year, the US witnessed one of the longest and harshest winters in recent
history. This has caused worrisome implications on the supply chain economics
of the Consumer Electronic Industry since many customers resorted to shopping
for products from the warmth of their homes. Manufacturers who were focused on omni-channel sales lost out on margins due to the increase in fulfilment costs,
sometimes as high as 7-10% of sales.
has unlocked a huge opportunity to use ongoing analytics to streamline
general, there are 3 ways in which customers can chose to purchase their
Direct purchase by walking into company owned or
Ordering (or reserving) online and picking up their
wares from a store of their choice
Ordering online and opting for home delivery
of the right fulfillment incentive for each channel is paramount since costs,
consumer experience and opportunity tradeoff for companies depend on the
channel choice made by the consumer.
instance, today we see the extensive use of online channels to sell long tail
products. Whereas, smaller products are
sold through stores due to lesser storage costs. Although online configuration
and cross-sales sophistication is improving, products with higher sales
complexity would require the customer to visit the store sometime during the
why should companies look for the right analytic tools?
costs, based on parameters like real-estate, shipment, retail floor traffic,
SLA compliance rates of third party logistics providers, are prone to fluctuation
throughout the year somewhat predictably during the holiday season, but
unpredictably during unforeseen weather conditions. This is what happened this
winter, when the tradeoffs between the various parameters changed. The affected
companies were still latched onto static and simplistic approaches for pricing
online fulfillment of products. This is where 'right analytics' comes into play
in order to optimize consumer incentives and improve profitability.
prize for such analytics extends beyond immediate fulfillment cost reduction. This
will help plan fulfilment more efficiently and lead to better negotiations with
third party logistics providers. It will also help drive improved cross sales leading
to enhanced customer lifetime value.