The differentiator in an e-tailing business is often superior customer service. Many online retailers are relying less on captive inventory and services and depending more on an ecosystem of suppliers and specialized partners. It is imperative to build a highly integrated operational model to retain the core values of the online shopping business.

1. e-commerce
The E-tailing
Partner Ecosystem
– Choreography at Its Best
The differentiator in an e-tailing business is often superior
customer service. Many online retailers are relying less product listing with information
on captive inventory and services and depending more on on each product including images,
an ecosystem of suppliers and specialised partners. It is description and specifications to the
imperative to build a highly integrated operational model retailer. The available stock with the
to retain the core values of the online shopping business. supplier is sent frequently, in cases
daily, depending on the velocity of
By Shijo Sunny Thomas the product at the retail site. The
retailer publishes these products on
An e-tailing business can have the online retail site and orders their site as available to the shoppers.
multiple operational models. On the product. She receives an order An order placed by a shopper on the
one end it could be a highly captive confirmation e-mail followed by the shopping site of the e-tailer is relayed
model where all areas of the business shipment tracking details. Within two to the supplier, who commences
such as maintaining inventory, order to five days she receives the product, the shipment of the product to the
management, fulfillment and logistics but unfortunately the size is a customer. The supplier also provides
is handled in house by the online problem, so she calls customer service the tracking information of the
retail organisation. Another extent asking for a replacement which is shipment to the retailer who makes
is when e-commerce players tie up promptly delivered in the next three it available to end customer. In retail
with a marketplace of suppliers or days. Now imagine, if the only thing parlance, this kind of a model is
manufacturers to offer their products that the retailer where she shopped, referred to as dropshipping.
online on the ecommerce site. In had in its own stable, were the Depending on the level of
addition to the product suppliers, product images, an attractive offer and integration and service level
an online retailer could also rely a reputation for impeccable delivery agreement, a shopper might not even
on specialised service partners for and customer service. be aware that the product has been
e-mail marketing, shopping cart Online retailers attempt to exhibit delivered to her by entities which are
management, logistics and even the concept of an ‘endless aisle’ by not part of the retail organisation. The
customer service. These partnership- shifting the entire fulfillment aspect packaging and invoice will have the
oriented models help online retailers towards the suppliers. This way, brand and signature of the retailer
scale up rapidly by leveraging niche retailers can substantially increase and there will not be a mention of the
expertise in multiple business areas. the availability of the merchandise, supplier. Obviously, it is evident that
Cost factors also play a key role and it is not limited by the inventory the retailer has to go the extra mile to
when retailers rely on product and carrying capacity of the online ensure service reliability and visibility
service partners. retailer. To explain this aspect, in an at all points in the e-commerce
For instance, a customer receives online market place, retailers have supply network. The retailers brand
an e-mail for an attractive online established tie-ups with various image is constantly being tested by
shopping offer on a pair of shoes. suppliers across multiple product the customer from order placement
Quickly and deftly, she reaches categories. Suppliers provide detailed to delivery. Therefore, maintaining
102 . images retail . FEBRUARY 2013

2. e-commerce
high, reliable and consistent levels of shipment feeds containing tracking A new mode of operating the
customer service is the key to success. information which resides in the dropship retail business is through the
There is no standard mode of retailer’s order management system. use of supplier integration hubs. In its
operation in this e-tailing value There are other feeds related to simplest explanation, an integration
chain. Some retailers will opt to price and quantity updates; payment hub is akin to multi-socket extension
have the shipments delivered to reconciliations; returns and refunds board that we use at home. One end
their distribution centre and then management among others. of the integration hub is the main
ship it to the customer themselves. Traditionally many retailers have cable which connects to a retailer’s
In some cases, the retailer will have attempted and invested to define their enterprise applications. On the other
their logistics partners pick up the own integration standards. These end are standard sockets to which
shipments from designated supplier are made available to suppliers who multiple suppliers can connect to. The
locations and reorganise to be in turn make their own investments hub orchestrates the bi-directional
delivered to customer addresses. The to subscribe to these integration flow of information and has built
model implemented by the retailer services made available to them by in adapters for major ERP vendors
ultimately depends on the supply which can be used by the retailers
chain complexity and competency. to connect to their ERP applications.
Each operational model has a high On the other end, the hub exposes
degree of service level agreements all integration touch points which
involving shipping terms, order can be consumed by a supplier. Some
accuracy, packaging specifications, integration hubs also offer a full-
product personalisation etc. fledged interface to the suppliers in
Irrespective of the intricacies of such a manner that they do not need
the mode of e-tailing operations, an enterprise system at their end. This
it is evident that retailers need to caters to the smaller suppliers who
weave together a layer of technology do not have the requisite technology
to induce control and visibility into infrastructure available immediately.
their business. The focal point of These integration hubs also provide
technology in this business segment is The focal point of multiple integration methods to suit
the integration with the supplier base. technology in this the needs of the large supplier base.
Unfortunately, despite dropshipping business segment The hubs also have built in reports,
commanding a significant share of is the integration e-mail integration, workflows and
the etailing business, integration alerts to ensure effortless and reliable
standards are missing. This results
with the supplier communications throughout the
in retailers employing proprietary base. retailers define e-tailing supply chain.
methods to integrate with their the structure and In a market such as India, where
supplier network. The integration specifications. e-tailing is growing at such a rapid
methods are dictated often by the size pace, retailers can look at scaling
and scale of the retailer operations. up through dynamic partnerships.
Retailers define the structure and the retailers. This approach has turned Combined with an integrated
specifications related to the data out to be not only a costly proposition technology layer, the dropship model
that is required from the suppliers. but also complex. Often retailers can prove to be a double edged sword.
Retailers such as Amazon publish and suppliers end up duplicating Retailers can develop the capability
detailed specifications related to each information from the feeds so that they to offer constant availability of a
area of the integration touch points. can be consumed by their internal wide variety of merchandise and at
These can be accessed by the supplier systems. Smaller suppliers often only the same time have a firm grip on
network to build their side of the invest in ensuring that the retailer shipment delivery and customer
integration points. gets the information in the prescribed service. It is indeed the right time
The integration points refer to all manner and not concentrate on to turn the tables on dropship
touch points of interaction between integrating the information from the complexities and move on to drop-
a retailer and a supplier. Product retailer into their internal enterprise dead efficiency.
data feeds are used by suppliers to systems. This might seem a step up
provide detailed product information. from using paper, fax, phone or EDI,
ABOUT THE AUTHOR
This information finally resides in but when a retailer has thousands
Shijo Sunny Thomas is the
a retailer’s merchandising system. of dropship suppliers, a less than
Industry Lead–Retail & CPG at
Available stock positions are sent by optimal integration methods can prove Fujitsu Consulting India. He has
suppliers as daily feeds. Customer disastrous to the retail brand. Do worked extensively in advisory
orders are reverse feeds which are consider scenarios where one retail and operational roles with
sent from a retailer’s systems to the order has to be split into multiple medium to large cross-channel
suppliers. Suppliers in turn send the supplier orders. retailers
FEBRUARY 2013 . images retail . 103