Influencer marketing and e-commerce : complete guide

92% of consumers trust influencers' recommendations more than the brands themselves (source: Nielsen). To gain the trust of their target audience (as well as credibility and authenticity), e-commerce sites have every interest in relying on this lever. This is known as word-of-mouth 2.0 or influencer marketing.

The aim for e-tailers is to forge partnerships with influencers, who can then promote their products online, particularly on their social networks. Interested in influencer marketing? Follow the guide and find out everything you need to know about influencer marketing in e-commerce.

What is influencer marketing in e-commerce?

Influence and influencer marketing: definitions

At the heart of the concept of influencer marketing lies that of the influencer. An influencer is a person who, through his or her notoriety and media exposure, has great power to influence public opinion and consumers. Now recognized as a profession, influencers create content for their audience. This content is often created in partnership with e-retail brands, to promote their products or services. When a brand chooses to work with an influencer, it implements an influencer marketing strategy.

Influencer marketing is a type of marketing based on a partnership between a company and an opinion leader (influencer). The aim is to promote a brand, product or service through content created on social networks.

Before choosing an influencer with whom to collaborate, the brand needs to decide :

• • The type of influencer: some public figures have a small, engaged audience of less than 5,000 people. These are known as nano-influencers. In ascending order, we then classify micro-influencers (between 5,000 and 100,000 subscribers), macro-influencers (between 100,000 and 500,000 subscribers) and celebrities (1 million subscribers).
    
  • The type of collaboration : among the various possibilities, we find the traditional product placement, through a post on social networks (this is a technique favored by 76% of influencers in 2023, according to Reech). Online stores can also be seduced by content sponsorship or the organization of a competition. In B2C, unboxing is also a popular format: the influencer unwraps a product received live, and expresses his or her emotions first-hand.
  • Retribution: in exchange for such promotion, the influencer may receive financial remuneration, a commission on sales or material compensation, such as a free product.

Influence marketing trends in e-commerce

Influencer marketing has been a preferred lever for e-tailers for several years now. Content created by influencers helps to increase visibility and boost sales. But every year, new trends emerge. Knowing about them and making them your own increases your chances of selling more... and better!

New trends in the e-commerce influencer market include, for example:

• The rise of long-term collaborations: Internet users are not fooled. To trust an influencer and a brand, they need to be sure that the collaboration is real, authentic and credible. Today, consumers prefer influencers who collaborate with fewer brands, but on a long-term basis. Your mission as an e-commerce site? To collaborate with an influencer ambassador, over a period ranging from 6 months to 1 year. The quality and durability of a partnership are real levers of trust.
  
• The rise of micro-influencers: campaigns run with micro-influencers generate an average engagement rate of 7%, 22 times higher than that of major celebrities (source: Influencer Marketing Hub study). This statistic confirms the impact of smaller influencers, capable of creating more personal and authentic relationships with their audience. E-tailers therefore have every interest in incorporating nano- and micro-influencers into their thinking in 2024. It's no longer the size of the community that counts... but the rate of engagement!
• An increasingly strict legal framework: the new Law of June 9, 2023 now provides a framework for commercial influence, in order to combat the excesses of influencers on social networks. This law now requires content creators to specify the words "advertising" or "commercial collaboration" when publishing a post paid for by a company. They are also obliged to declare for tax purposes the receipt of products or gifts sent by brands. To maintain their credibility, e-commerce sites therefore need to pay extra attention to the reliability of the influencers with whom they collaborate, as well as to compliance with the new legal rules

Source: Reech study, 2024

The benefits of Influencer Marketing in e-commerce

• Increased brand awareness

An influencer marketing campaign enables you to promote your e-commerce site to a wider audience. When a content creator communicates about your products, thousands of people discover (or rediscover) your brand.

In this way, you benefit from the reputation of an opinion leader to increase your own brand awareness. This rise in brand awareness is also accompanied by increased visibility and traffic on your e-commerce site, as well as on your social networks.

• Boosting sales and ROI

Influencer marketing is a genuine acquisition lever. It influences Internet users' thinking and buying behaviour, thanks to the recommendations of content creators.

71% of consumers are more likely to buy a product or service thanks to a publication on social networks (Source: Hubspot). As for influencers, the average conversion rate achieved thanks to their sponsored content is 2.55% (Source: Grapevine study).

So it's no surprise that many retailers are investing in this marketing strategy. Return on investment is a driving force: 89% of marketers claim that the ROI of influencer marketing is comparable or better than that of other marketing channels (source: Mediakix study).

Let's take an example of collaboration, between the Lancaster brand and influencer Juste Zoé. Together, they decided to go further than sponsoring a TikTok video or organizing an Instagram contest. The brand and the content creator co-created a unique handbag in 6 colors. In just one weekend, over 800 sales were made, with the bag selling out in 48 hours. This success story perfectly illustrates the power of influence on sales!

• Increased credibility and confidence

When a popular content creator recommends one of your e-shop's products, you instantly increase your "trust capital". As we've seen, Internet users are more likely to trust recommendations from trusted third parties, such as friends or influencers.

This impact on trust goes hand in hand with an increase in credibility: if a subscriber trusts an influencer who recommends a brand, then he or she is more likely to find the brand credible... And to make a purchase.

So, to develop your credibility, brand awareness and customer acquisition, you know what you have to do: rely on influencer marketing. 

How do I find influencers?

Now you know why you should implement an influencer marketing strategy. Ready to take action? The first step is to find the right influencers, to create the right partnerships. 34% of brands say they have difficulty finding influencers, not least because 67% are concerned about fraud or unreliable content creators (source: Shopify).

So, to find influencers, here's our advice for e-commerce sites: if your social network monitoring isn't working, get in touch with influencer agencies. These key partners offer complete support, to set up the whole campaign, in complete security. While the price may be higher, this solution offers a great deal of comfort.

Which communication channels should I choose for an e-commerce influencer campaign?

Territory Influence recently told BDM: "In 2024, as audiences diversify their online presence, brands need to adjust their strategies accordingly. This requires collaborating with influencers whose presence spans multiple channels".

Among the most effective communication channels for e-tailers' influencer marketing campaigns are :

1. Instagram

Instagram is the world's most powerful social network for influencer marketing. With overa billion monthly active users, brands can take advantage of a wide range of target demographics. What's more, the average engagement rate for an influencer on Instagram is 1.9%: a very good score!

On this social media, influencers can publish visual content, whether photos, videos, stories or real. The formats lend themselves perfectly to different types of collaboration: insights, sponsored ads, unboxing... Or even direct collaborations with influencers via Instagram Shopping.

On the other hand, influencer marketing is increasingly competitive and expensive on Instagram. With the rise of influencers on the network, some collaborations may seem less authentic. Finally, beware of frequent algorithm updates, which can affect the visibility of brand publications... And influencers!

2. TikTok

TikTok has only been around since 2016, but had accumulated over 1.5 billion active users on the app by January 2024. 45% of marketers use Tik Tok for their influencer marketing campaigns, mainly to target a young, dynamic audience that appreciates the short video format, a symbol of engagement and virality.

On this medium, the power of micro-influencers is no exception to the rule: they have an engagement rate of 17.96%, compared with 4.96% for better-known influencers (source: Affde). The algorithm is also favorable, as it values organic discovery and trending content.

However, e-commerce sites need to understand that a young audience dominates on TikTok, which may not be suitable for all products to be promoted. What's more, the lifespan of a video is only a few days. As trends evolve rapidly, long-term campaign planning can be difficult.

3. Facebook

Facebook is the most widely used social platform, with 2.8 billion monthly active users . Thanks to its highly precise advertising tools, influencer campaigns can be targeted effectively, and performance can be measured efficiently.

