want to address are:
As you can see, in-store pickup has some complexity. But it’s a great stepping stone on your journey to offering ‘Ship from Store’ after Buy Online Return In-Store. And with ‘Ship from Store’ you can fully leverage all your inventory across your entire store network to fulfill online orders. This let’s you minimize markdowns and reduce inventory carrying costs. In the next article in this series, we’ll look at some Ship from Store change management questions. In the meantime, if you’d like to learn more about BOPIS change management, please Contact Us.
June 11, 2018 by Jim Bengier, Chief Customer Officer
If she can’t return her online purchase in-store, she may not buy it at all.
The retail race for digital supremacy is on. While so many have filed for bankruptcy protection, or closed stores, the trend is clear. Retailers who invested in tech early are doing well. Those who didn’t have struggled to keep their customers excited and engaged with their offerings.
And what’s number 3 on the list of ‘Top 10 Technologies for 2018’ according to the 2018 RIS/Gartner Retail Technology Study? One of our favorites: In-store pickup/return. But technology is just a tool. And while multi-channel customer experiences require a robust, well integrated technology stack, it is not enough by itself.
Yet all too often retail technology implementation plans fail to allocate enough time and resources to another essential component: Change management. But without good business processes, and employee training and engagement to support your technology, you can’t achieve maximum return on your digital investment. According to the study, “Change Management” was ranked number 6 of the ‘Top obstacles over the next 18 months’. And we have seen this first hand.
Retailers have bought software, underestimated the change management involved, then shelved the software (i.e., they paid for it, but didn’t implement it), because they failed to scope out the appropriate level of change management required to make the project a success before making their technology investment. What a waste!
We’d like to help you avoid that situation. So, in this series of articles, we offer you some questions to consider when designing your change management program.
Buy Online Return In-Store (BORIS) Change Management Questions
As you can see, there’s a lot more to ‘Buy Online Return In-Store’, than just connecting your eCommerce and Point of Sale system with an Order Management System. Next in our series, we’ll look at In-Store Pickup Change Management: 35 questions to get you started. In the meantime, if you have any questions about returns change management, feel free to contact us.
December 22, 2017 by Jim Bengier, Chief Customer Officer
hether you’re a retailer, distributor or brand, how well you deliver orders matters. So here are 8 predictions for 2018 that will impact your Delivery Customer Experience (DeliveryCX):
1. Sales via Amazon
76% of online shoppers said they would do most of their shopping on Amazon during the 2017 holiday season.¹
Expect to see: More retailers and brands listing their products on Amazon and using Amazon Fulfillment services.
2. Same Day Delivery
Expect to see: More retailers leveraging their store inventory to offer same-day delivery.
3. Real-time Delivery Status
Just like Amazon Prime has shifted expectations on delivery time, apps like Uber have shifted expectations around delivery details.
Expect to see: Uber-like maps with real-time tracking on package delivery, especially for same-day deliveries.
4. Increased RFID Adoption
The decline in RFID prices, combined with the increased need for inventory accuracy, results in more retailers rolling out RFID solutions.
Expect to see: More retailers implementing RFID to support their ship from store initiatives.
5. More Marketplace Sales
Third party marketplaces, like Amazon and Walmart, expose your products to a larger audience (and can be a great marketing tool). Self-hosted marketplaces let you expand your assortment without increasing your inventory carrying costs.
Expect to see: More brands and retailers either selling on third-party marketplaces or launching their own.
6. Loyalty based delivery perks
Nothing delights a customer more than receiving their order ahead of schedule, and who better to reward than your most loyal customers.
Expect to see: Dynamic preferential delivery perks based on loyalty.
7. Maintenance Subscriptions
Subscriptions move beyond makeup, shaving supplies, and grocery. Think ‘Home Maintenance’ (like bi-annual smoke detector battery replacement, air and water filters, driveway salt, etc.) or ‘Car Maintenance’ (like windshield wipers, antifreeze, oil, filters, etc.)
