One basket only? Proceed to self service In tough economic times having lots of customers to sell to can give you a warm fuzzy feeling. But how many of them bring any real value? That warm glow could soon turn to a cold sweat of panic when you see how much it costs to sell to the low-value customers. “The segmentation of customers is vital,” says Dale Vile of the …
Sadly CPiO are the buffoons that brought Scolmore's original Sage implementation in at around 30% over-budget and nearly cost the decision maker his job.
As early as 2000 we (CPiO) were able to provide e-Commerce integration to what was then called Tetra Chameleon in Manufacturing, but the sales clowns were unable to do anything other than "give it away" in a rush to close a deal at any cost.
Sound familiar?
This (having low volume customers order "self-service" via a website) is only the first step. In the picture the author paints, it's difficult to see exactly what value the online retailer is adding. Wouldn't it be more efficient for the manufacturer to cut out the middle man, set up their own website and fulfillment operation and sell direct to the public?
I can see that most would rightly say "We're makers, not sellers - we don't have the skills." In which case the answer is outsourcing, a la Amazon Marketplace and all the other "etailers" like it.
The only value that a retailer has is when they can offer advice (even though it's never impartial advice) and provide a modicum of after-sales support. If the retailer is on the highstreet AND customers are prepared to pay the premium attached to being able to hold and/or fiddle with the merchandise, then fine. However these days most shops seem to be populated by cashiers, rather than salespeople. - Ask them a question and all they do (while avoiding eye contact) is mumble "I'll get the manager".
Even for items or spare parts that you need RIGHT NOW, most retailers fail. With the pressures of profitability and limited shelf-space, they probably don't have specialised items in stock - or you have to drive 80 miles to find the last item in the county (and then another 80 miles to exchange it when you find they sold you the Mk2 and you need the Mk3).
So, shops are still viable for people who's hobby is buying stuff, or retail therapy to try and put a worthy spin on it (blind consumerism would be a less generous observation). Where the goal is just to buy something - anything; not because you want it, but because it feels nice to have an assistant fawning over you. However those aren't really shops; they're massage parlours for the ego and as such require a completely different online solution.
So, if this is the way of the future, the trick is to recognise which way the wind is blowing. Either as a retailer and buy-out your suppliers, or as a manufacturer and take over, or build your own, web based outlet. Either way, it looks like the shakeup in retailing has barely started.
There was a lot of talk a couple of years ago about how virtual worlds like Second Life would take off as the shopping arcades of the future. So if you wanted the fawning assistant able to answer any question you could think of, you could still do it online (in principle). I'm not holding my breath, but there may be ways in which the online experience could be tailored to the amount you are willing to fork out.
my missis worked as a telephone salesperson for a consumables outfit. She'd happily take any order, from a box of 8" floppies (and they were obsolete then) to 10,000 acoustic covers (remember them). Her colleagues constantly took the piss, but missed the point that she had hundreds of customer contacts, to their dozens.
Losing one £1 profit customer from 1,000 is less painful than losing one £1,000 profit customer from 10
The biggest part of selling via a website is the logistics. If as a manufacturer I make 5000 of an item and sell 500 at a time to 10 retailers, that could mean me simply shipping out 10 pallets of goods, which might keep 1 or 2 people employed. If on the other hand I sell those 5000 items to 5000 end users, that means 5000 shipments having to be packed, 5000 picking lists/despatch notes/invoices to print, that could take a lot more than 1 or 2 people. The article says this company holds 5500 different items of stock, so that's a lot of picking for orders.
The company I work for distributes car parts, we hold about 20000 items in stock, and it's certainly a lot easier for us to pick 50 of this and 100 of that for our wholesale customers than 1 of this, 2 of that for our retail web customers. One of our wholesale customers tells us they are having trouble keeping up with their web retail orders, they employ 25 full time staff. We supply probably 20-25% of what they sell, we have 1 member of staff pick and pack their weekly order in about 4 hours.
Ha! We've been doing integration with Sage, old Tetra, AS/400 systems, AX, Nav and a whole pile of other CRM systems for years. It's not just integration it's being able to sell to trade at agreed terms , discounts and promotions. Retailers want to know they are going to get the best deal like any other customer. We also provide access to Order and Invoice history so they can see what's going through their different buying channels: Web, Fax, Reps etc.
We've also been quietly doing this for the NHS when they order wound care products. PCT managers can see what their spend is and reduce waste and their costs. No one's making a big noise about that either.
http://www.aspin.co.uk/ecommerce if anyone is interested.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