On Facebook, influencers can also leverage different formats: written posts, photos, videos, stories, groups and communities in which to interact... Community interaction is also at the heart of Facebook usage, particularly within groups.

However, organic engagement (or reach) is declining over the years, requiring brands to increase their advertising spend. The audience also tends to age, which can be a disadvantage for e-commerce sites targeting a younger audience. Finally, if you're new to marketing, the complexity of Facebook's advertising tools can be frightening.

4. Other promising channels

Other promising channels for influencer marketing (B2C or B2C) include :

• LinkedIn: ideal for reaching a professional and B2B audience, LinkedIn also helps reinforce a brand's credibility and authority. The audience and engagement rates are more limited, and influencer campaigns can be costly, but it's a platform of the future for B2B influence.
  
• Twitch: this live streaming platform broadcasts reliable, authentic content. Subscribers can respond live to content creators' product presentations, increasing engagement. To date, 6% of professionals say Twitch is their most influential channel.
  
• YouTube: vlogs, tutorials and reviews (of brands and products) are the most popular content on this platform. With its accessible, dynamic video format, it's a preferred lever for marketers. Today, 90% of Internet users discover new brands thanks to YouTube videos... A great opportunity to increase visibility and boost e-commerce sales!

5 tips for a successful influencer marketing campaign

Would you like to launch an influencer strategy to promote the products on your e-commerce site? Excellent decision. To help you implement this new marketing lever, here are our recommendations:

1. Define objectives: clear, measurable objectives are the common thread running through your strategy. So, why do you want to use one or more influencers? On average, 50% of the campaigns launched are aimed at improving brand image, 42% at generating online sales and 39% at expanding the audience.
   
2. Choose the right influencers: depending on their relevance, the size of their audience, their positioning on one or more themes, their rate of engagement... To help you choose and contact influencers, you can call on the services of a specialized agency.
3. Draw up a precise brief: to ensure that the influencer's communication is as credible as possible, your mission is to brief them effectively. A brief document can include a presentation of your e-commerce site, your values, a detailed presentation of the products to be promoted, examples of arguments to be put forward... The brief is also accompanied by a contract, to secure the expectations and financial terms of the partnership.
   
4. Discuss the content: before the influencer publishes a post or video, discuss and agree on the content to be created. The more personalized the campaign, the greater the impact of the content. For long-term collaborations, also discuss an editorial calendar, various commercial highlights and brand news. At the time of publication, also make sure that the content creator complies with the legal framework in full transparency, by mentioning the collaboration.
   
5. Track and measure performance: this is the final step in any influencer strategy. Performance analysis is essential to calculate the campaign's ROI. To achieve this, monitor the following KPIs: engagement rate, number of subscribers on the brand's social networks, evolution of website traffic, conversion rate... Depending on the results, you can make continuous improvements to your future marketing campaigns!

E-commerce: 3 examples of successful influencer campaigns

• Joone

This baby care brand has increased its popularity through influencer marketing, in particular through long-term campaigns with influencers. Macro and micro-influencers share Joone's values: transparency, authenticity and simplicity.

Thanks to publications on social networks, over 3 million targets have been reached. The EMV (earned media value), which corresponds to the means of measuring the return on investment of the content created, is around €96,000.

• Hello Jack

Hello Jack is a D2C (Direct to Consumer) pet food company . To conquer the market, right from its launch, the brand relied on an influencer marketing strategy: for the first two months, the company sent products to over 500 KOLs (Key Opinion Leaders) on Instagram and Facebook.

The results? Nearly 3 million reaches of the publications, and the creation of an active community of 9,000 followers on the brand's Instagram, as well as numerous sales.

• Daniel Wellington

The watch brand is a benchmark in influencer marketing. Daniel Wellington has collaborated with hundreds of micro-influencers and macro-influencers, to promote their products. Influencers share photos of themselves wearing the watches, on Instagram, with a dedicated hashtag and a promo code for their followers.

In one year, thanks to these advertising campaigns, over 1.2 million publications have been indexed thanks to the hashtag. The company's subscriber base grew by 1.1 million, and sales soared: 214%!

Conclusion

Have you just created your e-shop, from an e-commerce site or marketplace? Now you know how to boost your visibility and product sales... Thanks to influencer marketing.

In addition to this acquisition strategy, think of other useful marketing levers to boost your growth. 

by Haro Valentin

Choosing the Optimal Pricing Strategy for E-commerce

39.4 million French people buy on the Internet: that's 500,000 more buyers than last year, according to Fevad (2024). E-commerce is winning over more and more customers... And the number of online stores is growing too. France is even considered Europe's second-largest e-commerce market, just behind the UK.

So, for professionals, the competition is real. But how do you stand out from the crowd, make a profit and attract as many customers as possible, all at the same time? The answer can be summed up in 3 words: pricing strategy.

With a good pricing strategy, sellers are sure to sell more, and better. And this is true whether they offer their products via e-commerce or marketplace. So, what are the different pricing strategies? And how do you choose the right price for your products? Follow the guide!

The importance of pricing strategy in e-commerce

Pricing strategy is a crucial issue in e-commerce. In fact, it's one of the most important elements for consumers: while a fair price can be a motivating factor for purchase, a price deemed too high can drive buyers away to the competition.

For 2.0 sellers, product pricing is a strategic action to be taken as early as possible, right from the creation of the e-commerce site or before joining a marketplace such as Rakuten. It's part of the 4P strategy (Price, Product, Place, Promotion)... And the only one to be a profit structure, rather than a cost structure!

Beyond simply offering "the best price", this strategy must reflect the company's pricing identity. This pricing identity rests on 4 pillars (source: La stratégie Prix, Dunod):

1. Consistent price positioning: product prices must be consistent with each other and with the brand image. This pricing positioning must be clear to buyers (low-cost, high-end, mid-range, etc.).
2. Offer legibility: buyers must be able to find their way easily between the different products. Product price comparisons must not be complex or illogical.
3. Price promise : the prices offered must respect the promise made to the customer, with regard to the product or range of products.
4. Responding to needs: e-tailers must ensure that their prices respond to customers' needs, without restricting the shopping experience.

Once these fundamentals have been defined, an optimal pricing strategy offers sellers the following benefits:

• Improved competitiveness: pricing is a golden differentiation lever, enabling you to maintain your competitive edge in a booming e-commerce market.
• Increased profits and profitability : the right pricing increases margins, profits and growth.
• Customer loyalty: as long as price doesn't become an obstacle, customers remain loyal and committed. Ideal for long-term retention!
• Optimized inventory management: an effective pricing strategy allows you to optimize inventory management, in particular through prices that fluctuate according to the time of year, to sell off items that were previously unsold.
• Enhanced brand image : price is an essential component in the perception of a company. Perceived value varies according to the prices set for products.

However, to take advantage of all these benefits, you need to know which pricing strategy to choose, for your online store or marketplace presence... Let's discover the different possibilities.

6 e-commerce price strategies

Traditionally, product manufacturers share a recommended retail price (RRP). However, e-tailers are free to set their own prices, in particular to increase their margins. Different approaches are possible. Here are 6 of them:

1- Competition-based pricing

The prices charged by competitors are key indicators for setting your own prices. For example, if you offer your products on a marketplace like Rakuten, you can analyze the selling prices offered by other sellers before posting your own:

Based on competitors' prices, you can then opt to :

• A premium strategy: sell your products at a higher price than your competitors, because your perceived value is higher and more upscale.
• An alignment strategy: sell your products at the same market prices as your competitors, to avoid a price war.
• A low-cost strategy: sell your products at lower prices than your competitors, to attract more cost-conscious customers.

