I noticed this post in NYTimes tech section while browsing through some regular technology news. I generally try to stay with hardware related articles, but this post suddenly tickled my hibernating brain (for last 1 week!). I could find some elements in there, highlighted distinctly in the MIT Sloan article on innovation [posted on Sep 19]. The NY article presented a relatively young online business pattern where e-customers can order online and then pick up their merchandise from a nearby brick-n-mortar retail store. Walmart has successfully implemented their Site to Store program that astonishingly reached high sales volume over a short period of time. You can find the detail [here].
I would like to talk a bit about the process innovation attached with this movement and how the ecosystem adapts and extends to a new shopping behavior. Nowadays, Best Buy, Circuit City, Staples and several other retailers have adopted this new model where people wouldn’t like to wait for the shipping time or pay the shipping cost for a product with comparable price in a retail site. On the other hand, the retail shelves do not have the vast online selection and often cannot support the inventory from the standpoint of storage and other logistic problems. However, this ‘click and pick’ trend just displays a business cycle and a ecosystem dependence that alters amazingly.
- Let’s talk about shipping. When online business boomed years back, the logistic and delivery companies such as UPS and FEDEX observed a multi fold growth in their revenue. Small to mid ticket shipping became a household norm and the whole delivery dynamic exploded. Now, if click and pick catches up big time and the big giants push it vigorously, there will be a distinct adjustment in the logistic business to accommodate any drop in the projected revenue. An ecosystem adjustment!
- Inventory control will be a whole new ballgame. Since storage is often a big issue, replenishing the storage with ordered merchandise (online) will be a challenge. New workflows and logistic ideas will germinate to move the inventory dynamically or adjust the inventory based on forecast analytics.
- Will corporate warehouse be de-centralized? Be built at strategic locations?
These are just some of the implications that came to my mind. May be there will be more in the process chain as business comes of age around this concept. The ecosystem dependencies will also bear on any strategic e-commerce plans or tactical implementations. Ideas?