Monday, May 25, 2015

RETAILERS & SEGMENTATION--STORES VS E-COMMERCE CUSTOMERS, SUPPLY CHAINS

Retailers have a long history of selling products to people who come into their stores to purchase. These customers can be completely unknown, especially for big box retailers. If the customers pay cash or use a gift card, the mass merchandisers have no name to associate with the buys.

E-commerce changes that dynamic. Online sales bring names and addresses for customers. Patterns of buying can be developed.

Even more, selling in stores versus online requires a new supply chain.  Setting aside space in a warehouse to ship these orders is not enough.

E-commerce is a disruptor to the old ways of selling and servicing.  It is a new paradigm for selling and for supply chain management.


Retailers must recognize the new selling and supply chain paradigm on E-Commerce Immediacy.  This means it is about the customer--not the retailer--and is about the customer experience.

New thinking is needed. How does making a customer come into a store to pick up his order make a customer experience?

Supply chains should be segmented for maximum performance to each segment's supply chain needs. One-size-fits-all supply chains will fade away with the new reality.
Consideration should be given to segmenting different retail sales segments. This recognizes--
  • Specialty retailing
  • Mass merchandiser
  • Name brand
  • Private label
How do you design a supply chain where e-commerce orders should be delivered within 48 hours of order placement?

There is the new supply chain that drives e-commerce immediacy and creates a blue ocean strategy using the new supply chain management.

Out with the old.  In with the new.