Faculty & Leadership Blog / Faculty in the News

Managing expectations and inventory top challenges for online retailers says Babson Professor (MBA Crystal Ball)

Original article by Swati via MBA Crystal Ball

Effective supply chain management involves ensuring the smooth transition of products from manufacturing to the point of sales. In the case of retail supply chains, an efficient distribution system is crucial, in order to keep pace with the volume as well as the rapid movement of products in the retail industry.

Retail SCM management deals with how well you can control and efficiently manage the various processes – inventory planning, merchandise flow, logistics and customer services.

If juggling all that complexity wasn’t enough, traditinoal brick and mortar stores are now also facing the heat from online retailers.

Babson marketing professor, Lauren Beitelspacher, discusses the various aspects of marketing including how the internet era has brought about a transformation in the business environment.

Lauren has the honour of earning the ’best 40 under 40 professors’ award twice, the first one by the Birmingham Business Journal and then by Poets & Quants. Her contribution to marketing and retailing textbooks, her active involvement in the marketing community and her research papers that have won her awards, make her a well-respected expert in the field. Lauren’s research interest areas include buyer-supplier relationships, retail management, and the retail supply chain.

Q & A with Professor Lauren Beitelspacher

In conversation with MBA Crystal Ball


MBA Crystal Ball: How has the internet changed the traditional ways in which the retail supply chain was managed?Lauren: The internet has changed the face of consumer behaviour, retailing, and supply chain management. Consumers now have access to more information than ever before.Using online and mobile channels, consumers can now shop instantly to compare prices, features, deals, and service extras. This has changed how the retailer engages and communicates with the customer.

The biggest issue for retailer with the internet is managing inventory and delivery expectations.

The further the inventory is from the customer, the longer it will take for the customer to receive items. Today’s customer wants instant response and convenience.

MCB: What are currently the biggest challenges in retail supply chain management? How do these change based on business scale and geography?

Lauren: Obviously, smaller stores face larger supply chain hurdles because they don’t have the infrastructure to support large orders, shipping, delivery, or inventory management.

Larger retailers have unique challenges as well, in that the customer expects more of them and they have to manage a larger, more complex web of logistics, transportation, and storage.

MCB: Can you recommend some low-cost marketing techniques that B2B start-ups can use?

Lauren: B2B businesses need to invest first and foremost in personal selling. For B2B ventures, advertising is often quite challenging.

It is more important, in my opinion, for B2B companies to invest in networking, building relationships, and delivering on promises.

MCB: How effective is social media for B2B marketers?

Lauren: Social media can be a great tool for B2B marketers if it is used effectively. It is a great way for brands to stay current and respond quickly to customer comments or concerns.

Social media can also be used to disseminate information quickly. B2B companies can also use social media to help craft their brand story throughout the supply chain.

MCB: How can small offline retailers tackle the growing competition from online retail ventures?

Lauren: Customers value convenience and experiences. Many online retailers offer convenience, so smaller, offline retailers should try to find ways to provide customers with a unique experience.

This could be investing in customer service or creating a unique shopping experience that is difficult to duplicate online.

Consumers play a very active role in today’s retail supply chain and other businesses. Earlier, buyers would have to choose from what a store had to offer. Today, buyers are in a position to compare prices for the product of their choice, access customer feedback and evaluate their choices before making a purchasing decision.

As Professor Beitelspacher says, the focus has to be on creating a positive customer experience.

The table below lists down the key factors that contribute to the consumers’ value-for-money perception while making their purchase-related decisions.

Factors affecting value for money