“The platform is not only for the consumer but also for the seller,” said Henry Zilberman, Founder of Yumani. “My idea was to provide them both with a win-win situation. We worry about the customer getting the right price and we worry about the seller who should not have to spend so much money and pay fees they shouldn’t have to. Yumani will increase business. Manufacturing will go up. Jobs will go up. And this is only the beginning.”
In preparation for pre- and post-holiday season, such findings serve as an important wake-up call not just to retailers across the company, but their supply chain enablers and key partners as well.
Online shoppers in the U.S. will spend $327 billion in 2016, up 45 percent from $226 billion this year and 62 percent from $202 billion in 2011, according to Forrester Research Inc.
But while the increase in e-retail spending makes up a large part of the increasing shift in retail, businesses must understand that a one-size-fits-all approach to bring goods to market does not work.
“There are two things we have to think about here,” said Tompkins. “One is multi-channel—so brick and mortar is a channel; online is a channel. But what we need to do is not only have a supply chain that deals with the multichannel but we also need to have an omnichannel, which gives the customer a complete view of our offerings any time, any place they want.”
“But we can’t just view online retail versus in store,” he continued. “The mistake companies make is they think that the objective is to be really good at omnichannel. But they have to be great at all three aspects—online, in store and at omnichannel. Brick and mortars have to figure out ‘how do I make my brick and mortar an asset with my multi-channels to allow me to gain market share.’ That is the key,” said Tompkins.
In fact, the move to omnichannel was largely compounded by the fact that certain consumers preferred different channels—many of which had different preferences for shopping and different preferences for buying.
Adding more to the all-encompassing omnichannel are the requirements consumers place on their retailers, affecting their supply chains. Customers no longer solely rely on five-business-day shipping standards. Now, they want same-day shipment and generally free shipping—the latter of which often times proves beneficial to retailers as shoppers spend an average of 30 percent more when free shipping is available, according to Kevin Reader, Chief Marketing Officer, Invata Intralogistics.
“Retailers looking at the omni-channel customer recognize that they have to control their delivery channels,” said Reader. “They are building and operating new distribution channels themselves in order to make sure that the customer experience—from research and info on the Web to order entry to delivery and receipt of a package by the customer—is consistent across both brick-and-mortar and ecommerce and that they have control of that channel. The opportunity is pretty significant.”
Consequently, the competitiveness in the retail space is putting pressures on those retailers to provide efficient shipping services as, again, customers want their purchased items sooner rather than later.
“Free shipping is where it is headed,” confirmed Curtis Mitchell, Director of Business Development, ShipStation. “It’s very smart marketing and we’re starting to see that from some of the big boys out there like Amazon and Wal-Mart and Sears. And the average small-to medium-sized business owner who is trying to sell products on the Internet—they are feeling the pressure from the free shipping and are feeling like they need to do something to compete as well. It’s getting to the point where some of these small-to-medium-size business owners are trying to increase the price to offer the best rate that they can so they can offer the free shipping without it having too much of an impact on their product price,” said Mitchell.
And Web-based shipping service provider ShipStation helps such business owners realize the better options that are available to handle small or batch shipping orders for a price that won’t necessarily cause huge financial strain on the company. The startup—just over one year old—services over 2,400 online retail stores, processes an average of $1 million shipping labels per month and cuts online customers’ shipping time anywhere from one half to one third.