2- Cost-based pricing

To calculate the "right price", you can also take into account internal cost factors. What are your manufacturing and storage costs? Your delivery costs? Your target gross margin?

Depending on your answers to these questions, you'll be able to set pricing based primarily on costs. Your mission: to ensure a profit margin that enables you to achieve the best possible profitability.

This margin depends on the type of product you sell and your sector. It can vary from 7% to 50%. The higher the margin, the more profitable your online store.

Find out more about the KPIs you need to follow in e-commerce, to maximize your success.

3- Value-based pricing

This indicator is based on the value perceived by customers, to define selling prices. Do you know what your brand equity is? Are your products perceived as high-end, mid-range or low-end? How do consumers describe the quality of your products?

Based on the answers to these questions, you can determine value-based pricing. The more upscale and qualitative the brand is perceived to be, the higher the prices can be.

To take things a step further, you can also adjust your prices according to customer demand. This is known as Yield Management. This technique optimizes stock levels and profit margins, based on customer demand (which also depends on perceived value!).

4- Dynamic pricing

This strategy involves adjusting prices in real time, using predictive algorithms. They take into account numerous factors, such as customer demand, inventory, sales seasonality, promotions, economic trends, etc

To implement dynamic pricing, complex software is required. Prices then become flexible and evolve in line with the market. This strategy is ideal for maximizing profits, but if you're just starting out in e-commerce... Beware of costly solutions!

5- Penetration pricing

This method is often used by new e-tailers. It involves offering a low price to attract customers and "penetrate" an existing market. The seller then gradually increases the price over time.

Over time, market share is built up and products become better positioned. However, this practice is not immediate: it requires a great deal of patience!

6- Skimming pricing

This strategy is the opposite of the previous one. Whereas penetration pricing consists in gradually increasing the price of products, skimming allows you to lower prices over time. The aim of skimming is to set a high initial price, in order to attract customers known as "early adopters".

This type of customer is ready to pay a high price to benefit from a product quickly. Then, over time, products lose their value: it becomes necessary to adjust their prices downwards, to continue generating sales and profit.

How to choose the right pricing strategy?

Are you hesitating between different pricing methods? Don't panic! Here are our key tips for successfully carrying out your e-commerce project. They'll help you make the right choice, then adjust your strategy over time... to generate maximum success!

Know your market and your customers

A "good" strategy is always based on "good" data. And that data comes first and foremost from your customers' behavior: what are their preferences? Their demographic characteristics? Their buying behavior? Price sensitivity?

All these elements will help you to better understand how your customers perceive the value of your products. You'll then be able to propose pricing that's advantageous for your customers, and relevant to the rest of the market, to set you apart from the competition.

Evaluate costs and margins

Beyond customer and market analysis, the second factor to consider is your costs and margins. List your various production, transport, storage and customer delivery costs... as well asthe commissions charged by marketplaces, if you choose to sell on a platform like Rakuten.

For example, at Rakuten, our rates are adapted to your needs and the value of the item sold. Ideal for greater profitability!

Click here to discover our rates.

Experiment, test, iterate!

There's no such thing as a perfect pricing strategy. To find the method that best suits your products, your market and your customers, we advise you to experiment with different approaches. Dynamic pricing, pricing based on competition or added value, penetration strategy..

Remember to analyze the data from each strategy tested in real time, to adapt according to the results obtained. This experimentation phase can take several months, and that's perfectly normal. Take the time to test, measure and iterate.

Test approaches such as dynamic pricing, competition-based pricing or value-based pricing to assess their effectiveness. Analyze the data in real time and adapt your strategy according to the results.

To adjust your strategy effectively, you'll need to measure the right performance indicators. These include conversion rate, profit margin, sales over a given period... Compare all the KPIs obtained, if you are testing different pricing methods.

Implement promotions and discounts

Promotions, sales, discounts... Reducing the sale price during a given period is effective not only for increasing sales in the short term, but also for attracting new customers. It also helps you sell off excess stock. An ideal operation to stimulate growth!

Promotions can take many forms:

• Sales: these discount periods generally cover a wide range of products on a fixed date.
• Launch offers : these special promotions are organized to coincide with the launch of new products.
• Group purchases: these discounts encourage the purchase of several items together, to take advantage of a discount.
• Flash sales: these major discounts on certain products over a short period of time are particularly effective in e-commerce. Flash sales are even considered a growth lever!

Whatever the nature of the promotion, be sure to round down low prices to the nearest decimal place, or to round up high prices to the nearest round. For example, a promotional item will sell better if it costs €20 or €9.99, rather than €21 or €9.35.

A final tip: for easy promotions and extra discounts... Use Rakuten Coupons and Rakuten Points, if you sell your products on our marketplace!

Rakuten Coupons are discount coupons valid only on your products.

They enable you to gain instant visibility on our platform: your ads that benefit from Rakuten Coupons are automatically placed in strategic Rakuten locations, such as the Rakuten Deals page.

Rakuten Points are additional discounts you can offer your customers, without affecting the face price of your products. Rakuten Points are available to Club R members, who can receive up to 20% extra discount on your products. Ads benefiting from additional Rakuten Points discounts are also featured on the most attractive positions on our platform.

In short, our marketplace is home to over 12,000 professional sellers, free to set their own prices and offer their customers exclusive promotions on their Rakuten e-shop. 13 million loyal, regular buyers are just a click away. Perfect for making your first sales quickly... and growing your online store, directly from our marketplace.

So, are you ready to embark on your e-commerce adventure?

by Haro Valentin

Second Hand: Key Benefits and Tips

The second-hand market is booming. It's worth over 128 billion euros worldwide (source: Tripartie), and more and more buyers are turning to this type of product. After reading this article, you'll know all about second-hand goods, their advantages and how to make the most of them.

What is second hand?

Second-hand products, also called pre-owned or refurbished products, are products that have already been owned by a buyer and are being offered for sale again. In short, we give these items a "second life" by enabling them to be used again by a new buyer.

More and more consumers are turning to pre-owned products every year. In 2023, 52% of French people planned to give second-hand items as Christmas presents, compared with just 20% in 2021. Online sales sites and marketplaces are the preferred place for these purchases. According to Fevad, 45% of online shoppers bought at least one second-hand product in 2023.

These items are therefore rich in opportunities, and many retailers are well aware of this. In fact, 29% of them were already offering second-hand products in France in 2023(ACSEL barometer, 2024).

Advantages of refurbished products

Second hand products offer many advantages, both for sellers and their customers:

Second hand advantages for customers

• Cost savings: these products are generally less expensive than their new equivalents;
• Quality products at lower cost: the lower price allows consumers to discover brand-name or higher-quality products, which the new price might put off;
• A wider variety of products: buying pre-owned allows access to items that are no longer on sale. This is particularly true of fashion items, whose availability is limited in time depending on catalogs;
• Reduced environmental impact: buying a refurbished item reduces its impact at every stage (production, transport, packaging, etc.). What's more, buying second-hand extends the life of products, which drastically reduces the volume of waste generated.

Second hand advantages for sellers

• Better margins: second hand products often generate higher margins, especially on refurbished or reconditioned items. In fact, the cost of putting them back on sale is generally lower than their production cost;
• Attract a new customer segment: as we saw earlier, second hand market is booming, and new types of customer are emerging. Selling this type of item is a way of attracting this clientele;
• Improving brand image: consumers are increasingly aware of brands' eco-responsible initiatives. 72% of French people say they choose environmentally-friendly products (Fevad, 2024). Giving a second life to your products can therefore become an asset for your brand image;
• Better inventory management: putting back on sale products returned by your customers, or unsold items from the previous season, is a good way to limit your inventory while generating additional sales.

