The Evolution of eCommerce
By Scott Moon
Vice President, MonarchFx
The supply chain industry is going through its net threshold of evolution where appetite and market demands are driving the selection of approaches that will set the tone for tomorrow’s expectations.
If you are struggling to get your head around how to compete in tomorrow’s marketplace, it may be time to step back and review the market offerings. Today’s eCommerce evolution is requiring all entrepreneurs to rethink their go to market strategy.
Customer Demands Heighten
Malls were grounded on the instant gratification of seeing a range of products available to purchase and providing the purchased goods immediately upon payment. This satisfied the niche to find that unique item that would make you stand apart from your peers. The market used this approach for nearly two decades as the primary means for procuring goods.
When the internet began to surge, consumers were not only able to search for unique goods, but they could do so in a competitive condition where they could get the best possible price. The power and control of the marketplace moved from the large retail companies to the consumer.
As this marketplace transitioned, the expectation and demand to get the products immediately did not change. Early eCommerce experiences accepted this delay because of product uniqueness or price. As this became a more mainstream channel, however, the immediacy of the product acquisition continued to heighten.
Historic supply chain networks were grounded on carton flow where items shipped to a network of distribution centers that would fund a physical retail operation to sell each item. This network built in efficiencies of each stage of the operation based on the unit of increment being handled (i.e. case or each). It used inventory to fill the built-in flow hand-offs to ensure the store had the product it needed to meet consumer needs.
Teams attempted to respond to the evolving eCommerce business by offering a unichannel solution that used any available inventory supply to send the requested item to consumers. This approach blew away the efficiencies associated with repeated activity and expertise but solved the need to get the product to the customer as quickly as possible. While costs ballooned, retailers failed to evolve their supply chain to reposition their assets to gain the efficiencies needed to maintain their position.
During the time, online retailers were developing very efficient and focused solutions that harvested the production efficiencies associated with a new supply chain approach. They deployed distributed logistics, which focused on eaches and delivery solutions for same-day and/or next-day delivery at the lowest cost.
MonarchFx provides access to a network of fulfillment operations that allows you to access the network and deliver on your customers’ increasing service level demands at a competitive cost. No longer do you need to be locked into a facility for the long term. MonarchFx gives you a multitude of sites you can use to move as your demand moves.
Your Next Step
The distributed network evolves from the need to invest in a fixed infrastructure to the use of a flexible infrastructure that allows you to move and evolve as demand moves and evolves.
Delivery can be as high as 85 percent of the total cost of fulfillment. Let the MonarchFx team evaluate your demand and help you understand the value of unlocking its solution to deliver on your customer demands.