INTRODUCTION

The eCommerce landscape is changing. The world of retail is changing and it’s impacting the online environment greatly. The retail is evolving to something more dynamic, more responsive. Big retail chains are changing their business internals flows to meet the customer needs.

They merge.

Artificial Intelligence, Virtual Reality and Machine Learning as tools and means to enrich the customer experience, had entered the already heavyweight e-commerce game. Just think a little bit, take a step back and think.

Now you can panic!

Many domain experts – which I’m not – have described the pillars of online commerce to better understand the online market dynamics. The pillars have been already defined and most of the established e-commerce businesses function based on their implementation. We are going review some of them to see if indeed: everything is redux! All the successful online e-commerce companies are build based on standard pillars.  But the base on which the pillars sit is important also.

So we are going to have a chat about it.

The Pillars Of eCommerce

Most of  eCommerce companies are functionally based on three business operations :

1. Warehouse
2. Finance
3. Delivery

Warehouse

All pillars are present in a form or the other in any mature e-commerce solution. When we are talking about the Warehouse we mean stock, where the stock resides, how it’s picked and packed, how is shipped to the customer. Product stock is a fundamental pillar of any commerce initiative, that’s clear. You have it or not, without stock, you cannot sell and if you cannot sell, there are no customers. Still, you’ll need to go further down to the root. If there are products but no reliable suppliers, is no hope for a versatile e-commerce business.

Warehouse operations are important and it looks like now a shift of consumer focus, is happening in the online market.  Over the year, are periods of time when product availability is impacted by large and quick demand and therefore warehouse footprint is increased especially in regional hubs.

We need to mention also, the returns of the products which happens due to different customer behavior and expectation between online shopping and retail store. Customers will expect high standards, quick fulfillment and easy returns which of course will continue to pressure the warehouse to improve delivery and lower the delivery costs.

Important to note that nowadays the unpredictable buying patterns are impacting the entire warehouse set of operations and costs. For that reason, many warehouses are turning to the technology to help increase efficiency, accuracy and overall productivity.

Replenishment

Very often considered the replenishment process is in today’s conditions more complex than thought. Based on various factors – for e.g.: season sales – like Christmas, Easter, Black Friday – the replenishment is now in the hand of technology where the data previously hardness from sales is crunch and transformed into estimates in the runtime. Runtime big data processing is a norm nowadays and everyone is starting to use it especially for the estimate of replenishment and quick turnover decisions.

Stock Locations

A warehouse without a quick, precise and efficient pickup and packing times is doomed to fail the operations. The warehouse has to be arranged with the operator productivity in mind. Which means everything location for the product to be picked are clearly defined and the algorithm behind is built for faster operations: locate, pick and pack. Different type of picking algorithms should be applied till the effective formula is found. This means there a consideration for the ergonomics of the warehouse which will have an impact on the space reduction and maximization of the storage space.

Finance

Finance relates to accounting and payments. Big term. Strong meaning. Starts with the budget allocated for the stock fulfillment, customer payments, reconciliations, any many other means related to company cash flow, auxiliary investment and overall budget. Business finance is a great topic, huge I could say. I will not cover it others, domain experts, have done a better job describing it than I will ever do. Or … we never know.  

Delivery

Delivery is a mixture of customer promise and company ability to fulfill the promise. Yes, every company has a promise to the customer. How customer interacts with the front end sales of the company – which in this case can be a website or a call center – and why not a front end cashier is important in all aspects. Of course, the promise is not referring only to front-end interaction but also to the after sale operations like returns, refunds and other means where the customer is involved and his desire to fulfill its needs are met again.

We can define at this point two types of deliveries for the customer:

• Fulfillment of the customer need.
• Shipment delivery.

Let’s tackle those terms now.

Fulfillment of the customer satisfaction

An interesting term which defines the customer experience overall, so we can see this as a company service delivery to the customer. There are clear milestones which can measure the customer satisfaction. For e.g.: e-commerce company will offer a quick and great online experience alongside with intuitive product description and continue with product promotions which should not only create volume sales for the company but anticipating customer needs for e.g.: a new phone could always need a protection as cover or insurance breakdown. Going forward the customer will need to pay and when it comes to payments a few things should be guaranteed:

• Easy checkout
• Data protection
• Payment and purchase proofs like receipts, confirmation emails and other communication-related artifacts of the customer interaction.

In one phrase: PCI compliance grants customer confidence. This means the website should run under HTTPS URL as a guarantee offered to the customer where his data is transferred safely and there is no breach between third-party transfers. I’m not going to extend the discussion over how storing customer data mechanisms should be engineered since I believe is part of a larger discussion and fundamentally has many topics to cover. Still is important to understand how the data is stored and that should be done securely and with care.

