Suppliers will benefit from the consumer chain as a result of the retailer’s improved product planning and early forecasting resulting from the consumer collaboration in the consumer community. Improvements in early product and consumer input in product pairing and placement in the eCommerce site will result in inventory control and overstock improvements that would be shared with the suppliers while also improving the store product placement and marketing. This will allow the supplier to improve manufacturing planning and execution and improve the supplier capacities and abilities to fill spikes and drops in demand. The benefits from improved inventory control will flow through the chain to improve efficiencies and capacity while reducing overstock and write-downs.
The consumer community provides a critical link in this extended supply chain by providing a steady stream of data. This data is invaluable for decisions related to product selection, placement, pairing and marketing because it is derived directly from the consumer’s interaction in the community. This is much different than the information provided by surveys or focus groups. The responses to surveys and focus groups are only related to the assumptions and beliefs of the organization that creates the subjects of the surveys or focus groups. The data collected from the consumer community is completely different because it results from the consumer reaction and responses to actual product offerings and interactions with other consumers.
This data provides the basis for retailers to improve products and improve accuracy of forecasts. This in turn provides the supplier more accurate input into product design and the manufacturing forecast and planning of the product, which in turn allows the supplier to better support the demands of the retailer while allowing the supplier to support additional demands from their customers. This improved intelligence then allows the retailer to identify trends and new products earlier and with more accuracy. The end result is improved sales for the retailer and improved efficiencies for the suppliers. These improved efficiencies are shared with the supplier resulting in improved manufacturing accuracy resulting in reduction in overstock and improvement in new product development.
The consumer community becomes, in effect, a research branch for the retailer and the suppliers, allowing them to experiment while gauging the honest reaction of the consumers. This allows for small scale experimentation with new products along with experimentation on product placement and pairings. The resulting improvements in efficiencies allow the suppliers to increase their sales not only with their retail partner but with other retailers in the market as well.
And now for the audience participation portion of the show…
ECommerce will have wide ranging impacts on both the retail and manufacturing sectors. How can you focus these abilities to improve the consumer's experience? Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes. In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas. How can you support these continuously changing requirements?