Expect to see: More subscriptions geared towards automated delivery of regular maintenance products.
8. Bitcoin Won’t be a Mainstream Payment Method
Cryptocurrencies aren’t design to support canceled orders and refunds. This, combined with their high volatility, will prevent mainstream adoption in the short term.
Expect to see: Big fluctuations in cryptocurrency values over the next 12 moths, and more time needed for them to become a mature payment method that can support canceled orders and returns.
September 26, 2017 by James Brochu, Chief Operating Officer
A dedicated Order Management platform provides flexible order orchestration
capabilities so you can adjust quickly to market changes.
hile every brand and company has its unique challenges, our experience in the sale and implementation of packaged Order Management applications has revealed a common set of problems faced by customers. These problems add time to implementations, maximize work and rework, and cause pain for customers and companies alike. While we have hundreds of best practices and recommendations for specific applications, we believe that these ten issues can empower teams to focus on what matters – delivering capabilities to your business!
1. Missing or under-supported business cases
Too often, businesses take as imperatives the initiatives that their competition and industry are taking on. This usually leads to large, poorly defined projects where success is measured only by project completion instead of business goals. Defining and maintaining business cases for your implementation drives shorter time to value, higher levels of team empowerment, and happier end users.
2. Not designing your system for growth
Modern Order Management systems are more than capable of handling complex organizations with aggressive growth and Merger & Acquisition (M&A) strategies. Done correctly, Order Management can save time, money, and headaches. Done incorrectly, each enhancement or add-on ends up requiring the same level of effort as an initial implementation. Make sure you consider future ‘brand onboarding’ and ‘business expansion’ during the initial project phases. Play the ‘what-if’ game a lot to ensure you build a system that allows for flexibility in the future.
3. Taking on too many things at once
Order Management touches almost every system in your supply chain. If you try roll out everything at once, your project will take too long and involve more risk. And given how fast the market is changing, your business objectives are likely to change several times before you go live. Instead of trying to swallow the elephant in one bite, consider smaller, more functional releases. Often companies start with the core data (inventory, items, pricing, customers) and take a phased approach to channel onboarding.
4. Not thinking in terms of ‘capabilities’ when designing your roll-out
By breaking your business down to the ‘capability’ level, you can then assess which capabilities you need to onboard a certain brand, channel, or product line. For instance, if one of your brands requires complex delivery scheduling and routing capabilities, and one does not, you might consider onboarding the simpler brand first, and adding the other capabilities and brand afterwards.
5. Training your technical team too late or not at all
Unless you plan to outsource the entire IT initiative including production support and ongoing maintenance, your team needs to take ownership of the solution early. Projects that wait until go-live to transition tend to struggle, because they don’t have enough familiarity with the product to make the best decisions. This causes increased employee distress, longer ramp-up times, and higher defect rates than a collaborative implementation and training approach.
6. Not partnering with a Product Subject Matter Expert (SME)
There is a large amount of tribal knowledge and lessons learned within the community of practiced implementers. Strong IT people are helpful, but too often a strong IT group will work AROUND a packaged application instead of WITH the application’s capabilities. They will write unnecessary custom code to achieve a business objective instead of using the products built-in configuration capabilities. This increases project cost (development, testing, time to implement), and risk.
7. Not getting buy-in from the surrounding ecosystem of applications
Order Management often act as a hub between dozens of applications – in other words, it touches almost every system. Correctly implemented, it often acts as the brain of your supply chain, but it needs the cooperation of other application teams. Brokering strong lines of communication between teams is an imperative in today’s complex supply chain environment.
8. Using Agile methodology for the first phase of the implementation
This may sound backward and controversial, but Agile methodology is usually not a great way to implement a packaged Order Management application – at least initially. Experience has shown that a Waterfall methodology allows you to create a solid base of fundamental capabilities more quickly. Things like application setup, participant modelling, inventory visibility, and catalog setup are all tightly interrelated. Using Agile methodology usually causes rework as nuances of each are uncovered. We do, however, believe that Agile is a great method to follow once this initial base has been laid.
