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Supply Chain Design to Setup a Successful E-Commerce Store

What do you need to roll out for a CPG firm online store?

E-commerce is one of the fastest growing channels in the world right now, as we all socially distance and buy nearly 100% of our products from our homes. With smartphones, laptops, and apps, it’s never been easier to access e-commerce platforms. That’s why consumer goods companies pursue an e-commerce strategy for multiple reasons.

  • To generate additional sales, especially in regions with limited retail partner reach.

  • To get consumer insight that can fuel innovation for the product portfolio.

  • To appeal to newer generations that shop mostly online, or at least makes buying decisions online (Gen Z and millennials)

However, CPG firms face challenges in operationalizing e-commerce. Some of the difficulties the firms face include:

  • Issues with the fulfillment of direct-to-customer channels.

  • Execution of support processes like payment, order tracking, last-mile delivery, etc.

  • Additional capabilities in term of analytics, pricing engines, inventory visibility, etc.

Ultimately, your key objective for setting an e-commerce strategy will define the stack of capabilities you will implement across technology and data, operations, and an operating model. The common denominator of capabilities required to establish customer-centric focused e-commerce are as follows:

  1. Invest in capabilities to integrate the back-end of the online store with the rest of the operations—including warehouse management, inventory synchronization, and order handling.

  2. Develop near real-time visibility of inventory in online stores by connecting the order-management system directly to execution at fulfillment or warehouse.

  3. A sound logistic network. The majority of players leverage 3PL to guarantee speed, scale as needed, and quality.

  4. Firms with their retail network can take advantage of stores as e-commerce fulfillment and return centers and create differentiated service levels for customers.

  5. Ease of returns is a critical element of customer service and differentiation. Firms need to develop robust returns and service strategy supported by integrated reverse logistics and returns operations.

To have a successful set up for online presence and focus on revenue growth and brand benefits, investing in operational capabilities aligned with business strategy for the e-commerce business model is essential. The focus should be on solving the informational friction points between your traditional business model and e-commerce model to help reduce risk by increasing visibility, better control, and enhanced customer experience.

As more people than ever before choose the internet as the focal part of their shopping process, its important for CPG firms to provide them with an easy, seamless experience that increases e-commerce reach.

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