If you ask most Internet retailers what the “e” in e-commerce means, they will say “electronic.” It doesn’t. It has come to mean “everything” – as in let’s put everything in one basket.
With all of the purported success of Internet commerce this year, everyone wants to become an “e-businessman.”
I am not referring to the guy who builds widgets in his garage during his spare time. These are major retailers with lots of money to spend. So what do they do? They develop a Web site, find one large warehouse, fill it with product, hope they have the correct product mix and guess at inventory levels.
Sometimes these retailers guess correctly, but many times they don’t. The order volumes being generated from Web sites are so erratic and unpredictable that it’s nearly impossible to satisfy the demand by using the everything-in-one-basket theory of order fulfillment. What is needed is “we-commerce.”
We-commerce is Web retailers taking advantage of the specialization and expertise of many different vendors to satisfy high-volume order demand and customer satisfaction. The current thinking is that customer satisfaction is not a major concern on the Web. It is a world where the number of hits, or the total number of orders, is the only important factor. Large sums of money can be raised through IPOs by telling the world that their company sold so many million dollars via their Web site. It doesn’t matter whether they made a profit, nor does it matter whether their customers were satisfied or not. All that matters is that they took in this many (read large volumes) orders. Whether they have the ability to process them in a timely manner is an afterthought.
This is a strategy for failure, and last year’s holiday season proved it. A major toy e-tailer had to send e-mails to its customers indicating its inability to process orders in time for Christmas delivery. Not only did this result in lost revenue for the company because of canceled orders and the cost of the free gift certificates that were given away as recompense for customer aggravation, but more importantly, a large number of customers will never re-order from that e-tailer again.
We-commerce takes a commitment to excellence and some up-front systems development. There are good third-party fulfillment centers that have made the investment in systems, so all that is needed is a commitment to excellence by long-term thinking we-tailers. By taking advantage of these systems, not only can cost savings be realized by sharing this technology, but good, high quality customer service will result.
By focusing on specific product areas within your business, peak volumes are more manageable, allowing for better staffing and thus, better turnaround. Customer satisfaction is important in any business, but it is even more so on the Internet. Consumers who shop electronically tend to be educated, financially secure and are accustomed to getting what they want. As the old saying goes: “They want what they want when they want it.”
The good news is that consumers are willing to pay for good service. The bad news is that they are a very vocal group if they are dissatisfied. They will go into chat rooms and tell anybody who will listen how “Wedon’tcareaboutU.com” gave them shoddy service. More importantly, they will never order from you again.
The patient we-tailers realize the pitfalls that poor service has on long-term customer loyalty. They have a different plan of action, one that results in customer satisfaction and repeat transactions. These companies find dynamic, forward-thinking vendors to handle their fulfillment needs. These vendors have strategic partnerships with each other and their services complement one another, forming a well-rounded, cost efficient and customer friendly network.
This is how we-commerce works: A company develops a Web site and lists goods for sale. As the consumer shops and places products in his shopping cart, he actually has entered a different site (unbeknownst to him). This is the site of a shopping-cart software solutions provider.
This front-end provider processes the credit information, develops a ship file, transmits the file to a third-party fulfillment center, receives a ship confirmation file back from the fulfillment house and e-mails the consumer with ship status, tracking numbers and other relevant customer service information.
Subsequently, the fulfillment center receives the ship file from the shopping cart solution provider, reformats the orders and sorts them by product line (or some other meaningful criterion). The customer information resides in their data center for future customer service issues. The fulfillment center transmits certain product lines to drop shippers or other fulfillment houses for processing while fulfilling the balance of the orders in its warehouse. This team effort ensures that peak volumes are processed correctly and on time.
Upon shipment, a file is transmitted back to the fulfillment center indicating ship status, tracking numbers and other relevant data. Customer service functions can be performed by their call center, thus ensuring customer satisfaction. Return processing can be centralized at the fulfillment center to maximize efficiencies and enhance the timeline involving replacement orders. We-commerce translates into a successful shopping experience for everyone.
This type of transaction is occurring today. There are Web e-tailers who have had the foresight to engage in these multidimensional relationships, resulting in satisfied customers.
The first step is to recognize the need for we-commerce, then investigate third-party vendors thoroughly to ensure that the chosen ones can provide the necessary services needed to be successful.