How can I sell pre-owned products online?

To sell pre-owned goods online, you have several options:

• Create an e-commerce site: a site dedicated to your products, which you can configure and customize as you wish. This option gives you the advantage of flexibility, but requires significant investment (site construction and maintenance, audience development, search engine optimization, etc.);
• Join a marketplace: your products are sold alongside others on a virtual marketplace. This option has the merit of limiting the effort required on your part for technical aspects and product promotion (the platform takes care of this). What's more, it allows you to benefit from the reputation of the chosen marketplace, making it easier to reach a large number of customers.

At Rakuten, you can combine both approaches. In fact, becoming a Rakuten seller allows you to create your own E-Shop on our marketplace, a fully customizable space dedicated to your store. This means you can keep control of your brand and customize your visuals and customer experience to your heart's content.

Once you've made this choice, it's essential to adapt your strategy to selling second-hand goods online. Consider the following elements in particular:

• Product selection and evaluation: Identify items that are likely to be resold, whether they are returns, end-of-series items, reconditioned items, etc. Make sure that these products meet customer expectations. Make sure these products meet your customers' expectations.
• Reconditioning and reconditioning: If necessary, carry out repairs or reconditioning to ensure that products are in good working order and appearance before they go on sale.
• Effective presentation: Present your products attractively on the e-commerce site or marketplace of your choice. Use detailed descriptions, quality photos, and highlight the economic and environmental benefits of these purchases.
• Customer service: Offer quality after-sales service, with return and warranty policies adapted to second-hand sales, to reassure potential buyers.

Second-hand, at the heart of Rakuten's DNA

At Rakuten, second-hand is a historic pillar of our growth in France, and an essential marker of our identity. Today, one out of every two products sold on our marketplace is refurbished. We have more than 50 million pre-owned product references, and their sales are growing fast. During Black Friday 2023, for example, 43% of products sold were second hand.

To encourage our customers to turn to these products, we have also created the Vision'R badge, a system that rewards second-hand purchases. We were also keen to remove disincentives to the purchase of refurbished products. Our CeRtifié reconditioned program and our buyer protection guarantee customers quality, functional products. These initiatives enable our sellers to reach more and more customers, for the benefit of all.

Do you sell second-hand products, or would you like to start doing so? Then don't wait any longer! Join our 12,000 sellers and embark on the Rakuten adventure!

by Haro Valentin

How to calculate your e-commerce shipping costs?

Haro Valentin

by Haro Valentin

Marketplace or dropshipping: which model to choose?

In the e-commerce ring, two key concepts clash. On our left are marketplaces. On the right, dropshipping.

But are these two models (really) vying for the attention of online shoppers? What are their differences? Are they complementary? And above all, should you choose marketplace or dropshipping to sell your products online?

Follow the guide, and find out all the answers from Rakuten in this article. On the program:

• Marketplace and dropshipping: definition
• Marketplace vs dropshipping: what are the differences?
• Why choose the Marketplace model?
• Dropshipping and marketplaces... How can they complement each other?

Marketplace and dropshipping: definition

What is dropshipping?

Dropshippingis a form of e-commerceinwhichthe seller has no stock of products. The system is simple: a customer places an order on an e-commerce site, which then transfers it to a wholesaler (supplier). This supplier then ships the goods to the consumer.

In this system, the seller is merely an intermediary. He does not handle inventory management or shipping. However, he remains legally responsible for the sale of products and commercial transactions.

Very popular in recent years, the drop shipping market was estimated at around $128 billion. Now booming, it should reach $301.11 billion by 2024 .And according to forecasts by Grand View Research, dropshipping is set to continue expanding: annual growth isestimated to rise by 23% between 2023 and 2030 .

What is a marketplace?

Amarketplaceis an online platform that facilitates contact between buyers and sellers .On this multi-seller site, brands can sell their products or services online, usually for a commission or monthly subscription fee.

The system is as follows: merchants create an e-shop on the marketplace to sell their products. They manage inventory and order dispatch. Some marketplaces, such as Rakuten, also offer tomanage logistics, thanks to the Rakuten Fulfillment Network .

In other words, the marketplace is a large digital shopping mall. Each store inside represents a partner vendor. Visitors (or web users) can stroll from store to store... without disconnecting from the marketplace.

Does this business model appeal to you? You're not alone. More and more e-merchants are choosing to sell their products through a marketplace, to gain greater visibility, multiply sales opportunities, secure transactions and simplify logistics processes.

The results? In 2020 alone, marketplace sellers increased their sales by an average of 24% on this channel. Growth was twice that of e-commerce (according to a Mirakl study, 2021).

Marketplace vs dropshipping: what are the differences?

1. Bringing buyers and sellers together

In dropshipping, this is the e-merchant's mission: to create a website, promote his products... and attract buyers. Although the stock of goods is released by the suppliers, it's up to the distributor to sell the products, from their own website. Marketing costs are therefore higher than with a marketplace.

A marketplace, on the other hand, facilitates the relationship between buyers and sellers. Internet users can discover different e-shops in a single location. Rakuten, for example , has 13 million loyal buyers. All e-tailers have access to this large-scale community, to boost their sales!

2. The players involved

Dropshipping and the marketplace are two tripartite models... but they don't involve the same buyers!

On the one hand, dropshipping involves a seller, a supplier and buyers. The seller sets the selling price, based on the purchasing costs negotiated with suppliers.

On the other hand, a marketplace like Rakuten involves a platform (or operator), third-party sellers and buyers. It's the sellers who manage their offers, prices and sometimes even logistics. Whether it's a B2B or B2C marketplace, the players involved remain the same.

3 . Customer acquisition costs

Customer acquisition costs are a very important e-commerce KPI. The higher this cost, the more the company has to invest to attract customers to its e-shop.

Dropshippers are considered to have a higher acquisition cost. Indeed, e-tailers need to invest in marketing, and mainly in social ads, to attract traffic and generate sales on their store.

On the other hand, marketplace e-tailers benefit from a strong audience. At Rakuten , 15 million unique visitors visit our marketplace every month. Sellers benefit from this continuous flow of customers to their ads, and save money in the process.

Example of an ad on the Rakuten marketplace

4. Logistics

Drop shipping doesn't always get good press in the eyes of consumers. One of the main reasons? The lack of transparency in logistics. Indeed, many buyers purchase a product without knowing that the sender is not the brand, but a supplier (often located on the other side of the world).

Suppliers ship products in the distributor's name, giving the impression that the product comes from the distributor. Delivery times are generally long.

Conversely, in a marketplace, the seller ships the product directly to the customer. Logistics are simpler and more transparent. With some platforms, such as Rakuten, e-tailers can even outsource logistics, on a long-term basis or for more occasional needs .

Our tailor-made logistics service supports your e-commerce expansion, without compromising customer delivery times. With Rakuten Fulfillment Network, 99.8% of orders placed before 2 p.m. are delivered within 24 hours, to satisfy even the busiest shoppers!

5. The business model

A drop-ship e-shop enables e-tailers to collect the total amount of orders placed. They then pay their suppliers. The dropshipper's profit margin is the difference between the purchase price and the selling price. Onaverage ,the profit margin varies between 45% and 65%, depending on the nature of the items sold and supply conditions .

In the marketplace, the business model is as follows: the marketplace takes a commission on sales by third-party sellers, in addition to any other fees (registration fees, subscriptions, sponsored links).