9. Not committing to testing and performance testing sufficiently
Too often, these items are seen as optional afterthoughts. And here’s the thing – 95% of the time, the system will work well enough to get you through. But the risk is high, especially during peak season loads. We’ve seen ecommerce sites experience over a week of downtime due to insufficient testing. So, make sure testing is part of your plan from day one.
10. Not developing sufficient automation and environments for deployment
The leading cause of issues when deploying to new environments is, without a doubt, deployment error. Missing files, forgotten configuration, and a dozen other things can happen. Even a typo can cause pain, lost time, and lost business. This is a simple and repeatable thing to create, however it often gets overlooked because of time, resourcing, or budget. An investment in automation will help you ensure successful go-lives and avoid rollbacks.
July 27, 2017 by The Bridge Solutions Group Team
An Order Management system is like the cockpit of an aircraft. It provides a single view of data from multiple systems, only instead of flight systems it’s fulfillment systems.
Let’s use an airplane analogy. There are many systems on a plane: Flight controls, hydraulics, fuel, oxygen, navigation, communication systems, etc. They’re all critical to the safe delivery of passengers to their destination. But the cockpit is where the pilot can see input from all these systems, and tweak them to ensure an optimal flight experience.
An Order Management system is like the cockpit.
You have many order capture and fulfillment systems in your business: eCommerce, Point of Sale (POS), Enterprise Resource Planning (ERP), Warehouse Management System (WMS), etc. An Order Management system lets you see inventory across all locations (including inbound inventory), customer data, and order fulfillment status from all those systems in a single interface. It also lets you define and tweak fulfillment rules to provide an optimal customer experience.
Because it integrates data from multiple systems you get a single, real-time view of your customer orders and fulfillment operations which enables:
It can also provide a mobile interface for store associates so they can locate out of stock items for a customer at another location, and provide better cross-sell and up-sell recommendations.
In short, an Order Management system is an essential component of modern omni-channel fulfillment operations.
June 16, 2017 by Jim Bengier, Chief Customer Officer
Competition in the Grocery eCommerce and fulfillment market will increase as grocers scramble to provide customers with more convenient ordering, pickup and delivery options.
rocery look out! Whole Foods Market will add over 430 stores to Amazon’s already superior fulfillment network. It will also provide Amazon with access to more grocery purchase history data than ever before. And you know they’ll use it well. So, what’s in it for Whole Foods?
A reduction in supply chain and distribution costs will let them drop prices (and maybe steal back some organic food market share from Kroger). And if they leverage even a fraction of Amazon’s eCommerce knowledge and experience, they will no doubt dominate the online grocery segment. But given Amazon’s commitment to continuous innovation, it won’t stop there.
Combine this with:
The grocery industry is about to get a shakeup. So, what can you do to compete?
1. Buy Online, Pickup In-Store
Offer Buy Online, Pickup In-Store, sometimes called Click and Collect. Your customers receive all the benefits of same-day or next-day groceries without a delivery charge. Whole Foods Market may have 430 stores, but for now, many of you still have the local advantage. Use it to build loyalty while you can.
And if you really want to win them over, offer curbside pickup. Ideally a covered drive-through to protect customers and employees from the weather. Combine this with delightful customer service at pickup and your customers with young children or physical disabilities will rave about you.
2. Real-Time Substitutions
Your store associate is picking an order for pickup. An item is out of stock. Can they contact that customer immediately? Via text or phone? If so, they could offer (and get approval for) a substitute product in real-time. You save a sale, the customer is happy, and there is little extra work required by the store associate.
3. Dynamic Scheduling and Delivery Pricing Model
Grocery delivery can be expensive. But a dynamic model can help manage that cost. How? You can incentivize customers to select a non-peak delivery window by offering a lower delivery cost. This helps you manage the impact on your stores, and leverage off-hours labor for delivery orders.
