eCommerce companies around the world saw their sales skyrocket during the pandemic as people trapped in lockdowns turned to online shopping for basic goods. However, the economic turmoil and closed international borders caused by the pandemic severely disrupted supply chains globally.
These unprecedented issues created a ripple effect that placed enormous strain on the usually invisible manufacturing, transportation, and logistics pathways which caused businesses to struggle fulfilling orders.
Thus far, as we enter a post-Pandemic world, many things are not expected to change. The World Economic Forum has even proclaimed that COVID-19 most likely changed the supply change forever.
To ease these challenges, James Dong, the CEO of Alibaba-owned Lazada, told CNBC Business News that eCommerce businesses need to work with traditional retailers.
At the Singapore Exchange (SGX), Dong described how joining forces with traditional retail players was key to addressing Lazada’s delivery issues.
“…You have a rising number [of] grocery orders and consumers want to really get it in time, and they want to get it fresh, mint condition,” he said.
“…We had a partnership deal with Masan group in Vietnam. They have a lot of offline stores, grocery stores, and we work with them [to] deliver from their store to the consumers.”
He believes the pandemic accelerated ecommerce brands and traditional retail partnerships. “We realized nobody can serve all the needs that consumers have. So, it’s better that we join forces, put all our strengths together and then we can serve them,” he added.
Why Your eCommerce Businesses Need Traditional Retail Partners
As the world increasingly moves online, eCommerce businesses must adapt or face extinction. One way your businesses can stay relevant is by partnering with retail brands.
Before COVID-19, few eCommerce brands had retail partnerships. As a result, most eCommerce businesses balked at the counterintuitive idea, but Jonathan Tisch, CEO of Loews Hotels, says the practice was an effective way to optimize their eCommerce strategy.
Aside from easing challenges caused by the global supply chain crisis, retail partnerships offer your customers more choices in their purchase options. This can help capture an additional 1 to 2 percent conversion rate on visitor traffic that would usually bounce off your website.
Retail partnerships also provide eCommerce businesses with a brick-and-mortar presence, which can be crucial for attracting new customers and building brand awareness.
Offering your products for sale through a physical retailer puts them in front of people who might not have otherwise considered trying your products, which can help bring you more loyal customers.
In addition, retail partners can provide valuable insights into customer behavior and preferences. This information can be used to improve your eCommerce business’s website and overall customer experience.
The Challenges of Retail Partnerships for eCommerce Businesses
Although eCommerce businesses will undoubtedly need retail partnerships to survive in today’s unpredictable business landscape, there are challenges to address before signing into one.
There’s the question of logistics. Retailers want to partner with eCommerce businesses with an efficient fulfillment process that can handle large volumes of orders and returns. You also need to be able to store inventory in a way that is convenient for retailers.
Likewise, retailers have their own concerns when it comes to partnering with eCommerce businesses. They need to be able to trust that the eCommerce business will send them quality products and handle customer service issues in a timely manner.
They also want to be sure that the eCommerce business is taking steps to prevent fraud.
eCommerce business partnerships with traditional retail players will be the key to success in the post-pandemic world. These relationships provide essential resources and networks to help your online business expand its reach and grow its sales.
While some may view these partnerships as a threat to their independence, the reality is that they can be mutually beneficial for both parties. Retailers can gain access to new customer bases and cutting-edge technologies, while your eCommerce businesses can benefit from the retailers’ established infrastructure and expertise.
In today’s competitive and unpredictable business landscape, having a strong traditional retail partner can make all the difference for your eCommerce business.
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