How Operations Leaders Can Enhance SMB E-Commerce Efforts

When e-commerce adoption rates skyrocketed due to the pandemic, operations leaders needed to implement new best practices to adapt to digital selling models. More and more consumers flocked to online shops when retail storefronts shut down. Statista reported a 62% dip in U.S. customers frequenting physical stores, while the number of online shoppers increased by 52% (1). While this presented small and midsize businesses with unprecedented challenges, it served as a blessing in disguise. Manufacturers are now primed to maximize the benefits of a growing marketplace with digital investments. Operations leaders enhance e-commerce efforts with enterprise resource planning (ERP) technology.

Increased Supply Chain Resilience

Perhaps the biggest benefit of adopting e-commerce during the pandemic was an increase in supply-chain resilience. With retail shut down and logistics constrained, digital selling models allowed manufacturers to sell directly to consumers, taking their sales into their own hands. With supply chain technology, operations leaders enhance e-commerce efforts by planning production to meet expected demand, ordering raw materials at the appropriate time to avoid excess inventory and stock-outs, and optimize logistics routes. Many consumer product manufacturers were able to not just survive but thrive during the pandemic by adopting digital selling models straight to consumers, when wholesale distribution was no longer a realistic or efficient option.

Cut Inventory and Logistics Costs to Provide Free-Shipping

53% of consumers name free delivery as the primary reason they purchase from an e-commerce vendor, making it the number one reason why people shop online (2). 93% of online shoppers are encouraged to buy more products if free shipping options are available (4). However, free shipping can be a heavy burden for SMBs, especially since e-commerce margins are already relatively low. By optimizing inventory levels and logistics, operations leaders enhance e-commerce efforts by reducing inventory and shipping costs. ERP technology can help optimize delivery routes and maximize shipping container usage, meaning lower shipping costs. Furthermore, inventory management software helps to avoid excess inventory and storage costs. Reducing operations costs can offset the increased spend on providing free shipping to customers.

Plan Reverse Logistics for Simple Returns

88% of shoppers want the ability to return a purchase, and 95% of them claim a smooth return process will turn them into repeat buyers (3). Similar to a product recall process, operations leaders can have reverse logistics in place for streamlined returns and refunds. Full supply-chain visibility makes it easy for operations leaders to see the most cost effective way for consumers to return their products. Furthermore, quality control modules in modern ERP systems result in fewer returns and increased profits.

Conclusion

The shift to e-commerce has potential to increase profits substantially for manufacturing businesses of any size. Operations leaders enhance e-commerce efforts with technology and strategies that cut costs while meeting increasing consumer expectations.

Sources:

1. https://www.websitetooltester.com/en/blog/ecommerce-statistics/
2. https://www.oberlo.com/blog/ecommerce-statistics
3. https://www.shopify.com/enterprise/global-ecommerce-statistics
4. https://ebizcharge.com/2021/04/23/6-ecommerce-trends-for-small-businesses-to-grow-in-2021/