Blog: What Does it Mean to Improve Your E-Commerce Supply Chain Strategy?

November 16, 2020 Ivy Davis

If 2020 has proven anything, it’s that the future of e-commerce and omnichannel have been accelerated. Companies that have not yet fully established an e-commerce supply chain strategy must fast-track their omnichannel strategy or risk losing business to competitors and falling short of consumer expectations. 

Even companies with established e-commerce supply chain models are looking to optimize their strategies. 

Here are three significant trends organizations should look to when optimizing their e-commerce supply chain processes. 

1. Embrace (But Don’t Rely On) Dropshipping 

The dropship model can be an integral process of an e-commerce supply chain strategy. Dropshipping reduces the costs of keeping an extensive inventory on-hand, saves on warehouse space, and can even expedite shipping times to end consumers. However, as useful as dropshipping is, it’s far from the end-all-be-all for e-commerce. 

Experienced e-commerce brands know firsthand how unpredictable the market can be, so having a dropship supplier as a backup can help save money without losing sales. 

Dropshipping can lead to tremendous improvements in both your e-commerce supply chain and revenue. In a 2019 Lehigh Supply Chain study conducted by DiCentral, 53% of manufacturers reported an increase in profits due to their renewed focus on e-commerce and dropship practices.

Finding the right dropship vendors is crucial, as attaching your brand to a vendor you can’t rely on could prove disastrous for your business and harm your brand image. Before making e-commerce dropshipping a part of your strategy, take some time to compare the features each vendor brings to the table, measure their values (and data!) with the needs of your business, and use a detailed dropship vendor checklist to guarantee that you only consider partners who will be a good, lasting fit.

2. Forecasting - and Accommodating - Consumer Expectations

A 2019 report by DHL Supply Chain found that “meeting customer expectations is commonly viewed as a cornerstone of a successful ecommerce strategy...with 57% of B2C respondents and 53% of B2B respondents viewing it as ‘extremely important.’” However, the brands with the best chance of enduring and evolving over the long term are the brands that anticipate and exceed their customers’ expectations.

To provide a clearer understanding of what consumers  tend to prioritize, let’s review the following data from a 2019 RetailWire survey:

  • 64.3% of shoppers cite the cost of shipping as the most important factor they consider
  • 28.6% of shoppers are more likely to place an order if it arrives within a week
  • 79.3% of shoppers cite free two-day shipping as the standard they look for when shopping online
  • 72.7% of shoppers won’t do business with a site after a poor delivery experience 

It is critical to integrate consumer expectations into any e-commerce supply chain strategy.  Organizations should spend time evaluating how consumers navigate through an e-commerce website.  Track spending and make sure to follow-up after each purchase to gauge satisfaction levels. Perhaps most importantly, look at the industry trends and study how the competition is adapting to them.

Providing fast delivery is a must, but accommodating consumer needs can and should go further. Here are a few of the ways that John Kinsella, a Partner at Red Banks Consulting, outlined in a webinar with DiCentral to achieve that:

  • Offer automated shopping guides and recommendations to direct a customer towards a solution, especially when they’re not sure what they need.
  • Provide real-time inventory updates for the visibility that customers crave, and remove any risk of not being able to immediately provide a product your customer wants to purchase. 
  • Create an intuitive checkout experience that minimizes roadblocks and friction for the customer in the cart and checkout process.  
  • Prioritize delivery tracking so customers always know exactly what stage of delivery their purchase is in, providing them with the confidence that they will receive their product in a timely fashion.

3. Double Down on Inventory Management

Inventory management is a mainstay of any supply chain strategy, and there’s always room for improvement. Whether you’re new(er) to the world of e-commerce or have been an active participant for years, organizations must continuously seek out better ways to predict, manage, and accommodate your company’s inventory needs.

The three pillars of a healthy, enduring inventory management strategy are:

  1. Integrations, Data, and Insights
  2. Business Processes
  3. Inventory Control with Technology

It’s not enough to have repeatable, documented processes. Getting ahead of the curve means measuring and managing those processes too. After all, even the best system won’t be of much use if it relies on a less-than-perfect process.

Improving the e-commerce supply chain means taking an honest, thorough look at internal processes and addressing any shortcomings with people and technology that can help close gaps. E-commerce supply chain management relies on technology more than ever, especially since less than half of warehousing and logistics providers still rely on outdated, legacy software.

Organizations must double down on a warehouse management system to streamline the tracking and management of inventory, integrate processes with warehouse automation technologies, such as mobile barcoding tools, to reduce operational costs and simplify and streamline warehouse operations.

Of the many benefits to be found from e-commerce fulfillment is the opportunity for customization. “Online business owners need to focus on translating their online brand into an in-person experience beyond the product itself,” says Big Commerce. They also advise on aiming to enhance your brand “during the unboxing experience—which is often your customers’ first in-person experience with your brand.”

The e-commerce supply chain has had to step up its game in a big way in 2020, and that trend is not going to slow down at any point in the future. And with Statista predicting that “over 2.14 billion people worldwide are expected to buy goods and services online” in 2021, the time to double down on the consumer experience is now.

To learn more about e-commerce supply chain strategy, join DiCentral's upcoming free webinar, E-commerce Fulfillment and join Thom Campbell of Capacity, LLC as he shares best practices for expanding revenue and shortening delivery times. Register now! 


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