E-Commerce: an interactive, digital version of a physical storefront with active transactions. As daunting a word it seems, like most transitions to completely digital versions of something, e-commerce has been around for a long time.
Think companies like Amazon, Target, Saucey, Drizly, Walmart and Kroger. Some companies have slowly transitioned themselves to introduce e-commerce in a successful way, all while maintaining a storefront like Target and Walmart. Some started as e-commerce, and have thrived there on. But, one company, Kroger, has taken the integration to e-commerce a step further.
In May, 2018, Kroger announced a deal with Ocado, a notable fully automated, online grocery retailer in the UK, known for using robots instead of people to process and fulfill orders.
Previously, Kroger did offer online sales, but all orders were processed in each individual store, with options for pick up or delivery by Kroger themselves. Now, with the Ocado partnership, they are taking their interaction with the consumer one step further. Kroger first began this deal in response to Amazon’s $13.7 billion acquisition of Whole Foods in the summer 2017 to begin home grocery service. They are the first grocery retailer in the U.S. to make a move towards full online automation.
What We See
The move to more and more e-commerce is becoming a norm amongst retailers, especially grocery retailers. Amazon has led the charge in this movement.
E-Commerce is also beginning to affect distributors because of the change in who is ordering what, and how it is getting there. Retailers are searching for a way to make ordering even easier from the distributor, and have it all in one place, maximizing efficiency.
Another notable change is an increase in online alcohol sales despite the increase in difficulty because of regulations. As of now, alcohol accounts for about 0.7% of online sales compared to 4.6% in-store sales.
The big question after all this is what’s next? We know what it is like now because as personal consumers we have immersed ourselves in e-commerce. But, that isn’t helpful for predicting what will happen in the future. Here is what we think will happen:
E-Commerce will move primary communication and operation from retailer to the consumer to supplier/distributor to consumer. As e-commerce progresses, it will no longer need the stability and operation of a retailer to be the middleman and physical appearance between the warehouse and the consumer. Instead, operations will progress into distributing straight to the consumer.
Next, we have to think about how bypassing a physical storefront will impact both the distributor and the consumer.
Trust in digital appearance is growing, based on the prevalence and dependence of computers and digital communication world wide. With this trust (it’s still growing), and strong digital platforms, it will continue to move to full reliance of online interaction. Distributors will have to be flexible to the inevitable change and adjust to continue profitable practices.
Another inevitable change any company will have to adjust is their online presence to market themselves with digital content.
The old is gone (ads in print) and creating content that won’t be shown on the internet is scarce, and now, less valuable than online content. Creating or redefining your brand online is different than in print, because the access you have to potential customers is much greater than print. The information put online is available to everyone and the use of tracking data allows companies to pinpoint specific areas.
All this information brings us to the last point, if everything is changing, what is Encompass doing to stay ahead of the game? Encompass has a feature called DSDLink. DSDLink is an electronic communication and transaction service between retailers and distributors. Within the DSDLink application, retailers can:
- Order anytime
- See featured products and promotions
- Sales History/Recently Purchased
- Browse New Products
- Order History and Status
- Request Delivery Dates
- Pre and Post Delivery Notices
- Order for Multiple Stores
- Customer Specific Pricing
- Details Sourced from Your Products
DSDLink is ahead of the game for distributors, because they are learning a system built on online interaction. Efficiency is maximized and both sides have the freedom they deserve. Freedom also introduces transparency because all users have access to status updates, order activity and useful data.
The future includes change because change will always be inevitable, especially when technology is involved. E-Commerce is a part of that future and we want you to be prepared for it. DSDLink is just one more helpful tool.