Why is eCommerce integration important?

A decade or two ago, eCommerce might have seemed to be reserved for large corporations with annual revenues in the hundred millions. For the past several years, however, the barriers to entry for online commerce are so low and the potential returns so high that establishing an online store should be an integral part of virtually every business plan. Opting for pure conventional commerce is no longer viable.

So you’ve either already set up an online storefront or are actively pursuing a digital commerce solutions. That’s great, but is it enough?

The woes of digital solitude

You might discover that their eCommerce platform is a rather solitary creature that doesn’t play well with the rest of your organization’s digital ecosystem. It might have its own set of reports and dashboards, separate from reports on your financials and internal operations… or it might not have these reports at all. The former scenario is far from ideal, while the latter is simply unacceptable.

In addition to reconciling reports from multiple sources, your staff will probably spend several hours each week manually rekeying customer and product information between your eCommerce platform and other information systems like your ERP platform, warehouse management software, or shipping solution. Those lost hours would be better spent closing sales or serving customers.

Disconnected eCommerce and warehouse management systems slow down your pay-to-order cycle. The longer it takes to process an order and ship the right product, the higher your cost will be per order. Factor in the errors resulting from manual entry and the potential costs are even higher. If your order processing workflow involves email or spreadsheets, then there is ample room for improvement.

Using a standalone eCommerce system also makes it trickier to inform online shoppers about product availability. If your inventory management solution isn’t integrated with your online store, how will shoppers know whether the items they want are in stock?

The cross-channel conundrum

For most retailers, however, eCommerce is just one slice of their sales pie. Your business probably has old-fashioned brick-and-mortar stores, a wholesale business, or even telephone shopping where customers choose products out of a printed catalog.

Bringing together current and accurate information from each of these channels is extremely useful. You can enable cross-channel fulfillment, allowing customers to pay using one channel, receive items using a second, and return items using a third. You can maintain a shared inventory so that your customers have access to your complete product catalog no matter how they choose to shop. You can also provide consistently excellent customer service by sharing customers’ complete support and order history across call centers, retail locations, and fulfillment centers.

Without digital integration across eCommerce, supply chain, and finance, efficient cross-channel fulfillment, inventory, and support is virtually impossible. Many businesses maintain separate product catalogs, customer records, and delivery information for their various retail channels. They spend a lot of time asking their customers to repeat their personal details and reason for calling. They miss sale opportunities because some products aren’t available via a particular channel. They require customers to return to their point of purchase for exchanges and refunds. In short, they fail to offer their customers excellent customer service.

Integration using a pre-built integration solution

Integrating eCommerce with the rest of your business systems is a great investment, but there’s more than one way to achieve unified commerce. Some retailers embark on custom enterprise integration projects, which tend to be expensive and time-consuming. However, it’s possible to achieve the same results more affordably and in less time using ready-made integration solutions designed specifically for eCommerce platforms.

While pre-built integration solutions usually offer better ROI than custom integration, there are a few important factors to keep in mind.

Get an integration solution that supports bidirectional integration. If you want to synchronize business information between Magento and Microsoft Dynamics 365, for example, the integration solution needs to send order information from Magento to Dynamics 365 and inventory information from Dynamics 365 to Magento to be truly effective.

Make sure that the integration solution deploys quickly. It should be compatible with your eCommerce platform and ERP system to enable rapid integration out of the box. Since more and more digital business solutions like eCommerce and ERP platforms are moving to the cloud, the solution should support cloud-based solutions.

You should choose an integration solution by a provider that offers complete implementation and support services. Ideally, their operational model should include both onshore and offshore components to give you an optimal mix of responsiveness and cost-effectiveness.

Conclusion

eCommerce has become an essential part of every successful business, but setting up an online store is only half the battle. It is just as important to establish automatic communication between your eCommerce system and other digital business solutions like your ERP system and warehouse management solution. For more information on how a pre-built eCommerce integration solution can improve operational efficiency with optimal time to value, please join us for our webinar on February 27, “Making Omni-Channel Real in B2B and B2C Commerce, Unifying Magento with Dynamics 365”.

Swimming with the Digital Commerce Sharks

Amazon is a leader in eCommerce and offers unmatched value to its customers with its 2-day and next-day delivery promise. Amazon even extends its 2-day shipping service to other sellers using “Amazon Shipping”. Amazon can provide the 2-day delivery promise using its extended network of distribution and fulfillment centers across the country. For any other B2C or B2B company to match this level of guarantee would mean a huge investment for which they can’t leverage the economies of scale that Amazon can.

While there is no guessing how far Amazon’s monopoly in eCommerce and fulfillment will grow, there is something other businesses can do. But in this scenario of “everyone else versus Amazon”, sellers, distributors, and shipping carriers will have to join forces, so to speak, to thwart or at least match Amazon on its promise.

The first step in this process is for organizations to understand how they can expand their existing network, either utilizing their own facilities or through partnerships.

1. Brick and mortar retailers who have extended their retail store networks have to look inwards, leverage their real estate holdings, and adopt a model where the retail stores are used as distribution centers to fulfill online orders.


2. Businesses can utilize 3PL/4PL services to extend their network to areas with no current physical presence. There are many options available in this space and more startups are coming up with tailored value-add for 2-day shipping.


3. Big-box stores have an existing network of distribution centers and stores that can be of huge value to many smaller eCommerce businesses. Big-box stores can become part of the solution by opening their distribution networks and letting sellers leverage these extensive networks as well to provide faster deliveries, returns, and customer support.

For this model to succeed, adjustments have to be made to supply chain operations, merchandizing, forecasting, and replenishment processes. These changes have to be driven by technology in a bid to flexibly automate as much of their operations as possible.

• Internal stores should be empowered to run pick, pack, and ship operations. A decent WMS solution capable of automatically manifesting to common shipping carriers and rate shopping for specific delivery is a must-have.
• Robust integration is required to succeed in partnerships with 3PL/4PL and 2-day fulfillment startups.
• Establish a process to automatically route online orders to the nearest fulfillment center (own or partner). Modern distributed order management (DOM) features handle order routing with decent accuracy. Establishing and maintaining zones and defining distribution priorities is the first step towards putting together a DOM system.
• An agile demand and inventory planning, allocation, and replenishment process is fundamental for such an operational shift. Machine learning and artificial intelligence needs to lead the way in approximating true weekly demand and feeding to weekly distribution planning and replenishment from main distribution centers down to fulfillment centers. This process is key to the success of the operation, and it has to be accurate and automatic.
• One big internal challenge in true omni-channel adoption is achieving consensus on how revenue centers are defined and how profitability is measured for online versus retail. If retail stores are acting as fulfillment centers, they are essentially consuming their sellable stock and there is no easy way to trace sales lost due to stockouts or unavailability of specific SKUs. One way to make this kind of model successful is to look at cross-channel revenue and profits separately for each store. Stores can also see their individual numbers go up with the success of the operation and maintain higher levels of safety stock at store locations instead of stocking only at the main distribution centers.

Amazon is big, it’s growing, and it’s here to stay. So is 2-day shipping. Sellers, distributors, and retailers must think creatively to counter the looming threat to their business. In order to survive and thrive, competitors must beat Amazon at its own game.