The split between physical retail and e-commerce is often blurred. On the face of it, both avenues of sales can seem very similar. They’re pushing the same stock, appealing to similar demographics and both have to encapsulate the same end-to-end customer experience.
One of the main points of difference exists in the warehouse. And the main issue is one of scale. Larger, traditional retailers are used to dealing in pallets and cases. Now, they’ve been forced to adapt to a new environment where consumers buy a mix of individual items. By becoming more granular, the way that these warehouses work has been forced to change.
Remember: e-commerce is not an extension of the offline store
Something that a lot of retailers try to do when looking to convert the real-world success of their stores into the digital space is carry over their existing retail Warehouse Management System (WMS). Which is a mistake. The obligations of e-commerce fulfilment, and the demands of e-commerce customers, differ vastly from those in traditional retail.
Forcing a retail WMS - whether it has been purpose-built or created by a third party - to adapt to e-commerce needs is a dangerous business. These legacy systems were not built for a diverse, fragmented digital reality. They were developed, largely, to support accurate replenishment between the warehouse and the store/s.
The need for dedicated warehouse management software
The difference isn’t a case of splitting hairs - it’s one of two different worlds. And these are two worlds that should be able to live in relative comfort with each other within the same warehouse. And they can, if the right WMS system - or mix of systems - is working to ensure that the business and consumer demands of both retail and e-commerce arms are always met.
That’s one of the central differences. Here are 8 more:
- Order management
the requirements around order management are changing as even the ‘purest’ pure play companies start to turn on new sales channels. Businesses aren’t just thinking about their owned sales channels anymore - both online and offline - but about third party marketplaces. Staying on top of all orders as they come in, wherever they come in from, is tricky without a dedicated WMS on hand to properly handle the order flow and inventory levels.
- Increased need for unique configurations
Health & Beauty retailers selling through their own website ship 3-5 items per order and the products are similar sizes. This means that, when each order comes in, there’s a need to pick specific orders into specific totes on a trolley. They also want to configure rules to print hazardous labels for some items.
Lifestyle Sports companies which sell, for example, surfboards and collating at the despatch bench. Some items will have to be despatched in multiple parcels and what goes in each should be tracked. Each order is different. Each order will have different requirements, so having a dedicated e-commerce WMS that can immediately determine these requirements on side closes the door to any mistakes that might slip through the net.
When legacy retail companies expand their reach into the e-commerce space, they’re going to have to deal with returns. The quick processing of each return isn’t something that a traditional retail WMS has been developed for. This is a process built within an e-commerce WMS; a process which captures real-time data and ensures that every item is trackable as soon as it reenters the warehouse.
- Personalisation of printed documentation
In retail, there’s no real need for the materials given to consumers to be personalised. The customer gets a receipt, a bag, and that’s about it. The level of personalisation required for e-commerce orders is far more complex, and may differ on a case-by-case basis. This is something that an e-commerce WMS is set up for, and a retail WMS isn’t.
The act of picking items for despatch differs when items are being sent to retail stores, and when they’re being sent to e-commerce consumers. Picking and despatching goods for retail is standardised. It isn’t for e-commerce; you must consider the weight of each package, the right carrier for each delivery, the packing materials required...add that with the need for optimised picking routes within the warehouse to speed up the fulfilment process and it should be clear that a WMS created to deal with these precise problems is a far better fit for an e-commerce warehouse than a retail WMS would be.
- Speed to market
If a company decides to stick by their retail WMS, adjustments will have to be made. The WMS will be reworked and rewired in order to make sense and be effective in an e-commerce space. Which takes time. Time that’s at a premium in a fast-moving sales environment. If speed to market is important, then on-premise, customised WMS solutions won’t make the grade.
- Handling peak demand
Peak demand in retail stores can, by and large, be predicted. Seasonality is more rigid in the physical world than it is in the digital sphere. Online, there can be expected and unexpected peaks. In either case, the warehouse must have a robust WMS in place to help the staff cope. An e-commerce WMS was built with this flexibility in mind.
- The way that goods are stored
Online consumers may choose to buy a variety of items across a mix of different categories. And it’s difficult to predict which orders will be coming in, and when. So rethinking the way that goods are stored can help. Instead of storing all items of a particular type in the same place, think about chaotic storage techniques. This is something that an e-commerce WMS helps you to manage.
These are 8 differences. There are many, many more. One of the main things for legacy retailers, and enterprise companies, looking to improve their online imprint to remember is that e-commerce isn’t an add-on to the existing operation. It’s a unique entity in its own right.
What works for retail likely won’t work for e-commerce, so taking some time to determine which dedicated systems will help the e-commerce division to flourish is an incredibly worthwhile thing to do.