At Rakuten, our 12,000 sellers can choose between two offers :

• The starter pack, free with commissions starting at 14%
• The expert pack, €49 per month with commissions starting at 8%

Our first freemarketplaceoffer is ideal for getting started in e-commerce :

"The Starter Pack aims to facilitate access for small businesses, looking for a complementary audience, to the Rakuten platform, its ecosystem of services and its community of active members. It's in line with our promise of 'e-commerce that puts everyone on the same page', whether you're a young pure player new to the market or a long-established local business", explains Matthieu Denime, Sales Director at Rakuten France.

6. Customer service

Late delivery? A problem receiving a parcel? A question from a buyer? All these situations require the intervention of an e-commerce customer service department. In fact,itisestimated that 5 out of 10 French customers contact a customer service department for a question or an update on their delivery or order (source: Essendex survey, 2023).

In dropshipping, the distributor manages customer relations and customer service, including returns, which it then passes on to suppliers. In many cases, a contact form is set up for after-sales service.

On digital marketplaces, third-party sellers also manage returns and after-sales service. However, if they choose a marketplace like Rakuten, they can entrust us with the management of after-sales service. Rakuten Fulfillment Network takes care of resolving any logistical problems encountered by consumers. Meanwhile, sellers can concentrate on what they do best: selling.

Why choose the marketplaces model?

Ready to embark on your e-commerce adventure, and join the 207,000 online stores in France? Here's our advice on how to set up your online store safely: opt for the marketplace model to develop your e-shop. And if you're wondering "why choose the marketplace model?", here are our answers:

1. High visibility

When you join a marketplace, you're not starting from scratch to find your first buyers. On the contrary: you benefit from an already established reputation, which makes it easier to build your brand image and sell your products.

For example,Rakuten attracts 15 million unique visitors a month and 13 million recurring buyers who are members of Club R. Ideal for our 12,000 professional sellers!

2. Transparency and trust

Unlike dropshipping, marketplace customers know where their products come from. As a seller, this makes it easier to build a relationship of trust, based on transparency. This trust is the foundation for greater customer satisfaction, which in turn increases customer loyalty.

Good news for e-merchants in the marketplace, who can then make trust rhyme with growth: a 5% increase in the loyalty rate can lead to an 85% increase in profits, according to a Harvard Business Review study.

3. E-commerce highlights

Selling your products on a marketplace means taking advantage of a number of highlights, which increase traffic and sales. Infact, marketplaces organize sales events according tothe seasonality of their sales: sales, Black Friday, Christmas, Mother's Day, Valentine's Day... What's good for e-tailers at these key moments? Promotional efforts are managed by the marketplaces!

To make sure you don't miss any key dates, and to optimize your online sales strategy... Discover our 2024 e-commerce highlights guide .

4. Ongoing adaptation and monitoring

When you choose to sell on a marketplace, you benefit from total flexibility. You can quickly add new offers, enhance your bestsellers and adapt to market trends. And if a product performs less well? You can remove it in just a few clicks.

You're the captain of the ship. You navigate, you make the decisions... But you're not the only master on board! If you need advice or support to improve the quality of the service you offer your customers, some platforms like Rakuten put a dedicated team at your disposal.

At Rakuten, your store is monitored by an e-commerce consultant, who is on hand to share advice and help you boost your sales over the long term .

5. Healthy competition between sellers

On a digital marketplace, third-party sellers set their own prices. This enables dynamic updating of offers, in line with market variations. The result? This flexibility ensures constant competitiveness and rapid adaptation to changes in demand.

In order not to hinder this healthy competitiveness between the players on its platform, Rakuten has a bias: unlike other marketplaces, we don't sell our own products. By choosing a marketplace like Rakuten, you choose to sell freely... without competing with our platform, which hosts your e-shop. Our efforts are dedicated to showcasing your products, to guarantee your success.

Dropshipping and marketplaces... How can they complement each other?

Are dropshippers really the enemy of marketplace e-tailers? At Rakuten, we believe it's possible to bring together the best of both worlds. That'swhy, unlike many marketplaces, we allow our sellers to practice dropshipping, under certain conditions .

The main condition is the existence of a legal entity. This is essential to enable third-party sellers to benefit from the advantages of our marketplace, and to build maximum trust, especially with our 13 million loyal buyers.

So, whether you're a professional dropshipper or not, you now know which lever to use to launch your e-shop: a marketplace like Rakuten. By opting for a 2.0 marketplace, youbenefitfromincreased visibility, optimized offermanagementanda relationship of trust with customers .

With Rakuten Fulfillment Network, you can even outsource your logistics. So, are you ready to enjoy rapid, sustainable growth online? You're just one click away from all these benefits:

by Haro Valentin

What is lead time? Definition and best practices

Lead time. Does this term mean anything to you? It's one of the most important e-commerce KPIs to master. Especially today: the commercial landscape is changing by the day, with players becoming faster, more responsive and more agile.

Lead time is the time elapsed between two key actions, such as customer purchase and delivery of goods. To maintain your place in the market, and in the hearts of your customers, mastering your lead time is essential. So, would you like to improve your sales strategy? Enhance your performance and logistics?

Follow our guide to discover, calculate and optimize your lead time.

What is Lead Time?

Lead time is a key concept in e-commerce logistics. We mainly talk about sales lead time. The definition is simple: it's the time spent between placing an order and delivery to the end customer. In other words, it corresponds to the actual time between the moment a web surfer clicks on "Buy" and the moment he gets the product in his hands.

In addition to sales lead time, there are other types of lead time, such as :

• Purchase lead time : this process takes into account the entire customer search, calculating the time elapsed between the search for a product and its final reception.
• Production lead time : this is the time spent between the start of product manufacturing and the moment when the product is ready for delivery .
• Procurement lead time : this refers to the time needed to procure goods for sale (choice of suppliers, negotiation, ordering, delivery of stock to the company, etc.) .

All these types of lead time are often associated with the notion of "cycle time". Cycle time is part of lead time: it corresponds to the time needed to complete a specific task, project or process, from start to finish.

In this article, we'll focus on sales lead time, which is the most closely followed in e-commerce... And the most important, to improve performance and stimulate growth.

How do you calculate lead time?

The formula for calculating sales lead time is :

Lead Time = Delivery date - Order date

The result is the number of days from receipt of the order to delivery to the customer. We recommend thatyoucalculate lead times for procurement, order processing and delivery for all products sold on your e-shop, based on order and delivery history .

Then move on to analysis. The shorter the lead time, the faster you can satisfy your customers. Today, speed of delivery is a major criterion when buying online. For 88% of French buyers, it's even as important as the product itself! (Source: Uber Direct and Ipsos study, 2023).

Finally, don't limit yourself to analyzing your lead time by product. Calculate and compare your different average lead times throughout the year, especially during key e-commerce periods. The results obtained in relation tosales seasonality will help you identify areas for improvement, to speed up your processes .

Why track and reduce lead time?

Your mission? Sell the right products, to the right people, and deliver them under the right conditions. In as little time as possible. Infact ,French consumers are prepared to wait an average of 5 days maximum to enjoy their purchases (source: SendCloud study, 2023).

By calculating and tracking lead time, you can :

• Improve customer satisfaction: it's the sinews of war. The faster a customer is delivered, the more likely they are to be satisfied. And the more likely you are to win their loyalty, making it easier for them to buy again! A short lead time is a guarantee of trust and reassurance.
• Strengthen your competitive edge: knowing your lead time means you can adapt your marketing strategy to promote the agility so dear to customers' hearts. For example, highlighting a maximum 3-day delivery time is a major advantage in setting yourself apart from competitors who deliver in 4 or 5 days. Eliminating intermediate steps that lengthen delivery times is the key to offering reasonable lead times that appeal to customers.
• Refine your demand forecast: the more you know about your demand, the more easily and accurately you can estimate it. Calculating lead time enables companies to draw up better logistical forecasts. This is a real asset for enjoying a more predictable cash flow, reducing your costs and improving your financial performance.

