The Velocity of Ecommerce and Sales - Part 1
Jan 9, 2020

The Velocity of Ecommerce and Sales - Part 1

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Early teleshopping in France, in the 1970s, paved the way for today’s ecommerce store, and now, 51% of Americans now prefer to shop online rather than in-store.

A memorable brand experience and gaining long term customers is still the objective for any seller. Although social media has proven a powerful tool for marketing products, the urge persists for many shoppers to just get-out-there and find real human interactions. 

Brick & Mortar 

Main street still holds customer loyalty for one-stop, theme and specialty shopping, and owners and managers can sample the customers’ wants, needs, and concerns. Customers can test, or try-on, and glean more product performance information.

Global Ecommerce

Ecommerce has clear advantages over “brick and mortar” stores, such as lower operational costs and 24 hour selling. Customers, across global markets, can compare prices and buy the selected product at the best prices. 

The creation of marketplaces, affiliates and third party sellers, social media, and reviews, enables faster buying by reaching large audiences 24/7, and produces a shoppers’ multiverse, including B2B, B2C, C2C (eg Etsy and Craigslist).

Omni-channel 

Simply put, OC is ecommerce integrated with specialty retail on main street. Omni-channel customers spend two to three times as much, on average, as a single-channel customers buying from in-store-only or online-only. 

It has to be noted that it does require adapting inventory management and marketing campaigns, but OC is a very potent, cross-channel, content strategy that allows customers to research, browse, shop, and purchase seamlessly on different platforms. 

Future of Ecommerce

By 2022, ecommerce revenue in the U.S, alone is expected to reach $707 million. Mobile sales will top 50%

Sellers capitalizing on this trend experience the pressure, demands and complexity that scaling up entails.  Automation helps to offload these factors. 

Adapt to Changes

One of the latest significant events on the horizon, which is putting pressure on third party sellers, is Amazon’s branding. Formerly a lucrative and creative niche for entrepreneurs and established companies alike. For Amazon Sellers, this puts the importance of crucial decision-making in the fore. What is needed is to give as much competitive edge as is possible. This requires real-time analysis of metrics, inventory flow, and cash flow predictions.

Intro: Whether you’re on the go or in the office A2X will save you time and money. You’re selling on an e-commerce platform and you want to do it right. This video is an interview with Conrad Rohleder, founder of Clearinity, a premier integration company.

Conrad Rohleder: When you had brick-and-mortar stores, a customer had to stand in front of you and you had to sell them a product. With e-commerce, you’ve got 10,000 orders a day and you don’t even need to talk to customers on Amazon; it’s huge!

Businesses for the last several thousand years have really kind of been stuck in what I call stage 3, that there’s some evolution that can happen. But eventually, they were topping out at this very real-life thing which was that in order for you, Karen, to be able to sell the me, Conrad, we had to be in the same place at the same time, looking at the same products and agreeing on a sale right then and there, you know?

And… and, yeah, sure there was some evolution in some intercontinental trade, but that still involved people it was very slow process. You know, we… we didn’t start to see real changes until things like mailers came out or you could scribble your order and mail it away, but then we saw a huge change when ecommerce started. You know, the concept of the internet and this technology boom, it really changed it dynamic because now, I could sit in my PJs at 2:00 AM and you, Karen, could sell me something, and you could be on the other side of the world and never have… even have to talk to me, you know? So, that… it’s really increased the velocity of orders, but it’s kind of come at a complexity cost too, you know?

Transcript below:

Karen Brady: Right. Well, let me catch you right there because I’m dying to know, what is meant by velocity in this context?

Conrad Rohleder: Right, good question. And… and velocity in this context really does refer to the fact that it is the speed of orders being generated, but also the speed of orders having to be fulfilled. And that altogether would be business velocity. Yeah, so velocity in this context really is the speed of orders coming in and being generated, but also the speed of fulfillment of those orders. So, that together is like business velocity, right? But the huge challenge here is that, in order to do it at the scale that can happen today, even small businesses have to consider automation and outsourcing, and that has its own problems, it goes back to this complexity question, you know?

Karen Brady: So, we’re taking that model of brick and mortar and then showing how that has expanded into the e-commerce profile and how it’s impossible to keep thinking or doing things the same way anymore, you have to think, “Okay, now I need to automate all these things, and I can’t possibly hire that many people.”

Conrad Rohleder: Right, right. And… and like you said, there’s outsourcing and that involves bringing in… especially something like… like a third party logistics company that will do your fulfillment for you, it makes intuitive sense, “They’re very good at this, they can do the warehousing, let’s just use them.” But that has its own problems because now, you don’t touch your inventory, but somehow, you… your business needs to know how much inventory it has; it’s just kind of a crazy paradox. So, this is where people turn to tools like the ERP, enterprise resource planning tools. The famous ones are NetSuite, SAP, etc. In my experience, companies don’t really afford that very well though until they hit about 50 million dollars top-line revenue.

Karen Brady: Okay.

Conrad Rohleder: It is a huge challenge of course, you know? And… and if you talk to SAP and NetSuite, they’ll say, “Oh, no, we can do a lot lower in that.” And 6 million is a benchmark I heard from someone else, and I said, “That’s fine, but it still comes at a cost because the cost of integration, the cost of onboarding,” the point is that there’s no such thing as a perfect solution here. And businesses today have to make huge trade-offs between, “Does it work?” or, “Can I afford it.”

Karen Brady: Exactly.

Conrad Rohleder: Yeah, yeah.

Karen Brady: So, naturally, sellers will try to go with the tools available on the apps market today, and logically ERPs would seem high on the list, but obviously, they have to understand, you know, what you just need to live without. And so although automation can definitely be a boom to e-commerce, the reality is that many businesses rely on outdated models. So, many thanks for your time and the benefit of your experience.

Conrad Rohleder: Thank you, thank you.


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