How well integrated are your front-end and back-end systems?
Best Buy sold lots of electronics on-line during the 2011 holiday season, but could not fulfill all
those orders. (December 2011 revenue $8.4 billion). The reason? Botched inventory management (Bogenrief, 2012). Customers were further angered when they were told of this shortage just one week before Christmas. Sorry kids, the elves couldn't build all the Wii's that Santa promised. That kind of disappointment leaves a lasting impression on shoppers. It's no wonder Best Buy is considered a takeover target.
This year they plan to make sure that orders can be filled within 14 days by
- limiting the number of backorders
- automatically canceling backorders that are not fulfilled within 14 days
- flagging sold out items more quickly on their website
- enabling in-store pickup for on-line orders
- doubling the size of distribution centers
- improved communications with customers using email and messaging
However, they cannot guarantee delivery if you order on-line. This is clear evidence that there is poor coordination between the front-end and back-end systems.
Does your e-commerce site track inventory in the warehouse or on-order from suppliers? Can it guarantee delivery when an order is placed? Does it effectively integrate the back end supply with the front end sales? Santa's sleigh is counting on it.
Bogenrief, Margaret. Three Areas Where Best Buy Screwed Up. January 9, 2012. http://articles.businessinsider.com/2012-01-09/markets/30606078_1_retailer-amazon-revenue