• Reduce your stock levels : a short lead time means you need to stock fewer products. Conversely, the longer the lead time, the greater the stock of stored products. Calculating and optimizing this KPI is therefore essential to improve your inventory management...And reduce your storage costs.
  
  

Factors influencing Lead Time

While reducing lead time is becoming a priority for many e-tailers, it's not a task that can be achieved by snapping a few fingers. Despite the good will of professionals, certain factors influence lead time. Knowing what they are means you can act more effectively when they arise, or anticipate them. These include

• Human error: miscommunication with a supplier, lack of training for an employee, forgetting a key piece of information... All these human errors are common. The solution is not to eliminate the human element from your sales cycle, and automate everything... But to support it as best you can, to limit errors.
• Geographical location: where is your company located? Where are your suppliers? Your warehouse? Your customers? By locating all these stakeholders, you can identify whether or not your supply and delivery chain is too complex. The further away these different locations are, the more your lead time will be impacted!
• Natural events: floods, earthquakes, storms, etc. are difficult to prevent and have a negative impact on lead time. To cope with them, we advise you to diversify your manufacturers, strengthen your inventory systems and anticipate potential action plans.
• Seasonality of sales : certain periods such as sales, vacations, Christmas or Valentine's Day can increase demand for products to be produced and delivered, and thus impact lead time. Anticipating which days are working days and public holidays also makes all the difference, so that customers can be satisfied.

You now know how and why to calculate your lead time. You also know the criteria that can increase or decrease your lead time. Now it's time for an action plan: here's how to optimize your lead time, and boost your company's performance.

How to optimize your lead time?

Here are 3 techniques to reduce your lead time, and thus contribute to the growth of your e-commerce business:

1. Use technology as an ally

As we said earlier, removing people from your processes is not the solution. On the contrary, combining people and technology is a winning strategy for improving your processes!

Specialized logistics software will help you to better manage unforeseen events, track inventory in real time and centralize all information concerning your supply chain. A demand forecasting tool is particularly useful, to anticipate variations in orders and adjust production accordingly .

You can also opt for a Warehouse Management System (WMS) to optimize logistics flows, manage inventory and monitor processes. Then, for transport management, a Transport Management System (TMS) helps optimize this part of the logistics chain, to improve transport conditions and reduce delivery times .

Whichever solution you choose, always opt for a centralized IT space, to avoid multiple spreadsheets and chains of e-mails sent to logisticians. This is what we offer our marketplace sellers , with Rakuten Fulfillment Network. It's a practical way to manage all your logistics in just a few clicks... while entrusting us with packaging, order dispatch and much more besides:

2. Maintaining good relations with suppliers

When we think of "lead time", we think first and foremost of delivery to consumers. But before that, don't forget that this indicator also takes into account other logistics components, such as production and the delivery of goods by suppliers. Without these stages in the sales cycle, there can be no final delivery, and no customer satisfaction and loyalty!

Since suppliers are an integral part of your overall lead time, take care of your relationships. Good communication and collaboration reduce the risk of inefficiencies. Trust, transparency and exchange also improve the transmission of information, flexibility and fluidity of operations .

3.Reduce contact points

Yes, the quality of the relationship with your service providers counts. Unlikethe quantity and multiplication of logistics service providers! To reduce your lead time, it's in your interest to reduce your points of contact. Rather than going through 5 different contacts, each responsible for a different link in the supply chain... Have you considered using a 4PL provider?

A 4PL (Fourth Party Logistics) providerisan intermediary in charge of a company's entire logistics. Its aim is to manage and optimize the entire supply chain. It acts as a single point of contact for all logistics issues, managing all links in the chain (carriers, warehouses, after-sales service, etc.) and all stages (storage, preparation, dispatch, customer returns).

Thisiswhat we offer with RakutenFulfillmentNetwork. Our turnkey solution, with no hidden costs, takes care of every stage of your e-logistics. Your customers are satisfied, your schedule is relieved. And you can (finally) concentrate on what you do best: selling.

With Rakuten Fulfillment Network, you benefit not only from improved lead time, but also from :

• 25% more time for your business
• 25% average savings on logistics costs
• 99.8% of orders placed before 2 p.m. are delivered within 24 hours, to ensure customer satisfaction

Ready to join the 12,000 professional sellers on our marketplace and offer your products to our 13 million regular buyers? To set up your own e-shop and place your trust in a reliable logistics partner, click here:

by Haro Valentin

D2C logistics: definition, challenges and optimization keys

160 billion euros will be spent online by 2023, according to FEVAD. E-commerce continues to boom, with one key model on the rise: direct-to-consumer (D2C) sales. The principle? Sell products or services directly to consumers, without intermediaries.

However, the growth of this model brings with it a number of challenges, particularly when it comes to logistics. How can we improve inventory management? How to optimize the supply chain? How can we maintain a high level of customer experience and satisfaction?

Find out all the answers in this article. D2C logistics will soon hold no secrets for you!

1. What is the D2C model?

Sézane, Le Slip Français, Gemmyo... You've probably heard of these successful brands. What makes them special? A business model based on direct-to-consumer. In fact,these companies rely to a large extent ona strategy of direct sales to consumers, without going through intermediaries .

Visual source

This modern form of commerce is becoming increasingly common in sectors such as the automotive industry. Tesla, for example, concentrates on selling its vehicles directly, without going through dealer networks. Thermomix and Tupperware also made their name through direct sales, this time to the home. Finally, many mattress brands such as Emma, Tediber and Casper have also relied on D2C to develop their business. In short: D2C is a multi-sector model.

There's no longer any need to rely on distributors, wholesalers, supermarkets and hypermarkets... Direct-to-consumer allows for a more personalized, direct relationship with buyers.

It is also a guarantee of flexibility, and often profitability, thanks to higher margins. For a behind-the-scenes look at this business model, see our article: D2C: advantages, challenges and keys to success in direct sales.

2. D2C logistics

Logistics: an essential link in the chain of success!

80% of consumers are expected to make at least one purchase via a D2C brand in the next 5 years. But to guarantee a quality experience, here's the key success factor: logistics (or fulfillment).

In e-commerce, logistics refers to the entire process of storing, managing, shipping and delivering a company's products. Theaim of logistics is tosuccessfully manage the entire physical flow of products to the end consumer .All these links in the logistics chain have a direct impact on the user experience. Where fast delivery makes for greater customer satisfaction, a delay in delivery or a packaging problem can be a major turn-off..

This is one of the key success factors for D2C brands: successful logistics. And to achieve this, companies have several solutions. They can choose to manage all logistics in-house, or outsource all or part of it. In both cases, the challenges are numerous..

Logistics challenges for D2C brands

The objectives of direct-to-consumer logistics are to :

• Predict and anticipate customer demand

• Manage product supply and storage

• Process orders

• Control delivery costs and lead times

• Track parcels
• Handle after-sales service and any customer returns

Faced with these objectives, the main challenges for D2C retailers are to minimize logistics costs and components. In particular, storage, transport and product availability. The question to ask is: as an e-retailer, are you capable of managing all logistics on your own? Or would you rather concentrate on what drives you most: selling?

Indeed, D2C sales are not incompatible with the creation of logistics partnerships! Quite the contrary, in fact. To meet the challenge of developing their direct sales business, many e-tailers rely on logistics partners like RakutenFulfillment Network.

