The Omnichannel Supply Chain: Traditional VS E-Business

There is no denying that things have changed in the last two to three years. Aside from COVID and the disruptions, the nature of business and commerce has changed. More companies and businesses are moving from traditional brick-and-mortar buildings to online e-business platforms. This leads to the need for omnichannel supply chains, and omnichannel e-commerce options have never been more vital for smooth digitization and automation. Read on why working with an omnichannel 3PL company is the best option to grow your e-commerce business. 

E-Business vs Traditional Brick & Mortar

In the current world of fast-growing, innovative technology, change is inevitable. It is sometimes challenging to keep up with all the new, highly impactful technology released over time. Despite the changes within individual technology, changes are also happening on a bigger scale. The very nature of many businesses has changed with the increasing popularity of E-commerce. This shift is driving the need for omnichannel 3PL company partnerships throughout the industry. 

According to Shopify’s Future of Commerce report, 53% of retailers are adopting tools to help them sell in various channels. Shopify’s survey also found the biggest challenge among 49% of respondents for brands that want to implement an omnichannel strategy is “breaking down organizational silos between digital and physical stores.” Another 47% say integrating online and retail store data and operations will “prove difficult.” 

E-commerce has allowed businesses to massively improve their lead times. In addition, performance for E-commerce businesses has been achieved at a much better rate than traditional businesses. Due to these results, it is no surprise that many companies are switching their nature/structure from traditional business modes in favor of a more omnichannel supply chain-based approach. While online service and outsourced fulfillment partnerships are not new they are becoming more mainstream, especially as recovery and growth continue. 

E-Business/E-Commerce

According to Kaur (2021), E-business practices relate to businesses that include activities through the

According to Kaur (2021), e-business practices relate to businesses that include activities through the Internet. Business activities include (but are not limited to) industry, commerce, and trade. Managing omnichannel 3PL companies , omnichannel fulfillment, and e-commerce service providers also includes many nuanced aspects. 

These include planning, organizing, production, marketing, and more, all through the internet. Most people and business parties do their activities electronically. These emerging modes of business are driven by omnichannel e-commerce, digitalization, and automation. The goal is to improve business strategies and performance while offering customers a seamless experience while doing business with any individual company or location. 

In e-commerce, goods can be purchased 24/7. This gives customers around the globe a massive advantage as there are no restrictions regarding opening/business hours and time differences. This change alone massively increases a business’ potential customer pool, resulting in many traditional businesses incorporating this aspect of e-business.  Omnichannel 3PL company services provide more significant benefits in buying goods and services quickly with cross-border service opportunities (Thakur, 2021).

Traditional Business

The traditional business primarily refers to a physical instance (e.g., shops/stores) that provides a specific good/service to its local customers in exchange for the corresponding currency. Traditionally, businesses have operated solely on a cash-based business model. Even as the popularity of credit cards has grown, cash is still preferred at brick-and-mortar shops. However, that is not an option online and has pushed businesses to adapt to cashless and digital payment processes.  Omnichannel supply chain reworking is part of today’s growth and recovery process for industries across the board.

Operating costs are usually relatively high as it takes a lot of investment to keep a physical place running correctly. e-businesses do not need to hold a physical unit, giving them freedom (Kaur, 2021). Furthermore, traditional commerce started at the time of the barter system, which was introduced long ago. 

This system covers the essential supply and demand principle. The exchange of goods for other goods is the foundation of any business model. And it does this without the introduction of money (as this was not introduced yet in the early times). All e-commerce businesses need to improve traditional approaches. Embracing automation and digitalization is essential for all e-commerce companies.

Nowadays, businesses have advanced to a more modern model with the element of cash and physical instances being more flashed out. The introduction of e-commerce in the early 20th century decreased the popularity of brick-and-mortar stores in favor of an omnichannel e-commerce approach with online stores, platforms, and e-commerce websites (Thakur, 2021).

Benefit E-Business

As mentioned before, the introduction of e-businesses has forced many companies to change their core business model due to the immense benefits yielded when doing so, including the below benefits. (Faris, 2019)

Decreased Startup Costs

Starting a new business often comes with high initial investment costs. This is especially true when starting a brick-and-mortar retail store. Think about money needed for furniture/displays/thematic elements/personnel/customer care/office space etc. If your business is starting to gain traction, you also need to think about upgrading and including a conference room.

Location Freedom and Flexibility 

People can start E-businesses from anywhere they would like to, so to speak. The necessary requirement of a website is an investment, but a much lower investment compared to a Traditional Business. 

Shipping and warehousing are also part of your primary initial investment as the network needs to be robust when starting to avoid initial complications and delays. Partnering with experienced omnichannel 3PL company experts can help speed up the process and make it easier to get started when and where business owners want and need.

Easier Staffing 

If you have a traditional business, a lot more staff is required when wanting to manage your business effectively. You need people for HR/administrative reasons, logistical reasoning, customer services, etc. 

M-commerce businesses need only a few people to start merely for managing orders, as much can be done online. Startups often outsource their whole supply chain/operating channel to other companies that work in Ecommerce Fulfillment from start to finish. This gives E-Businesses immense leeway regarding resource management.

Transparency in Omnichannel Operations

Omnichannel supply chain operations are a challenge for both traditional businesses and e-businesses. The critical difference is that e-businesses gain the advantage of clarity by being able to manage and overview all the step-by-step operations online. This can often reduce lead times by a significant amount. Shipping and transportation logistics plays a huge role in traditional commerce and e-commerce balance.

Partner With Omnichannel 3PL Company Experts Today

Businesses that conduct e-business should also consider outsourcing their shipping logistics and CRM needs to professional third-party industry experts. These experts often handle the whole fulfillment process very efficiently.. See how omnichannel 3PL company services and omnichannel supply chain operations impact traditional and e-business models today in real time by choosing ModusLink. Contact ModusLink today to learn more about omnichannel e-commerce opportunities and how your team can apply better e-business practices today.

Bibliography

Shopify, (2021, September 27) Future of Retail Accessed October 17, 2022 From https://www.shopify.com/research/future-of-commerce/future-of-retail

F. (2021, February 4). Updates, Insights, and News from FutureLearn | Online Learning for You. FutureLearn. Retrieved December 10, 2021, from https://www.futurelearn.com/info/courses/digital-transformation-e-commerce/0/steps/186161

Faris, S. (2019, March 16). Traditional Business Vs. E-Business. Small Business – Chron.Com. Retrieved December 10, 2021, from https://smallbusiness.chron.com/traditional-business-vs-ebusiness-12563.html

GeeksforGeeks. (2021, August 5). Difference between Traditional Commerce and E-commerce. Retrieved December 9, 2021, from https://www.geeksforgeeks.org/difference-between-traditional-commerce-and-e-commerce/

Kaur, A. (2021, July 10). Difference between E-business and Traditional business. Tutor’s Tips. Retrieved December 9, 2021, from https://tutorstips.com/difference-between-e-business-and-traditional-business/

Thakur, M. (2021, July 10). E-commerce vs Traditional commerce. EDUCBA. Retrieved December 9, 2021, from https://www.educba.com/e-commerce-vs-traditional-commerce/