Retail Supply Chain Insights Interviews ProShip's Matt Mullen about the Amazon Effect
Published on Retail Supply Chain Insights on April 23, 2018
Amazon finally disclosed how many Prime members it has. What does this mean for today's retailers?
Mullen: How many other retailers have 100 million participants in their loyalty program? Very few - if any. If I were a retailer, I would be asking myself, why Amazon and not me? And then, identifying opportunities to deliver experiences the customer wants so that I can drive loyalty. This bears repeating - give the customer the correct experience, and they will return more frequently, spend more, and advocate for your business.
Mullen: Take the online experience as seriously as you take the in-store experience. Retailers doing business online have three opportunities to satisfy the customer:
1. When they are on the site - Do you have the right products at the right price? Are they easy to find, do you have my size/color/style/shape/brand/etc.?
2. When they are checking out - Do you have the options I want and need? Are those options priced to meet my expectations?
3. When the product arrives - Did it get there on time? Is it damaged? Is it packaged well?
Two of the three involve shipping. Amazon started online - they understood they only had three customer touch points, so that is all they thought about. They designed their business model so that the limited touch points they had were designed to delight the customer - how many physical retailers that are now doing business online can say the same?
How can e-commerce companies execute a customer-focused strategy that drives revenue and profit?
Mullen: One size does not fit all. It is incredibly important to align your operating environment with the strategy you have in place for the business. But with that said, we know that the strategy in place today is not the same as three, two or even one year ago. As a retailer's e-commerce business grows, the retailer's knowledge of its customers will grow as well, offering new opportunities to enhance their experience and loyalty. Finding a solution that integrates with your other retail technologies, but is flexible enough to grow with you, is critical.
Much like Amazon's Prime Day, what do you think about Wayfair's Way Day?
Mullen: We think this is a great idea and wish Wayfair great success on April 25th. I know the Mullen family will be visiting their online store that day. I hope they are ready for a significant increase in order volume and have the operating environment in place to handle it. E-commerce was 10.2% of all retail in 2017 with that number projected to grow to 17.5% in 2021. More than 1 out of every 6 retail transactions will occur online. For pure play retailers like Wayfair, this growth puts tremendous stress on operations. Having solutions that are proven at 100x current transaction scale means no issues in satisfying the customer during peak season, or a holiday.
Matt Mullen is Senior Vice President and Managing Director for ProShip, where he and his team focus relentlessly on delivering value to leading retailers and commerce supply chain participants. Prior to joining ProShip, Matt held Executive roles with Epicor and Visa, where in both cases his primary focus was on enabling the improvement of global retailing. Matt lives in the San Francisco Bay area with his wife and two children.
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