1: Bread in New Zealand is sold on a sale or return basis. The two major bread producers deliver bread into supermarkets, making sure the loaves are dated properly and in the right place on the shelves. If the bread hasn’t sold by a certain time, the remaining loaves are taken away. The returned product amounts to 15-18% of what goes in. The supermarkets are comfortable with this arrangement because it’s easier for them to handle it this way. Now imagine what would happen if a cashier’s price scanner could also place a forward order to a bakery when supplies were running low. There’s no reason why that couldn’t be done today. It’s neither difficult nor complicated, not even very sophisticated. In such a situation the supermarket might then choose to order bread rather than have it on sale or return. They might order, say, three days in advance. Now the baker can bake to order. The supermarket could then say, “Don’t bother delivering. We’ll place the orders in time for you to bake the bread and we’ll send a veggie truck around to pick up the order.
Such an arrangement, says Warren, would virtually put the bakers out of business. “Business is about managing risk, and the baker doesn’t have any risk any more. The baker used to sell a loaf for $1. Now it is worth 50c. Because there is no risk, there is no return.”
2: Imagine that you are operating a seafood delivery business. Right now you are only filling orders. But think what would happen if you could gain sales intelligence based on your access to previous orders. You might think that is not particularly sophisticated and you would be right. But imagine if the usual buyer is away and the second-in-charge has to take over. Does he know how to order wisely? Online sales intelligence could help him a lot. Even better, what if the sales intelligence built into the system could suggest orders based on stock and sales? That’s not hard to do at all.
3: Imagine you want to buy chrysanthemums for your store on Mother’s Day. Chrysanthemums sell well when they are flowering and look great. But what if the chrysanthemum grower hasn’t got enough flowering plants because of the recent bad weather? One thing’s for sure — he won’t send any of the plants in bud anywhere near the buyer’s head office. They’ll go somewhere out to the boondocks. Well, why not make sure the grower places a picture of a sample of a lovely flowering chrysanthemum next to the product description on the computer system the buyers use. Buyers could compare what they got with what they have. In the case of the late-flowering chrysanthemums they could go somewhere else.
Toby Warren likens e-commerce to a restaurant where people are free to talk to each other across the tables. They are all eating their individually tailored meals from the same source — the restaurant kitchen. When they start talking to each other they discover … synchronicity. They find they have a lot in common. When they like something they see on another person’s plate, they can ask the chef to prepare them a similar offering.
How does this compare to e-commerce? Well, says Warren, imagine that the chef is operating a database. All the people in the restaurant are dining off the same database. They can easily add a bit of someone else’s meal to their own plate.
“For example, we have a number of suppliers in Bluff who list their product in the Southfresh marketplace. But they also want to sell their products to a collection of people. So far we haven’t hooked many of them up but it is hugely possible for us to do so.”
Some would call that synchronicity, others would call it viral marketing.