E-commerce wave hits vendors as retailer expectations rise, and Amazon hits our shores

by | Sep 18, 2017

When e-commerce took off, it started cutting into retailers’ in-store businesses, causing a bit of panic. To add fuel to the fire, marketplaces like Amazon, eBay and Etsy have been spawning and growing over the years. Not to mention hundreds and thousands of small online retailers focusing on particular lines of products or a specialty niche.

It didn’t take long before retailers realised they needed to jump on the e-commerce bandwagon. That has radically altered the retail landscape, as consumers use their laptops and mobile phones more and more often to buy from those retailers. This has led to the development of omnichannel strategy, where consumers expect their brick-and-mortar experience to match their online experience across their website, social media and more, which has forced retailers to make sure the online world and physical presence fit seamlessly together. In turn, retailer expectations of vendors has been raised as well – which is an opportunity for vendors to maximise collaboration with accurate and data-driven product recommendations.

Retailer expectations of suppliers

Now suppliers and vendors have been asked to up their own game to satisfy retailers’ and consumers’ expectations revolving around omnichannel experience. That means providing transparency into their inventory, streamlined communications through EDI, visibility for shipments, speed in all processes and working as a collaborative team player to make end-customers happy. It has also led to a small start in drop shipping from a suppliers’ distribution centre directly to consumers or a retail store.

Regardless of channel and method, vendors and suppliers have more shipping and delivery options and expectations than ever before. E-commerce has also led to more features and technologies being provided to, and expected of, both suppliers and retailers.

For example, just a few short years ago, it was really only the big retailers who were asking for drop shipping from their suppliers. They didn’t want to ship cases into a warehouse only to ship out individual orders; they wanted their suppliers to manage that for them, and save those additional transportation costs. So they found a couple suppliers willing to take on drop shipping for them as part of their new e-commerce sales channel. That worked so well, now many retailers are asking each supplier to manage drop shipping inventory for them, and that number is only growing.

More services, more collaboration

It’s not just drop shipping, though. More and more retailers are relying on their vendors and suppliers to provide accurate and detailed item data on products. After all, the distributor has insights into their category that a retailer doesn’t have – but it also works in reverse, too, as retailers have data that the vendors might not have. The collaborative exchange of information between retailers and vendors can help both to sell more, make more customers happy and gain more success.

Such retailer and vendor partnerships and collaboration requires a considerable amount of trust. When vendors ship orders directly to customers, how well they perform is a direct reflection on the retailer who made the sale. Timeliness, accuracy and visibility are all incredibly important for making sure that the purchase is a good experience.

Proof is in the data

When vendors fulfil on retailer expectations and consumer expectations and have the numbers to back it up, they can win more business from buyer trading partners. When you have data that show you’re fulfilling your promises with a scorecard of 99.8% on-time delivery, or 99.3% accuracy rate, retailers will want to work with you.

You can also make recommendations to retailers of what products they might consider carrying in their stores, based on the sales volume of certain products in specific regions, they may want to carry those products on their store shelves.

Now is the time to perfect your drop shipping services and build out your analytic tools to track to data so when the next negotiation rolls around, you’ll be armed with the data you need to help retailers reach their new goals. You may want to use your own internal analytics too, rather than relying on your retailers’ numbers, especially if you sell products to more than one retailer.

You may even want to roll in the postal codes you’re delivering to, in order to compare the vendor drop ship orders to their in-store sales to see which performs better. Many vendors don’t want to do drop shipping if the retail stores start doing their own fulfilment. They would rather manage bulk shipping, and leave the fulfilment to the retailers.

Of course, you won’t actually know how the numbers look until the Christmas shopping season is over, but you need to be prepared to start collecting them. SPS Commerce can show you how with our point of sale analytics tools. We can help you narrow in on specific regions, retailers, product groups, or even cities and post codes, or help you compare retailers’ total sales. And we can even help you alert retailers to performance issues at the store level.

To learn more about how vendors can meet retailer expectations, please look around our website further and request additional information or ask to speak with one of our staff to guide you through our system.

Connect with Amazon Australia for Fulfilment

Connect with Amazon Australia for Fulfilment

Connect to Amazon Australia for automated trade through your business system, or through a portal. And check out the other Australian retailers on our network!

Scott Bolduc

Scott Bolduc

Director of Supply Chain Strategy at SPS Commerce
Scott Bolduc is a multi-time winner of the Supply & Demand Chain Executive Pros to Know. He has worked with e-commerce retailers on their growth strategies and helped retailers transform their freight spending strategies to maximize efficiencies.
Scott Bolduc

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