Companies stalled on the road to full e-commerce implementation

More than 60 percent of companies have yet to fully implement their e-commerce strategies despite recognizing the importance of doing so, according to a DHL Supply Chain study released Tuesday.

The study, "The E-Commerce Supply Chain: Overcoming Growing Pains," surveyed more than 900 decision makers responsible for logistics or supply chain management and e-commerce from all major industry sectors, including retail, consumer goods, life sciences, high-tech, automotive, engineering, and manufacturing. Researchers found that 70 percent of business-to-consumer companies and 60 percent of business-to-business companies are still working toward full implementation of their e-commerce strategies even though 70 percent overall rated e-commerce as "very important" or "extremely important" to their business.

Keeping pace with fast-changing customer demands is one of the biggest challenges companies face in managing those e-commerce strategies, the study authors said.

"E-commerce is a primary driver of business growth. Companies know they can no longer afford to operate without a comprehensive omnichannel strategy that develops a deep personal relationship with each individual customer, but many are at a loss for how to continue to keep up with customer demands," Jim Gehr, president, retail, DHL Supply Chain, North America said in a statement announcing the findings. "Both B2B (61 percent) and B2C (65 percent) respondents rated e-commerce as having the biggest effect on customer retention and satisfaction, and the number is only expected to increase in the next [three to five] years. That is why it is mission critical for supply chains to provide greater predictability, flexibility, and speed to continuously maximize service levels."

The study also found that B2C companies' e-commerce offerings have caught up to their B2B counterparts, and that both groups are beginning to implement hybrid approaches to e-commerce distribution and fulfillment that involve both in-house and outsourced methods. The study showed that:

• Because of the complexity of e-commerce, many respondents (47 percent) are adopting (or planning to adopt) a hybrid insource/outsource strategy.
  • The majority of B2C (65 percent) and B2B (73 percent) businesses are using two or more different distribution methods in tandem. In the next three to five years, more than 50 percent of businesses will be making some type of change to their distribution strategy, the researchers said.
  • Only 34 percent of B2C and 36 percent of B2B respondents expect to fulfill online orders solely by in-house methods in the next three to five years.
• Both B2C (57 percent) and B2B (53 percent) respondents rated customer service as "extremely important" for the online purchase experience. This puts extra pressure on the important facets that contribute to this measure, such as on-time delivery and product availability, the researchers said.