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The Internet Revolution

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INTRODUCTION "The economics of information in the 1990s permanently altered the traditional linear supply chain of sources, manufactures, distributors, retailers, and customers...via the Web" (Pyne 2000, p1). With the emergence of the internet over the past fifteen years, the supply chains for e-retailers have evolved in a similar fashion to the industrial revolution. Unlike traditional brick and mortar retailers, e-retailers supply chains include the front-end interaction, the consumers themselves (Cucuzza and Cherian, 2001). Therefore, it is essential that e-retailers ensure a smooth integration of information between the front-end users and the back-end support functions. To be successful, e-retailers need to provide an efficient marketing strategy to understand the customer buying requirements, and to be able to address them. The role of technology has allowed e-retailers the ability to collect and analyze personal trends of their consumers, although at a possible personal infringement of their cliental. In addition, as superb the front-end model may be, many companies fail today due to insufficiently integrating and ensuring a back-end support function is in place to provide efficient and timely delivery to consumers. This paper will address the e-retailer supply chain addressing both spectrums -- the consumer relationship management and the supply chain management. Moreover, this paper will also draw upon various companies' strategic internet successes as examples. The Beginnings of the Internet Revolution Similar to the Industrial Revolution, where growth was predominately spurred by standardized mechanical interfaces, breaking down procedures into many mini-procedures (Fordism), the Internet Revolution is "being stimulated by the standardization of interchangeable business processes" (Cucuzza and Cherian 2001, p.3). The interchangeable business processes are the digital interfaces between e-business tools and the internet. These tools are derived from the improvements in technology, from the storage of digital data to digital information (Cucuzza and Cherian 2001). E-Business The buzzword 'E-business' has emerged as a new strategic initiative for companies to pursue. E-business can be defined as buying and selling over digital media, and "includes both front- and back-office applications... ...read more.


It is therefore essential that e-retailers seek means to ensure customers return to their websites. The key factors are "efficiency, personalization, socialization, and the look and feel of the site" (Agrawal and Singh, p.1537). Although, this may indicate that they may infringe on consumer privacy rights, they have used technology to their benefit to obtain information that is beneficial in making strategic decisions. However, having a strong front-end website does not guarantee success. Once the consumer initiates the first step by purchasing a product, the actual delivery of goods becomes just as important in the supply chain. Back-end System Support Once the e-retailer obtains a client, it is essential that they provide an efficient back-end system that will ensure availability, workable ordering website, and delivery on-time. Accenture international research has indicated that 1 in 4 internet purchases fail due to various reasons (Agrawal and Singh, p.1549). In the traditional avenue of shopping, many consumers will not go back to a store if the ability to purchase items fails 25% of the time. Accenture has also stated that one of the most common reasons for this failure include that items are usually out of stock, which indicates that the front-end systems are not connected to the back-end support systems (Agrawal and Singh, p. 1549). A seamless integration of all systems, for example, implementing an Enterprise Resource System is required. This integration will allow the e-retailers to advise if the product is in stock, the expected delivery date, and substitute and compliment product availability. Moreover, systems that connect with vendors will advise the e-retailers if the products are in back-order, different characteristics of the product (size and colour) and delivery time. This connection of all information systems now provides the capability to consumers to select from a menu of shipping rates and schedules, and then be able to track the fulfillment of the order in real time. ...read more.


And when done so, it will be at an increased cost due to shipping and handling charges. In addition, it becomes a manual process for the e-retailer to retrieve the goods, ensure the product is in good shape, and then enter the return into the system. This is a costly procedure as it requires staff on hand to manually do this. Technology in the return policy and the e-retailers assurance to consumers to create an efficient process is a key for internet sales to become increasingly favourable. Conclusion The emergence of the internet and on-line shopping has developed a need to integrate all aspects of the supply chain management. With the usage of digital interfaces from the front-end spectrum of obtaining clients, to the back-end support system of ensuring the goods are available and delivering them on time - both the front and the back have now become one complete supply chain. Technological advancements have been used on both ends of the spectrum to ensure seamless integration, to promote to selective target markets, and to ensure customer satisfaction via back-end support efficiencies. The competitive market and the ability to utilize information technology as an advantage, e-retailers can now promote their products and services on a personal level through personal data collection and analysis on consumer behavior. Although, this has always been done on a collective, the personal promotion aspect is a new tool for marketers that some feel is an infringement on consumer rights. The understanding of consumer requirements for online purchasing is essential for the continual success of e-retailers. To be able to deliver goods on time, have sufficient stock available, provide a return policy similar to traditional shopping, and provide a safe and secure payment facility are the main issues consumers would like addressed. Managing these aspects of the supply chain, logistics, delivery, and sufficient stock levels have become the realized goal of e-retailers through the usage of information technology. The e-retailers that have been successful in addressing these issues by improving both ends of the spectrum have been able to succeed in a very competitive market. ...read more.

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