A clear trend is emerging in the do-it-yourself (DIY) sector: DIY stores are increasingly relying on dropshipping and outsourcing most of their e-commerce fulfilment to their suppliers. They must now find ways to efficiently fulfil the additional B2C process requirements of their customers. The best way for them to do this is to automate their dropshipping processes or at least support them with technology for the most part. However, with inflexible ERP systems, this is easier said than done. However, it can still be achieved with the help of cloud-based solutions.
Sales growth in e-commerce has been at a high level for several years now. During the pandemic at the latest, many consumers have learnt to appreciate the benefits of online shopping and regard digital sales channels as a matter of course, even after the restrictions have been lifted. Gross sales of goods in e-commerce rose to €99.1 billion in 2021 as a whole after €83.3 billion in 2020. This corresponds to growth of 19 per cent compared to the previous year.
In this rapidly growing market, well-known DIY chains such as Obi, Hornbach, Bauhaus & Co. are increasingly looking for opportunities to further expand their product range in the online shop. Dropshipping has proven to be an attractive form of business for DIY retailers in particular.
In dropshipping, the retailer does not have the goods in stock itself, but merely acts as an intermediary between the end customer and the supplier. In other words, the retailer has no physical contact with the products, but only takes care of order acceptance and invoicing. Order processing, storage, dispatch to the end customer and returns management are handled by the suppliers.
When suppliers fail due to technical hurdles
Drop shipping has many advantages for DIY stores: not only do they save on the costs of warehousing and shipping heavy and bulky DIY products, but they can also reduce the sales risk. However, things are not quite so rosy on the supplier side: As the classic B2B forward business is now being supplemented by a B2C component, suppliers are suddenly finding themselves increasingly confronted with extremely complex and difficult to manage processes.
It is true that most suppliers have an ERP system that can already control many processes. However, the process characteristics of retailers are so diverse that standard software is by no means enough. In addition to automated processes via EDI and the integration of APIs, unstructured processes, such as orders and cancellation requests by email, must also be able to be fulfilled in the small-scale e-commerce business. The problem is that the standard ERP solutions from SAP, Microsoft, etc. used by suppliers are usually not very flexible due to their predefined functionalities. Expanding ERP systems is usually associated with high costs and can only be realised with compromises.
However, one thing is clear: the manual processing of repetitive dropshipment processes is extremely inefficient and should not be a long-term solution. Monotonous activities such as manual order entry or the creation of stock lists not only have a negative impact on employee motivation, but also harbour a certain susceptibility to errors. In addition, they are very time-consuming and tie up human resources that are then lacking elsewhere. Without the appropriate technical support, the supplier is doomed to failure in drop shipments.
The cloud-based solution: CONCETO dropshipping
In order to master all these challenges in e-commerce fulfilment economically, DIY suppliers need to reposition themselves digitally. Future-oriented, open solutions that optimally support e-commerce processing and the implementation of suitable digitalisation strategies are in demand in drop shipping. The CIS/4-Cloud- Dropshipping represents: In addition to ERP, it enables the supplier to technically support individual or several components in the dropshipping process or to fulfil them completely automatically. These include, among others:
- Order acceptance
- Order processing
- Returns management
- Cancellation management
- Synchronisation of stock lists
As part of the CONCETO Integration Suite for Cloud (CIS/4-Cloud), dropshipping is developed on the basis of the highly integrative and customisable cloud software SAP Business Technology Platform (SAP BTP) and Microsoft Azure. It includes both the intelligent integration and orchestration of processes as well as a user-friendly interface for users.
In contrast to applications that are connected via an interface, CIS/4 Cloud dropshipping offers the combination of integration intelligence and application on the foundation of a digital platform. However, it is not a classic shop solution like Magento or Salesforce Commerce Cloud. As a central working platform for e-commerce processing, it is used to manage sales processes in collaboration with retailers.
What exactly does this look like in practice?
This always depends on the individual requirements of the supplier and its customers. To pick out just two typical scenarios from the multitude of possibilities:
For example, if orders arrive in PDF format, CIS/4 Cloud - Dropshipping makes it possible to have the order entry screen filled in by a scan tool. The clerk would then only have to check the data, make minimal changes if necessary and process it in the direction of the ERP. In the same way, CIS/4 cloud dropshipping can greatly simplify the process of creating stock lists, as the employee no longer has to manually merge the data from several Excel spreadsheets, but can simply generate an Excel copy in the format required by the customer at the touch of a button.
Automated dropshipping processes: A clear competitive advantage
The dovetailing of preconceived ERP functions with new, cloud-based solutions therefore enables DIY suppliers to control their sales processes by mapping individual customer workflows and controlling them technologically as far as possible. As CONCETO Dropshipping supports suppliers in the planning, execution and control of their sales processes in a fully or partially automated manner, it significantly reduces process complexity and ensures competitiveness in a rapidly growing market.
To ensure that DIY suppliers are also equipped for further growth in the future and can open up new sales channels without any hurdles, the solution also offers reusable process components. For example, templates can be adopted for your own B2C order fulfilment or for collaboration with other retail companies.
By automating processes, CIS/4 Cloud Dropshipping also creates the basis for optimised customer support. As the supplier has access to relevant information in a bundled form, it can meet the retailer's requirements with a customised service provision and offer a particularly good service. This in turn leads to a convincing customer experience and close customer loyalty.
Last but not least, every single one of the supplier's employees benefits from the standardisation and harmonisation of work processes. For clerks, warehouse staff and dispatch personnel, automation means an enormous reduction in workload, as manual process steps are largely eliminated. This means that they finally have enough time to concentrate on the really important tasks.
