Bank of America Consumer & Retail Technology Conference: The Growing Importance of Drop Ship

CommerceHub

CommerceHub’s Chief Revenue Officer Tom Barone recently discussed the growing importance of the digital supply chain at this year’s Bank of America Consumer & Retail Technology Conference. If you missed it, we’re sharing some of the key highlights and takeaways here on the blog.

Drop-ship economics

The COVID-19 pandemic has changed consumer behavior and accelerated ecommerce growth. Ecommerce has spent the past year gaining a bigger share of the retail wallet while brick-and-mortar has slowed. While retailers struggled to keep up with capacity during the early days of the pandemic, many turned to drop ship to increase virtual inventory without needing warehouse space. Drop ship became a capital efficient way to continue to drive top-line revenue growth and protect the customer experience for many of the world’s leading retailers.

The CommerceHub network connects more than 15,000 retailers, brands and suppliers and powers over $30 billion in GMV, annually. Retailers and brands gain access via one centralized integration so they can strategically expand product assortment in key categories without taking on the inventory costs or requiring warehouse space to meet consumer demand. And, retailers gain the added ability to provide consumers with a seamless customer experience that still aligns with their brand promise.

4 key things CommerceHub does to support retailers and brands:

  1. We are a strategic growth partner. For many of the large retailers we work with, drop ship drives between 30%-70% of their total ecommerce revenue making CommerceHub an important business partner. 
  2. We help them deliver a great customer experience. To consumers, a drop-ship order is as seamless as directly from the retailer. Our network helps retailers improve fulfill rates, decrease the number of cancelled orders and ensure fast, on-time delivery.
  3. We help reduce costs. Retailers that rely on our drop-ship platform realize more efficiencies and gain visibilities that enable them to lower shipping costs by shipping items from suppliers that are closer to a customer’s location.
  4. We provide performance benchmarks and valuable trend data. We aggregate our network data to show performance benchmarks and provide best-in-class metric data like top selling categories, shipping time, inventory accuracy and fill rates. We see the evolution of trends and provide this information to retailers so they can capture incremental sales.

CommerceHub growth opportunities in 2021 and beyond

Between March and November 2020, we saw 80% growth in transaction volume and we expect continued growth in 2021 with ecommerce becoming more of a focal point for retailers and brands. We have plans to increase our focus on international markets, especially Europe. We are also focusing on B2B opportunities since there has been an accelerated shift to ecommerce in that market as well. Our plan is to continue to innovate and deliver capabilities that help our customers grow faster and compete better.

We pride ourselves on the value we provide to our customers and are focused on helping them to identify opportunities to expand product assortment in key categories, make connections to the right suppliers, provide them with access to additional sources of demand on marketplace channels and deliver significant return on investment—461% ROI in less than 3 months.

Contact us to learn more about how CommerceHub can help strengthen your digital supply chain.


About the Author

CommerceHub

CommerceHub is a leading ecommerce enablement platform connecting supply, demand and delivery that helps retailers and brands increase sales by expanding product assortments, promoting products on the channels that perform, and enabling rapid, on-time customer delivery. CommerceHub helps its robust network of thousands of retailers, brands, and distributors achieve over $30 billion in Gross Merchandise Value annually.