Inside Logistics

Two e-commerce challenges

Nothing is more exciting than taking your business into the realm of e-commerce and nothing more disappointing than finding e-commerce success isn’t quite as easy as you hoped


March 6, 2015
by Aaron Lalvani

Aaron Lalvani

Aaron Lalvani

There is nothing more exciting than taking your business into the realm of e-commerce and nothing more disappointing than finding e-commerce success isn’t quite as easy as you hoped it would be.

There are the physical challenges. Everyone pays lots of attention to the dream of selling online, but once you start selling, implementation can expose problems with logistics from a variety of different angles.

But what is often forgotten in the rush to get on the Web is a brand must maintain that insubstantial, all-important customer experience.

E-commerce works when you plan for both challenges
The physical challenges e-commerce creates are enormous. Poor inventory management, selecting the right third-party logistics partner(s), and even something as simple as aligning current inventory and replenishment models with a new e-commerce platform can be a costly revamp for large enterprise retailers. Add in poor workflow or business methods and the e-commerce challenge is going to expose that you weren’t ready for this big step, and your infrastructure in general may need a little tuning.

All of the above is going to equal higher labour costs, plus increased IT resources.

The physical challenge is to solve these problems, as each represents a major cost point. You need to have control of your data (cloud-based solutions offer flexibility and speed of deployment); workflow changes and method changes may need to be implemented.

One thing is for sure: if e-commerce is to work, the key is to do it a little bit faster and a heck of a lot cheaper than it is being done today.

Don’t let the Web wash you away  
The Web is enormous and you have very little time to catch your visitor’s attention; 10 to 20 seconds is one estimate (see below). The unexpected fact is if you can hold a visitor for half a minute they will spend time on your page (it’s still only a couple of minutes).

Here’s the ugly truth about how long people stay on a web page, and a conclusion that may surprise you: http://www.nngroup.com/articles/how-long-do-users-stay-on-web-pages/

Why do they stay? Because you provide an experience that holds their interest.

Why do visitors leave? One safe bet is you didn’t match expectations. Your store is a mess, shelves not stocked, staff are negative and no one comes to help you when you need it. Now put that on the Web and watch it magnify.

As bad as all of the physical problems sound, nothing matches the reality of a frustrated customer feeling their online experience doesn’t match their physical experience with your brand.

Don’t compete with Amazon
Your brand does not have to aim at knocking off Amazon or the other major names on the Web in order to be a success story. The reality is no one can compete with Amazon’s profit model or cost structure because Amazon doesn’t make a profit!

Loren Padelford, head sales scientist for Shopify, recently said, “What retailers need to understand is that e-commerce is not about being like Amazon. It is about understanding how and why your customers buy products online and giving them an experience that creates value. Chasing Amazon is a recipe for failure.”

There’s a lot more to e-commerce than processing credit card payments and uploading a storefront of SKUs, although both represent very important functionality. (That’s another article.)  Companies that succeed manage both logistics and the customer experience. It’s not all physical.

Aaron Lalvani, of Lalvani Group, helps trucking and manufacturing companies perform better. It’s not all about the top line; it’s about delivering exceptional customer service by eliminating non-productive activities. aaron@lalvanigroup.com