E-Commerce and Manufacturing Convergence Benefits Companies and Customers


In the New York Times, Clair Cain Miller and Stephanie Crawford examine the phenomena of e-commerce being used to build premium brands. They chronicle a designer frame and eyeglass company, Warby Parker, whose roots trace back to its founders investigating why designer glasses cost several hundred dollars or more. The reason? Everyone in the process was taking a cut: designers, manufacturers, brands, wholesalers and retailers:

“I had been to the factories and knew what it costs to manufacture glasses and knew the cost didn’t warrant a $700 price tag,” said Neil Blumenthal, a founder of the company. Inspired by glasses they found in their grandparents’ attics, the founders sketched a few frames, hired the same Chinese factories that make designer glasses, and started selling directly to consumers online. By doing so, they eliminated enough of the cost to charge customers just $95 a pair. 

Warby Parker is part of what Miller and Crawford call a wave of e-commerce companies that are building premium brands at discount prices. The result, say the authors, is generally lower prices for consumers and higher profit margins for companies. This development is not attributable to e-commerce technology alone. Rather, it is also the result of operating without the fiscal demands of having physical stores and the new willingness of manufacturers to work with smaller brands.

A good example is the home furnishings industry. As home sales in the United States declined, and furniture sales went with them, Chinese furniture factories had excess capacity. While the factories had previously been unwilling to take small production orders, they became eager for business. Even though there was some concern about payment (i.e., they were already chasing their traditional retailers for slow remittance), smaller companies were able to negotiate terms appealing to the sector, such as paying for products as they are shipped.

In a ZDNet.com blog post addressing why even small local businesses should consider e-commerce, strategist Craig Zarmer encourages small and mid-sized businesses to consider e-commerce as a means of forging tighter relationships with customers. Among the strategies he recommends: consider multiple storefronts including Facebook, seek a solution that accommodates mobile shopping and administration, and don't forget to include real-world contact particulars.

The emergence of smartphones, tablets, and other mobile devices is pushing e-commerce inexorably towards mobile capabilities. “Obviously, consumers are doing more and more shopping on the go,” says Zarmer. “Or not necessarily on the go—they could be shopping at the dinner table or in bed. They've got their smartphone or tablet handy. It is sometimes on the go, but it is also sometimes just because that is the device that they use most often. Clearly, you are going to see more and e-commerce sites have mobile-friendly offerings.”

To get more specific, an article on cpcstrategyblog.com identifies essential components to the implementation of mobile e-commerce:

  • Site speed is crucial. Google Research indicates that the number one asset a mobile site must have is a loading time of 5 seconds or less.
  • Convenience is essential. You never want a customer leaving your site because they couldn’t find your call to action.
  • The opening page is key. Since consumers will generally only be on your mobile site for about a minute, present all relevant information in half that time. Your first page should clearly display your contact information (the main thing people look for when browsing from a phone) and all your products’ information (the main thing shoppers look for when researching from tablets).

A further important benefit is the ability of brand owners to introduce products more rapidly, feeding customers’ huge appetite for the new. According to Miller and Crawford, start-ups are also using manufacturers as research and development centers, getting a firsthand sense of what larger brands are doing, to support this effort. “E-commerce is beautiful because it is natural to collect very valuable customer contact info as part of the checkout process,” says Zarmer. “If you are the sort of business that has new products or you sell a staple and you can remind people to come back, you would be amazed at how much possibility there is for generating repeat business.”

Posted by Epicor Social Media Team


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