Estimated reading time: 3 minutes, 10 seconds

bigboxsmallboxOne of the world's great luxuries is education: you learn valuable lessons without having to pay all the costs of experience yourself. This particularly applies now to the problem of "e-tailing": it's clear that online and mobile purchases will be an important part of successful businesses. It's also evident that companies which make mistakes can waste millions in sales and years of good will: J. C. Penney, for instance, recently lost over a billion and a half dollars in market capitalization in three days as a new marketing strategy stumbled.

Careful study of successful examples, though, has the potential to help you make a smooth transition to a high-growth e-commerce strategy. Consider the experience of FINIS, Inc.: this specialty retailer of "technical" equipment for dedicated swimmers has been in business since 1993. Since then, it has prospered on a mix of distribution channels, including local sporting goods retail shops, swim teams, and mail order. By 2008-2009, online shopping matured to the point that FINIS committed to e-tailing as a significant distribution channel. In the words of FINIS Compliance Manager Conor Peterson, "E-Commerce now represents 1/3 of our company's business ... and is projected to grow an additional 20% this year."

Good time to jump in

Did that mean FINIS "left a lot on the table" in the previous decade? Not necessarily. In the experience of David Verette, Vice President of Partner Sales with trading partner integration center provider SPS Commerce, it's just in the last few years that e-tailing has really taken off for conventional products. While e-commerce was important enough to support the late '90s Internet boom and subsequent bust, it remained a secondary factor in global retailing. Logistical practices, consumer attitudes, payment systems, and, perhaps most crucially, executive leadership, only caught up to make e-commerce more than a gimmick within the last half-decade. Now, there's an "e-tailer 'land-grab' like crazy", says Verette, as best practices diffuse sufficiently to support the entry of traditional retailers.

Chief among these: e-tailers know to emphasize the consumer experience. "Traditional retailers have advantages" even as the market moves to e-commerce and m-commerce, reports Verette, but they lose them all if they don't recognize how tenuous loyalty has become, and how fundamental the consumer experience is.

Peterson experienced aspects of that in helping guide his specialty retailer online. As a consumer himself, his association with online shopping was, "point, click, done." To bring that simplicity to FINIS's customers was a big job, though: "I was surprised by how many different methods there are for effectively executing the fulfillment of an order from any given online store. Some e-tailers still warehouse product in their own facilities and process shipments of web orders themselves. Others will utilize the vendor direct program where orders placed on their website will be sent directly to the manufacturer of the ordered item who will then fulfill the order from their facility on behalf of the e-tailer. Then there are those who utilize a combination of both methods. ... [E]very online merchant has different methods of execution."

Integration and automation of these methods is precisely the sort of responsibility that a traditional retailer can overlook in planning an online method. Executive enthusiasm and market readiness are important; at the same time, an organization moving online needs directors with a passion for getting the details of SSCC carton labeling, routing request submissions, and EDI document processing right. The good news: there's now a rich "ecosystem" of service providers with well-developed offerings in such niches as 3PL, cloud-based ERP, distribution center management, and other pertinent specialties.

A final key to a move online: watch your shopping carts. Digital consumers expect simplicity, and anything that interferes with that experience immediately impacts sales. Ruthlessly refine your online checkout system to ensure you convert visitors to customers.

Last modified on Monday, 10 September 2012
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