3. Supply chain: how is flow management organized?

Logistics and supply chain are often confused. Let's remember the difference: logistics is part of the supply chain process. Where logistics is concerned with the movement and maintenance of products (in and out of the company), the supply chain is the strategy that coordinates and manages the entire supply process .

The supply chain is a means of linking all the players in the supply cycle, from production to delivery. In addition to coordinating producers, logisticians, carriers, etc., the supply chain is divided into 4 major flows:

• Physical flow: supply, transport and storage of goods.
• The information flow: all the data (or Big Data) that drives the physical flow.
• Financial flow: all transactions carried out both externally (with partners, suppliers or subcontractors) and internally, within the company .
• Administrative flow : all documents circulating between supply chain stakeholders.
  

To better understand the role of these flows and optimize them for optimal logistics management, take a look at our dedicated guide: how to improve your e-commerce supply chain?

4. How to optimize your D2C logistics strategy?

Measure and monitor current performance indicators

Do you know whether your e-commerce strategy (and therefore your current logistics) is contributing to customer satisfaction? Are they complaining about late deliveries or making complaints?

To optimize your logistics process, the first step is to observe your customers' needs, measure their current satisfaction and your results. Key KPIs to track include :

• NPS

• CSAT

• Sales figures

• Sales margin

• On-time delivery (OTD)

• Product return rate

• Inventory turnover rate
• Cost per unit delivered

And all the indicators can be found here: the 11 key KPIs for maximizing your e-commerce success .

In addition to quantified KPIs, take an interest in your customers' qualitative feedback. What are their satisfaction or dissatisfaction criteria? Product packaging, delivery time, place of manufacture, delivery method... All these elements are linked to your logistics, and can be optimized according to the feedback received by your customer service or shared in online reviews.

This regular monitoring enables you to measure

oosing the shared logistics option

the impact of your e-commerce strategy, from a financial and customer point of view. Depending on the figures and customer feedback, you'll probably have to rethink the evolution of your logistics.

Here's an example of logistics optimization: pooling. Pooling logistics enables you to optimize the supply chain, from receipt of goods to delivery to the end consumer. Examples of pooled logistics include the sharing of storage warehouses between several companies, or the pooling of delivery vehicles.

This form of logistics is on the increase because it meets retailers' expectations, particularly in terms of cost reduction. Smaller, urban logistics centers are also emerging. Practical, to bring products closer to customers and meet environmental constraints.

Opt for outsourced logistics

D2C places customer proximity at the heart of its business model. To maintain this proximity over the long term, it's essential to take care of customers, listen to them, offer the best products... But it's difficult to be on all fronts when you're an e-tailer. That'swhy outsourced logistics is booming: it enables brands to concentrate on selling their products and their customers. While logistics service providers take care of all or part of the logistics .

There are different types of logistics provider:

So, have you thought about outsourcing your product storage and transport, with a 2PL (Second Party Logistic) partner? Or entrusting transport, storage, order picking and strategic optimization to a 4PL provider?

There are many advantages tousing one of these forms of outsourced e-commerce logistics:

• Lower costs : savings are passed on not only in structural costs, but also in staff recruitment. By reducing internal logistics costs, you improve your profitability. An important point, at a time when almost 12% of e-tailers are unprofitable due to logistics costs linked to distribution, in particular! (Logistics Bureau)
• Saving time : outsourcing your logistics gives you the time to concentrate on your core business. So you can develop your product, marketing and sales strategy without pressure.
• Greater customer satisfaction : entrusting your logistics to experts also means benefiting from their know-how. This reduces the risk of problems linked to product loss or delivery errors. A partner like Rakuten Fulfillment Network can even help you reduce your delivery times: when you know that delivery times are the second leading cause of shopping cart abandonment on e-commerce sites, according to Sendcloud (2023)... It's a good idea to do everything you can to convert your customers, then build their loyalty over the long term!

5. Rakuten Fulfillment Network: an asset for D2C

For the past ten years, Rakuten has been helping brands capture the hearts of their customers through a D2C approach. Companies like Emma, SEB and Kusmi Tea rely on our marketplace to speak directly to their buyers... And to our 13 million regular buyers.

In addition to the marketplace, Rakuten offers a whole range of services, such as the Rakuten Fulfillment Network. The principle is simple: you entrust us with your logistics. We manage it for you. And you benefit from the results, such as an average saving of 25% on your logistics costs!

Rakuten Fulfillment Network takes care of the storage, packaging and shipping of your products: you choose, our logistics service is flexible and scalable to your needs. You can, of course, controlalllogistics remotely, and keep a real-time eye on your inventory from a centralized location .

Thanks to this logistics partnership, your customers also benefit from quality service. 99.8% of orders placed before 2 p.m. are delivered within 24 hours, to the delight of your busiest customers!

You've got it: with Rakuten Fulfillment Network, you don't have to worryaboutstock-outs, packaging or shipping. Our network of warehouses and logistics partners is there for your products. We manage the logistics of your e-shop for you, and you benefit from a real competitive advantage over other D2C brands.

In addition to standing out from competitors and satisfying customers, some brands that choose Rakuten Fulfillment Network even multiply their sales by 10! Let's find out more.

6. D2C logistics: the case of Dreame

Dreame is a Chinese company specializing in high-end household appliances. As the company seeks to conquer the French market, it faces a major logistical challenge: delivery times .

Before placing its trust in Rakuten Fulfillment Network, Dreame's delivery times were between 7 and 10 days .Yet, according to McKinsey, 44% of buyers say they don't want to wait more than two days to receive an order! To speed up and simplify its entire logistics process, Dreame joined the Rakuten Fulfillment Network.

Results:

• 5x faster delivery: from 10 to 2 days, from China to France!
• A 10-fold increase in sales: thanks to more attractive delivery times, French customers are more likely to buy, which considerably boosts the company's sales.
• 200-fold increase in visibility: by selling on our marketplace, Dreame has access to over 13 million connected customers. This increases visibility, credibility and brand awareness.

Would you like to take advantage of a turnkey logistics service for your D2C business? Follow in Dreame's footsteps, and turn your e-commerce dreams into reality:

by Haro Valentin

D2C: advantages, challenges and keys to success in direct sales

It's a model that appeals to consumers and brands alike: Direct-to-Consumer (D2C). Booming in recent years, this business model is simple. It enables a company to sell its products or services directly to consumers, without any intermediaries.

By 2022 ,57% of multinational companies had invested heavily in this strategy. As for buyers , 80% are expected to make at least one purchase via a D2C brand in the next 5 years. The revolution is underway, especially in the world of e-commerce. But what are the keys to the success of this Direct-to-Consumer model? All the answers from Rakuten are in this article.

I. Differences between B2C, B2B and D2C

The Direct-to-consumer model breaks the codes of traditional commerce. What makes it special? Itenables brands to sell their products directly to consumers, without the need for distributors, wholesalers or supermarkets. More commonly referred to as D2C... not to be confused with other acronyms, such as B2B and B2C.

B2C refers to the direct sale of products or services from a company to an "individual" consumer. Nike, Le Slip Français or Zara are "Business to Consumer" brands.

Conversely, B2B corresponds to transactions between companies. We speak of "Business to Business". For example, Salesforce is a B2B company, selling its software to other companies.

II. What are the advantages of the D2C model?

By choosing the Direct-to-Consumer model, brands establish a direct relationship with their customers. There are no intermediaries to disrupt the buying experience, which not only promotes proximity, but also personalization of the relationship .

