E-commerce favors native distributors
Several research institutions, including the presiding king of the data world that is Google, indicate that when it comes to retail sales a significant percent of local store merchandising is driven by e-commerce. As consumers, we’re going online to buy our products, and like picking them up at the local store. Or we try to discover what’s at the local store before we make the trip there.
For example, if you need a new Blu-ray player, you would probably check reviews online for the best one to fit your needs, then visit BestBuy.com to see if that model was available at your local Best Buy store. If it’s there, you might go buy it immediately. If the website indicates it’s out of stock, you may perform another search at another nearby store until you find what you’re looking for.
Online revolution strikes again
For the better part of a decade, purchases made online were eating away at the profits of brick and mortar stares. Instead of going to the store to purchase an item, more and more people would simply order it online and have it delivered to their home. If shoppers did enter the store and saw an item they liked, they would check to see if they could find it online for cheaper. This became known as “showrooming.”
For a retailer to make the most of this new consumer behavior opportunity, you need vendors that work very dynamically to provide sufficient inventory to your local stores at the right time. For that, you need trading partners located in proximity to your stores, so you can swiftly tackle any inventory shortages, and quickly address fulfillment issues under stringent timelines.
In recent years, as retailers integrated their online presence with their physical locations, online evaluation has become a major driver of local store sales. People now often research a product online and then to check to see if it’s stocked at a local store before leaving the house to make their purchase.
It’s also extremely important that the retailer and the supplier maintain accurate, real-time inventory data that can be displayed and automatically updated on the store’s website or mobile app. When the website indicates there’s inventory in stock, but the customer arrives and the product is sold out, it could mean the loss of more than the price of one item. They could have intended to buy a cartful, but if you don’t have that one item they came for, they will likely take the whole sale to a different store.
Local trends, local sales at local stores
Retailers woke up to this opportunity in the last few years when they discovered how much e-commerce and online evaluation of products is driving local sales. Having local vendors can also have a positive impact on the economics of the logistics, helping retailers reduce overall shipping costs and times. Additionally, retailers have realized how popular “shopping local” has become and how important it was to cater to local and regional preferences.
For example, in Minneapolis we have a completely different clothing requirement than what the people in Arizona or Florida might require. We need warm weather clothing by June, and winter clothing by December. In Arizona and Florida, they will only need light jackets over the winter, and won’t sell a single parka.
Local vendors are simply the best equipped to address the needs of local customers. We have many vendors here within our great state that understand and know how to address the clothing needs of Minnesotans dealing with the average Minnesota winter. And there are local vendors in Arizona that know and understand how to address the needs of an average Arizona summer.
Food is another example of the need for local vendors. You can have food trucked in from all over the country, and even from the next hemisphere, but it makes more sense and costs less to source these products locally whenever possible. For example, why would Minnesota need to spend money on having eggs trucked in from southern California when we have poultry operations here in the state? You can even source food suppliers from within the city in which you live, in some cases.
There’s no need for retailers to re-invent the wheel in order to create a local strategy around e-commerce. Point-of-sale analytics can help you examine the data for each individual store, and tailor a buying and inventory plan to optimize your purchasing efforts. A retail network can help you discover local sources of the products that you need, with fast onboarding. The technology is available and EDI Here can help you get started.
To learn more about how EDI Here’s sourcing, fulfillment, and analytics solutions can help you find local vendors and suppliers, please visit our website and request a free demonstration.