In 2020, the ecommerce industry grew 44%. That was only in the US. Today, we are seeing even more growth in the first quarters of 2021 than we saw in the last quarter of 2020, making it a clear indication that ecommerce growth isn’t going away anytime soon. In fact, globally, ecommerce has been shaking up the way consumers are buying for years.
The industry and shopping habits of consumers all appear differently around the world and tend to trend from east to west. For instance, in China, ecommerce is a way of life and not just a way to shop. Platforms like Tik-Tok and digital “super-apps” have integrated themselves into the Chinese culture as the mainstream way of buying clothes, everyday grocery items, and a lot more.In turn, consumers, are rewarded with “cash-back” or other incentives like special releases only available through these platforms. Currently, in the United States, we have been seeing similar eCommerce platforms gaining popularity like InstaCart and Ibotta, both providing the same customer experience stateside.
While the United States is still adapting to many practices and marketing strategies from the east, We gradually see inventory problems and solutions present themselves.. One of the popular solutions is inventory management systems software. Inventory management systems software is changing the way ecommerce business owners are looking at their people, process, and technology. However, without proper guidance or a strong change management team behind the scenes, these inventory systems can often compete and even challenge your marketing efforts creating more headaches than the promised efficiencies.
What experience are you giving your customers? Today, ecommerce business owners are beginning to ask themselves this question more and more while focusing on gaining the highest return of investment for their marketing efforts. Currently, there are three major trends ecommerce business owners are adapting from eastern countries.
The social buying approach is one of the ways ecommerce owners have incentivized their customers and promote their products. The social buying approach relies on the old notion that one person tells ten of their friends about their experience, following with that same set of friends to spread the word to a hundred more people. In this strategy, consumers are incentivized to invite their friends and earn rewards and or reduce overall prices. Groupon, Fab Fit Fun, and other “bundle” product companies are often great examples of this practice. The benefit for the consumer is that they are ultimately helping other customers down the “marketing funnel” moving them from awareness to conversion quickly through a discount code and social “proof”. For the ecommerce business owner, this approach often means complex accounting practices and making sure customer service is tuned for high volumes.
In contrast, LiveStream Retail allows influencers and the brand itself to give “Social proof” through social platforms such as Instagram, Facebook, and Tik-Tok. These Live Stream retail experiences often look like “Shop Release Day” or even a live video where customers can ask questions publicly about the product. This strategy differs from the social buying approach as it doesn’t offer any direct customer incentive. Instead, these live stream “shop release days” create a sense of urgency or fear of missing out on the product through social proof that the product is worth purchasing while creating trust around the product through testimonials. While Livestream retail is growing as fast as ecommerce is, so are the inventory problems and stunted scalability. These live stream days and “shop release days” create a push and pull in the inventory making it harder to predict. This often requires a lot of preparation, resulting to your accounting being complex as ever.
While live stream days are popular on these social media platforms, lifestyle ecommerce is just as popular. The lifestyle eCommerce approach is another marketing strategy that ecommerce business owners are seeing.This approach doesn’t only require a great product, as it also needs a strong vision around the product. While better than the first two approaches, lifestyle ecommerce also has its inventory hurdles. For starters, it can be quite hard not to have capital tied up to your inventory and marketing efforts, helping you keep the momentum for your product to stay alive.
Last but not least, online merge offline ecommerce, or OMO ecommerce, is another way retail brick-and-mortar stores are trying to enter and compete in the ecommerce space. This often results in using the two above methods with their own digitized touchpoints in the storefront. OMO ecommerce results in heavy overhead, and without the dialed-in processes can create a messy customer experience. Often ecommerce owners who use OMO need inventory management systems sooner than later, resulting in a panic purchasing state to “fix” the problems and streamline the data from the storefront and the ecommerce marketplaces.
The Inventory Management Systems
So how are these inventory management systems handling these unique approaches to your business? Simply put, they aren’t. The technology itself won’t solve your problems and it surely won’t help you gain growth if you don’t have the proper processes and the proper people handling implementation.
While inventory management systems do help you align your business goals with your inventory, the technology itself relies on your processes and workflows to make those goals visible and tangible. If your processes and workflows aren’t optimized prior to implementation, the users can’t possibly make it a “smart” tool to use and often just causes more problems resulting in more inefficiencies and money out the door. If you are using any of the trending marketing strategies we’ve mentioned above, your ideal solution is to have a change management team assist in helping you see where and when you can strategically streamline your customer experience, your inventory data, and your business controls. This is the only way your inventory management systems can finally serve its purpose, and help your business alleviate its problems caused by social marketing strategies.
While it may seem that jumping into an inventory management system is the most logical step to take, we’re here to tell you that it can be both challenging and dangerous. The danger and difficulties come from implementing the inappropriate system for your business or worse, it may also come from a failed implementation just because you didn’t have enough knowledge or resources to achieve progress. To gain growth and scale, it is important to have a team dedicated to your business and with an objective outlook on the issues, you may be encountering.
Growth & Scale
There’s an old saying that goes “Two heads are better than one.” With Clearinity implementing inventory management systems, this saying has never felt more accurate than it already is! We understand that a holistic approach to your inventory needs, business goals, and resource management must be achieved in order to grow and scale your ecommerce business. We don’t just onboard you and wish you the best of luck either. Our goal is to support you through a large change to your business and make it successful! Inventory management system software is an investment and we understand that.
We also understand that some business owners who use the above-mentioned marketing strategies don’t always fit our ideal clientele or even understand how they could benefit from an inventory management system and that we are ok with it. We still want to be a guiding resource that helps you growth hack your business until you are ready for a system. You can always continue to read our blogs, check out our podcasts, and schedule a chat with us to find out!