Sunday, March 27, 2011

Advantages of Cloud Computing– Part XXI – Integrated Marketing

Cloud Computing isn’t just about putting everything you have on the Internet. Having your data and programs integrated at one secure, remote site, allowing trading partners operating on the same computer to integrate their data and processes with yours is the payoff. Since transactions are occurring in real-time, it provides a common thread - running through manufactures, your suppliers, you and your consumers who acquire inventory through your retail locations.  This is an enormous advantage because it eliminates the disparity between systems and allows trading partners to operate as one, cohesive unit.

As long as the wall of disparity exists between you and your suppliers, you will never be able to accomplish this. Cloud Computing is the major step toward operating your business in ‘real-time’. We understand how never having the ability to do that makes it difficult to envision how it will work.

When a customer buys an item in your store, the sale of that single item has an immediate impact on your store AND the company that is providing you with your inventory. If the data regarding that sale is shared with your supplier, one of your supplier’s advantages is their ability to forecasts future needs, and this in turn insures your customers will always find the products they need at the precise time they are ready-to-buy. But that’s not all. By helping your suppliers reduce their costs, it makes it possible for them to sell to you at deeper discounts. Walmart figured this out in 1986 when they launched Retail Link and that’s the major reason why they can sell some products cheaper than you can buy them.

Now it’s easy to say, ‘Well that’s Walmart. They have this big company and all those stores and all. I could never hope to compete with Walmart.’ Well, you’re doing it now, aren’t you? Every time your customer buys something in your store, he or she is not getting it from Walmart, are they?

However, Walmart’s recently reported ‘out-of-stocks’ proves there is a flaw in Retail Link. It also creates an opportunity for you to do better.  This is precisely how smaller competitors gain strategic advantages over larger competitors. This window of opportunity will only be available for a short time, and if you want to take advantage of it you have to move quickly.

 You and Walmart are already in a business relationship to provide products to common customers. My wife loves Diet Sunkist Orange. Walmart is out of it half the time she goes there. She remedied her problem by purchasing twice the amount she needs when it’s available. I have often wondered how many sales Walmart misses when they are out of stock.

A recent survey showed that consumers are moving more into a ‘just-in-time’ mode, preferring to buy just what they need for the short term. Could this be another reason why Walmart’s sales are down in the United States? You bet it is. And who are the benefactors? The smaller retailers who are geared more toward convenience item sales. When consumers buy less from Walmart, they are buying more from somebody else, and if they are buying more from you, you should be doing something to insure they’ll become repeat customers.


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