Retailers Focus on Online Channels – Throws New EDI Requirements To Vendors
February 1st, 2010 by Joe_EDI
Multi-channel merchants like K-Mart / Sears, Target, Costco, Kohls, and several others, are ramping up their online efforts. Vendors are required to implement EDI to exchange business documents that facilitate cross-channel orders. Warehouse management and outbound shipping systems have to be tuned to ship to multiple touch points for a single customer account, including drop shipping direct to the consumers address. The recession forced merchants to focus on effective inventory management which manifested tighter demand sensing throughout the supply chain and information exchange across supply chain partners. Merchants and vendors inventory on-hand and demand numbers are shared through the exchange of EDI documents and business portals.
Online retail sales currently account for 7% of all retail sales and many analysts predict growth to over 15% by 2015. Mobile devices browsing the web increases the amount of ecommerce activity for merchants. Mobile browsing and the emerging generations of web-savvy consumers will fuel growth in ecommerce sales. Wal-Mart and many other traditional brick-and-mortars recognize the emergence of online retail and are executing strategies to gain their share of this new frontier. Amazon is the online equivalent of Wal-Mart’s brick-and-mortar operations and represents Wal-Mart’s number 1 online competitor. Wal-Mart’s distribution network provides them with a strategic advantage servicing the online and the traditional brick-and-mortar channel. Wal-Mart’s 3500 + stores combined with their network of distribution centers, drop ship vendors and inventory management system enables them to route orders directly to consumers or to a store for pickup using the quickest and most effective routing option.
Wal-Mart is transforming their ecommerce operations to a globally synchronized operation to increase online sales in existing and emerging markets, including countries where they do not operate as a brick-and-mortar. Wal-Mart currently operates in 15 countries but has separate ecommerce operations for each country. Their goal is to consolidate operations into a unified system that leverages their incredible distribution prowess when competing against eTail giant Amazon and others. Wal-Mart and Amazon going head to head means the product mix carried on Wal-Mart’s site will continue to expand with price wars ensuing. This will likely provide higher levels of customer satisfaction and lower price points for consumers. For vendors there is potential for more price pressures, complex compliance requirements and distribution processes. The silver lining for vendors is the opportunity to expand sales through the online sales channel on a global scale.