Easy checkout impacts the checkout flows which our customers have to follow for a successful result: entering details with ease, intuitive delivery service presentation, secure and easy way to pay as presented previously.

Another aspect of customer delivery is to have :

• Personalisation
• Search and recommendation a.k.a. Promotions

Delivering these aspects during the visit we will ensure our customer will receive the promise we made. Personalisation is backed by a strong analysis of customer behavior and therefore Data Mining and Data Warehouse combined will generate the personalization which we’ll bring back the customer and opens for the company wider view on shoppers behaviors. New means of processing data, from import to crunching are here ready to be used. Machine Learning frameworks will import and crunch the data ready to be analyzed by Artificial Intelligence engines where a new dimension is created for the business to accommodate new insights for a customer to be consumed. As for Virtual Reality is the cherry on the top and is used as the avant-garde tool for the customer to engage with the product.

Nevertheless …

Package – Parcel delivery

We promise to the customer delivery of the item(s) and everything starts when the customer it’s picking them: How, When, Whom.

Questions which we address to the customer by providing the optional selection from a matrix of delivery services. If we look to Amazon clearly will never know ‘Whom’ is going to deliver the service since they will use an elaborate delivery partner service and you can receive the parcel next day with Amazon delivery service. Still, other couriers will be engaged in the service based on the parcel weight, distance from the warehouse to the destination and other strategic factors. Other business will not afford their own delivery scheme and mechanisms therefore known couriers like Royal Mail, DPD, Parcel Force or UPS have already exposed services which will be used and will offer a full delivery service satisfying the business needs but most importantly the customer. If you do not want to go with single courier than you can use aggregate courier services  Metapack. Well, that is a business decision so …

I believe is important for the customer to have a say in the delivery. At this stage, the company should make available for the customer options where from he can pick a satisfactory method to deliver his goods. This means the customer can pick a date time option which is to his advantage. Also, the company should have in place the entire delivery mechanism and its ramifications – delivery times, label printing, printing return label, cut-off times for next day delivery, warehouse picking and packing process, packaging, etc – where it satisfy the company cost effective reasons. Which means – in some cases – there is no any rentability to deliver products where the company does not create or increase its own shared market – by adding customers –  or making any margins.

The base of the eCommerce

The pillars are placed on the top of core business strategies. Those strategies are related to the mechanisms which the company uses in relation to its suppliers and customers. Between those two identities – business contexts – there is a fundamental link which sticks them together: company vision.

The company vision is paramount and defines roadmaps for company innovation. The innovation is clearly a result of the vision and defined deliverables. Without innovation, any company dies slowly.

You cannot have pillars sitting on sand or … no base. As in building construction, we need a foundation on which the pillars will sit. If the foundation is strong and properly engineered than the pillars will stand the time. What is the foundation of an e-commerce business?

Everything from business process, customer services – engagements, feedback, social – leadership, courage, team, knowledge, motivation. E-commerce business owners I met they think is a black magic thing, something like Google Analytics.

Hmm… Really!? Is Google Analytics black magic?

Probably not. So the base of e-commerce pillars is the business foundation. Are core believes and functionality.

Can it be defined?

I think so. Without a definition of the core business activities, there is no business. What are your business activities?

The Call Center – The communicator

The call center is one important part of the delivery customer satisfaction and keeps the company promise. We need a real voice over the phone or a till. In most of the cases, call center assistants will understand the business overall purpose, strategies and products. Which means the call center assistant will always delivery maximum outcome sale lead when he or she is an enthusiast user of the products or part of the services that company offers. The best call center teams are those whose members are involved as professionals or customers in the usage of the products or services which they sell. Just this simple fact will add a personal touch to every conversation which takes part between customer and call center assistant over the phone or over the till and there from the experience, no detail is left aside. The customer will be introduced to a new view of the product or the service: honest, careful and considerate.

Just answer the following question:

How many times have you got a useless answer from the other side of the till or the phone?

That is why the call center assistants should be let to use the product or to be involved in the service: trained and involved in the product they sell.

They need to care. They will care. They care. The customer will be happy.

CONCLUSION

Once the pillars of an e-commerce business are understood then you can start planning your move across the realm of online commerce. You can start with your own garage – as many others did – or if you have already a warehouse, then shop for technology to improve processes.

When it comes to technology we need to understand terms like omnichannel, availability zones and platform scalability. Furthermore, you will need to explore the asynchronous and synchronous mechanism for analyzing data which as I mentioned previously will increase prediction of customer behavior across your product range.

This is just the first part in a series of articles ready to see the light of the day. For the time beeing, I have presented a few things I have understood after 10 years working in the e-commerce industry. I have integrated online shops with Magento, WordPress and other e-commerce platforms which are in Gartner Magic Quadrant and still, there are many things to learn. In the next article, I will talk about integrations.

Till than,

Thank you.