4. Subscription based orders
With subscription orders, a single purchase decision equals many transactions. You only need to convince or entice the buyer once. And it doesn’t just benefit your top line, it can also provide customer insight that can be used to improve inventory forecasts.
5. Integrate your offline and online loyalty programs
Your customer data is a huge competitive advantage. Use it well. If you integrate your loyalty card data with your ecommerce platform, you can provide better online product recommendations and promotions.
In short, the time for change is now. Can you afford to be left behind? If you need help crafting your grocery fulfillment strategy, contact us today.
May 17, 2017 by Jim Bengier, Chief Customer Officer
“We’re out of stock at the moment, but I can ship it to your home.” – Enabling store associates to recover from out of stocks is one of 5 great ways to recoup your Order Management investment.
he heart of any omni-channel strategy is order management. But, implementing an omni-channel strategy designed to meet the customer’s expectations while making money can be a challenge. The customer continues to demand more for less. According to a recent PwC and JDA Software survey, only 10% of retail CEOs say they are able to make a profit while fulfilling omni-channel demand (you can read more here). Where is the Return on Investment (ROI)?
Here are 5 ways a retailer can achieve a positive ROI with Order Management:
Regardless of the retailer, out of stock inventory is always an issue. An automated capability to locate, reserve, fulfill and restock inventory, not only increases revenue for lost sales, but increases customer loyalty. As retailers add channels the placement of inventory becomes more difficult. Predicting supply and demand across different channels regardless of the planning and allocation tool is a huge challenge. These issues can be mitigated when an associate can find the merchandise, and reserve it, or have it delivered to the customer, regardless of where the transaction originated. The inventory visibility by location is one of the greatest attributes of order management. Fulfilling from an overstocked store reduces markdowns and increases revenue.
Many companies, such as Walmart, take orders online and ship the merchandise to the store for pickup. Having the customer visit the store for pickup results in an additional 25-35% increase in the purchase. This revenue increase, along with a transportation decrease (as the merchandise can be shipped on the usual DC-to-store truck), results in a strong ROI. With an order management solution, it is possible to aggregate store replenishment inventory with online orders. At the DC, the customer pickup order can be clearly marked and identified for staging versus store stock.
In many cases, the customer wants to see or try on their merchandise before completing the transaction. But, they don’t want to make the trip to the store unless the item of interest is available in store. CEOs surveyed said 51% of their companies plans to allow customers to buy online and pick up in-store in 2017, up from 47% last year. According to a Harvard Business Review survey, omni-channel shoppers who engage with retailers through online and offline channels spend 4% more, on average, every time they visit a brick-and-mortar store, and spend 10% more when shopping online. Order management provides the tool to orchestrate the demand in the store for pickup. This capability adds fulfillment flexibility while leveraging store inventory driving up return on assets.
On average retailers have an 8% return rate. Retailers selling shoes, apparel, and electronics have anywhere from 10-17% rate. In the PwC and JDA survey, 75% of respondents said their online operating costs are increasing because of costs related to omni-channel returns. And 77%% said customer returns were eroding profits. Since customers expect free returns, profits can be diminished by 10-20% per year. Order management provides the store with customer history so that the associate knows the customer. A good associate can turn a negative experience into a positive one by offering the customer a complementary item to something they may already own. They also can reduce fraud by having a complete view of the customer’s transaction.
Many retailers are looking to use their stores to compete against Amazon. Their stores have become fulfillment centers or mini distribution centers for online orders. This process is an extension to the BOPIS process as an associate not only picks the merchandise, but they also ship it to the customer. Order management is the tool that provides the capability to pick, process, confirm the order for payment. The store uses order management much like a distribution center would use a warehouse management solution. But, it goes one step further by providing complete access and visibility to the order status. The customer knows what is happening at all times. BOSFS is a transportation savings tool by having the stores closest to the customer fulfill rather than paying shipping from the distribution center.
Using order management for these 5 business models, delivers ROI by having inventory visibility, leverage inventory, fulfill profitably, increase revenue and customer loyalty, and reduce shipping costs.