Ecommerce is growing quickly. Consumers spent more than $517 billion online with U.S. merchants in 2018, up 15% from approximately $450 billion the year prior, according to a new Internet Retailer analysis of industry data and historical U.S. Commerce Department figures. And there’s no sign that growth will slow any time soon.
But with more consumers spending online, retail competition is rising. Retail research company PipeCandy reported that there are now about 1.3 million ecommerce companies in the United States. With so many players competing for consumers, retailers are scrambling to find new ways to get their products in front of customers, says Anthony Hockaday, director of client services at Radial, a global omnichannel technology and operations provider.
“Retailers now want their products on a variety of different channels,” he says. “Not only selling on their own brand web stores, but also venturing into marketplaces and reverse drop-shipping, where they sell on another retailer’s web store because that retailer is a good fit for their end customer.”
Retailers with physical stores are also seeking new ways to offer customers multiple purchase and fulfillment options, Hockaday says. “Buy online pickup in store is standard now,” he says. “We are seeing some retailers offer reserve online pickup in store as a convenience for their customers.”
As retailers expose more consumers to their products, they’re under increasing pressure to fulfill those orders quickly, easily and cost-effectively. That requires them to dig into their data to examine historical purchase behavioral patterns and to identify potential high-selling items, Hockaday says. “They need to understand where their high-selling items are regionally so they can stock those products close to those customers to drive faster delivery times and minimize shipping costs,” he says.
That can create issues when merchants try to implement these practices on their own. “When it comes to marketplaces and reverse drop-shipping technologies, understanding what to integrate, how to integrate it and how to do so in a way that provides a seamless experience to their customer on any of those channels can be complex,” he says. “Those same technical challenges exist for integrating with delivery carriers—whether national or local—that allow retailers to offer multiple delivery options.”
Hockaday recommends retailers work with a technology provider that offers the technical capabilities and expertise to guide them through the entire process. “Most retailers need a technology suite that solves these problems for them,” he says. “Radial, for example, provides out-of-the-box solutions with best-practice configurations that are configured to a retailer’s specific business rules. That allows them to expose the products in a variety of channels while giving customers flexibility on how they want to purchase and receive the product.”
$1 billion goal
For example, Radial recently worked with a sporting goods retailer with 465 physical stores and $165 million in annual ecommerce sales. The merchant had a five-year goal to reach $1 billion in ecommerce sales. After implementing Radial’s omnichannel capabilities, the retailer was able to leverage its store network and ultimately fulfill 72% of the ecommerce orders through those stores. Within only three years, it hit its $1 billion goal.
“Omnichannel retailing is complex and doing it on your own is challenging,” Hockaday says. “Radial has the expertise and proven track record to help retailers solve those complex business problems, maximize their investments and implement technologies that are scalable and flexible to be able to adapt to the ever-changing ecommerce landscape.”Favorite