Electronic Retailer - October 2012 - 31

GUEST VIEWPOINT

BY AYAL LATZ

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Finding Value in a Simple Back-End Setup
Starting up a new direct-to-consumer campaign is a challenging and complex task for both beginners and experienced marketers alike. In this article, we address a growing industry trend that offers process improvements for the start-up campaign. Narrowly speaking, as the title to this article implies, this applies to a new product and campaign that will be in the test mode initially. The product can be from an existing, established company or a product from a company new to DRTV. More broadly, the strategies in this article also apply to start-up companies, as well as companies looking to outsource many back-end functions, possibly for the first time. In these situations. the marketer stands to benefit from many of the same strategies. Currently, there are three major options for marketers to use. First, the marketer can choose all the suppliers to the campaign in an a la carte manner. In this model, there will be multiple contacts, multiple negotiations, multiple contracts and multiple vendors to manage. The pros to this approach: maximum control over every aspect of the back-end campaign functions, a high degree of flexibility to make vendor changes, possibly lower cost (assuming that in each negotiation the minimum price can be achieved). The cons to this approach: a high degree of complexity to create the program, many vendors to manage and potentially multiple service minimums to achieve. Second, the polar opposite approach can be used. In this program, one key vendor will bundle most of the back-end functions into one proposal. The pros to this approach: simple negotiations with a limited number of vendors, less management time to set up and manage, and streamlined integration burden. The cons to this approach: less flexibility for

a marketer in choosing vendors and possible higher prices. Third, some combination of the above approaches will result in a status that delivers some of the pros and some of the cons. Today, many marketers fall into this approach as they struggle to find the optimum balance between the first two strategies. The latest trend in efficiency is a bundled model featuring many of the services required to assist the marketer with a launch of a new campaign test at a low, fixed cost. These all-inclusive packages make it easy for a marketer to get started. Multiple services under one roof provide simplicity and, typically, the bundle of services is offered at one low, easy-to-understand price, making it very easy for the marketer to budget for back-end expenses. The success of this trend is due to the value of simplicity. Simplicity means that the marketer will spend less time and energy selecting and managing vendors. Set-up is greatly streamlined because either fewer vendors are involved or

they are already pre-integrated. Cost and risk are reduced because of the efficiencies gained. Fulfillment is at the center of and the driving force behind this trend. Why? The answer is simple. Fulfillment is the one back-end function that commonly touches and manages most of the other back-end functions, including order management, warehousing, kitting, fulfillment, shipping, customer service and returns. Additionally, the fulfillment center’s order management technology, whether homegrown or established through a specialized vendor/partner, integrates additional partners and functions, such as the shopping cart and inbounds call centers, and also facilitates payment processing and reporting. Each of the other functions relate to some of the players, but only fulfillment relates to them all. The objective is to create a bundle of services and a bundled price that make it a no-brainer decision for the marketer. With comprehensive services, an experienced fulfillment partner to 31

October 2012 | electronicRETAILER



Electronic Retailer - October 2012

Table of Contents for the Digital Edition of Electronic Retailer - October 2012

Calendar of Events
Your Association, Your Bottom Line
Industry Reports
FTC Forum
IMS Retail Rankings
Jordan Whitney’s Top Categories
Ask the Expert
From the Executive’s Desk
It’s All About the Numbers
Media Attribution Goes Mobile
Marketing to Teens: Not All Fun and Games
Guest Viewpoint
Guest Viewpoint
DRTV
Teleservices
Fulfillment
Member Spotlight
Bulletin Board
Advertiser Index
Classifieds
Rick Petry
Electronic Retailer - October 2012 - cover1
Electronic Retailer - October 2012 - cover2
Electronic Retailer - October 2012 - 3
Electronic Retailer - October 2012 - 4
Electronic Retailer - October 2012 - 5
Electronic Retailer - October 2012 - 6
Electronic Retailer - October 2012 - Calendar of Events
Electronic Retailer - October 2012 - Your Association, Your Bottom Line
Electronic Retailer - October 2012 - 9
Electronic Retailer - October 2012 - Industry Reports
Electronic Retailer - October 2012 - 11
Electronic Retailer - October 2012 - FTC Forum
Electronic Retailer - October 2012 - 13
Electronic Retailer - October 2012 - IMS Retail Rankings
Electronic Retailer - October 2012 - 15
Electronic Retailer - October 2012 - Jordan Whitney’s Top Categories
Electronic Retailer - October 2012 - 17
Electronic Retailer - October 2012 - Ask the Expert
Electronic Retailer - October 2012 - From the Executive’s Desk
Electronic Retailer - October 2012 - It’s All About the Numbers
Electronic Retailer - October 2012 - 21
Electronic Retailer - October 2012 - 22
Electronic Retailer - October 2012 - 23
Electronic Retailer - October 2012 - Media Attribution Goes Mobile
Electronic Retailer - October 2012 - 25
Electronic Retailer - October 2012 - 26
Electronic Retailer - October 2012 - 27
Electronic Retailer - October 2012 - Marketing to Teens: Not All Fun and Games
Electronic Retailer - October 2012 - 29
Electronic Retailer - October 2012 - 30
Electronic Retailer - October 2012 - Guest Viewpoint
Electronic Retailer - October 2012 - 32
Electronic Retailer - October 2012 - Guest Viewpoint
Electronic Retailer - October 2012 - 34
Electronic Retailer - October 2012 - 35
Electronic Retailer - October 2012 - 36
Electronic Retailer - October 2012 - DRTV
Electronic Retailer - October 2012 - Teleservices
Electronic Retailer - October 2012 - Fulfillment
Electronic Retailer - October 2012 - Member Spotlight
Electronic Retailer - October 2012 - 41
Electronic Retailer - October 2012 - 42
Electronic Retailer - October 2012 - Advertiser Index
Electronic Retailer - October 2012 - Classifieds
Electronic Retailer - October 2012 - 45
Electronic Retailer - October 2012 - Rick Petry
Electronic Retailer - October 2012 - cover3
Electronic Retailer - October 2012 - cover4
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