Issue link: https://www.e-digitaleditions.com/i/919877
46 FEDA News & Views oftentimes do not have the product breadth, depth, and width of traditional distribution, but this has not slowed down the end user in using their services. Take a look at Exhibit I, which lists a few common omnichannel firms and their attributes. By no means is the list exhaustive, as there are new supply chain entrants that are outside of our research and consulting. What's important to note, however, is all of the new entrants do things differently than their full-service rivals. First listed, in the exhibit is the full-service distribution firm with brick-and-mortar branches and significant numbers of outside and inside sellers. There is a growing list of full- service firms that build out a competitive online software platform. However, many have trouble moving customers online to any great extent. Why? Software costs often run into seven figures and added to the full-service firm, the distributor is forced to increase prices. This is the exact opposite of what supply-chain digitalization is supposed to do—and does successfully in newer entrants. The goal is to reduce the cost of the supply chain while making it more convenient to complete a transaction. Next up are Segmented Online Firms and segment platforms. The segmented online firm uses well-defined market segments to shape the digital experience. An example is WebstaurantStore.com, which uses segment definitions of business types such as bakery, coffee shop, pizza parlor, etc. These definitions give the user a more customized feel and save search time by listing common product categories specific to usage in the business. Segment overlays take work in site design but can be very effective. Despite their straight- forward appeal, they remain rare in traditional distribution sectors. Furthering the use of segments in site design and online strategy are segment platforms. These business models use a thin slice of traditional segments. For instance, Zoro tool serves an MRO segment of small, infrequent buyers that want a broad selection and competitive price. It is a division OPERATIONS Model Definition Pros Full-Service Firm Existing brick-and-mortar Easy to complete firm online You don't have to think too hard Segmented Models Segment overlay to full-firm Appeals to individual Full-Firm w/Segments offerings segments-easy to navigate and appeal is high Segment Platforms Thin-slice segments that are Transactional platform elements Thin-Slice Segments stand-alone entities but often with reduced operating expenses backed by a larger company and a great price, plus immediate appeal to granular segment Enhance Channel Firms who use technology and Value appeal is strong, difficult to Value value mapping to rearrange the copy, ROS and top line growth is value proposition and offer better good. These are easy share gains value for the buck against full-service competition Slice of the Value Chain Firms who offer a service or narrow Unique business models that, definition of a product market once completed, can be "blown" for a percentage or reduced fee. across large market areas. Often a Marketplaces, asset management lengthy process to become and professional services self-sufficient. sites are example. DISTRIBUTION CHANNEL E-COMMERCE