Data collection is also direct, enabling the company to get to know its customers better, so as to offer them offers as personalized as the relationship itself. The company can easily demonstrate continuous improvement, and innovate to rapidly improve customer experience and satisfaction .Total control!

What's more,a D2C business has great flexibility: it's free to set its own prices, regardless of the margins of certain intermediaries. This flexibility has an impact on the company's profitability, since it can achieve a higher margin on its products.Stock-outs are also less frequent. Finally, a D2C company can also accelerate the time-to-market of its products, and grow faster..

If the D2C strategy is effectively executed. But this model isn't magic: there are many challenges to overcome!

III. Challenges of the D2C Model

In the retail sector, and especially in e-retail, the D2C model poses a number of challenges. Whether you're a new Direct-to-Consumer brand, or a company already on the market that wants to move towards this approach.

Let's take the example of a brand that wants to launch its own online store, selling directly to consumers. The work involved is colossal: investing in the right technological platform, recruiting a team, building and maintaining the entire brand image, guaranteeing quality customer service... This is not an approach to be taken lightly!

In today's saturated digital space, developing a visibility strategy can be perilous. And costly. How do you stand out from the competition? How can you attract new buyers with a sound marketing and communications strategy, without incurring extra costs?

And then there's the question of logistics. Will you be able to manage the ordering, stock management and delivery system? Quite often, brands prefer to rely on a logistics solution, such as Rakuten Fulfillment Network, to manage this part of their business.

A logistics service of this kind cuts costs, offers responsive customer support, and takes care of packing, shipping and tracking orders and stock. Perfect for focusing on what a D2C brand does best: selling.

IV. Key success strategies for D2C companies

• Creating a targeted marketing strategy

The Direct-to-Consumer approach requires you to know your customers inside out. Once you've created your marketing persona, you'll be able to develop a targeted marketing strategy .

It's an essential step if you want to get to the heart of your customers! And this is where the most successful D2C stores stand out. They avoid mass marketing, in favor of personalized campaigns. They also createengaged communities on social networks, with consumers who share the same values .

Within these communities, the most loyal customers often become ambassadors. They are the ones who take over the brand's marketing actions, thanks to word-of-mouth and the creation of UGC (User Generated Content).

One of the key success factors for D2C companies is therefore the power of their marketing, and the commitment of their community, particularly online .

• Delivering a flawless user experience

Consumers have too often been disappointed by brands that don't respect their commitments... Like delivery time. 57% of online shoppers consider delivery time to be an important criterion in their purchasing decision (source: Fevad). So, where brands with a D2C model stand out is when they honor an irreproachable customer journey. From A to Z.

Indeed, successful Direct-to-Consumer brands tick all these boxes:

• An e-commerce site with a simple, fluid customer journey
• A responsive design, on computer, mobile and tablet
• A reliable payment system
• Personalization throughout the purchasing process
• Impeccable customer service

This last point is essential, to contribute to the e-reputation of online stores. 55% of consumers are ready to recommend a company if its customer support is exceptional, according to Zendesk .

• Develop a data-centric approach

46% of D2C brands rely on consumer data to personalize the customer experience and improve the buying journey, according to Stirista (2021). Companies that favor direct sales have understood: better customer knowledge is a key success factor!

As long as information gathering is carried out in compliance with RGPD rules, brands have every interest in becoming "Data Centric". Data linked to purchasing behavior and preferences allow us to better understand our customers... And anticipate their needs.

Indeed, successful D2C brands no longer hesitate to develop a predictive approach, to improve the shopping experience. Predictive analysis also helps toanticipate demand, and thusimprove inventory management and the supply chain. A real winning bet, to minimize risk and maximize profitability.

V. What does the future hold for the D2C model?

Direct-to-consumer commerce is often heralded as the future of e-commerce. The DNVB and ONVBbrands are contributing to the growth of this ecosystem, combining a 100% digital and 100% direct presence . On a larger scale, 80% of brands (who are not necessarily D2C) believe that this model has an impact on their business, according to a study by Club CMO and Epsilon-Conversant. The conclusion is clear: Direct-to-Consumer is a golden opportunity, but also seen as a threat, for more traditional players.

In the post-Covid era, this trend towards D2C commerce has increased in particular. And with the rise of e-retail and increasingly connected consumers, forecasts seem rather optimistic: this model should continue to develop... Under certain conditions.

First of all,ignoring technology will no longer be an option. Equipping yourself with the latest technologies, to deliver a unified omnichannel experience, will become a necessity. What's more, the D2C model should evolve towards a more open form: tomorrow, the idea will no longer be to refuse all intermediaries... But rather toaccept intermediaries who take growth to another level, without compromising the direct relationship between brand and buyer.

This isprecisely what the 12,000 professional sellers, who offer their products to 13 million buyers, can find on our Rakuten platform. Thanks to the Rakuten Fulfillment Network, brands can benefit from improved D2C logistics... while maintaining a quality relationship with their buyers.

VI. Examples of successful D2C brands

There are many success stories in the D2C world. They cover a wide range of sectors. Ready-to-wear brands includeSézane and Le Slip Français. In bedding ,Tediber. In eyewear ,Jimmy Fairly. Or Miliboo, for furniture. Some brands, such as Bergamotte, are even breaking new ground in the very traditional world of florists .

All these brands rely on digital channels (website and social networks) to make themselves known... and recognized. Most are also banking on a recurring revenue stream, thanks to subscription sales.

At the same time, other success stories are emerging in D2C, from larger, more traditional players. This is particularly true of certain sports brands, which are making the transition to this more direct model.

For example, by positioning itself more on the direct sales market, Nike multiplied its D2C sales by 6.6 between 2010 ($2.5 billion) and 2021 ($16.4 billion). This represents just under 40% of its overall revenue stream. Which means that 60% is still generated by relying on key partners (physical or online resellers). And that reminds us of another success story..

Image source: Inside, 2023.

VII. Rakuten and Direct-to-Consumer

For decades, Rakuten has been helping brands capture the hearts of their customers through a D2C approach. Brands such as Kusmi Tea, Emma and Proline have chosen our marketplace to address their customers directly.

What motivated their choice: the possibility of creating a real sales and communication channel within our marketplace. Indeed, every Rakuten seller can create a personalized e-shop, to control their brand image, improve the customer experience and highlight their best offers.

In this way, brands create their own highlights on Rakuten. This is the case for Groupe SEB, which has created the 7 jours imbattables: a week dedicated to products from the Rowenta, Moulinex and Tefal brands, promoted to our 13 million recurring buyers.

Joining forces with a partner like Rakuten enables us to meet the major challenges of D2C, thanks to an already large and loyal audience and ready-to-use communication channels.

Rakuten: a key partner for your D2C strategy

Today, marketplaces play a central role in business growth. by2022, 67% of e-commerce sales will have been made on marketplaces, making them a significant sales channel, especially for D2C brands .

For example, by becoming a seller on our Rakuten marketplace, an e-commerce player can reach 13 million regular buyers. And unlike most marketplaces, we don't sell products: all our efforts are focused on your success, directly with your customers!

In addition, Rakuten offers a whole range of services, from e-commerce logistics with Rakuten Fulfillment Network (the leading marketplace for 4PL logistics) to drive-to-store. You give your products the visibility they deserve, and we take care of the rest. Packaging, shipping, order tracking... Your customers are satisfied, and your schedule is relieved. 99.8% of orders placed before 2pm are even delivered within 24 hours, to delight your most hurried customers!

Click here to open an online store and sell your products directly on Rakuten:

by Haro Valentin

Shipping method: Which one to choose for ecommerce in 2024?

As well as keeping delivery times to a minimum, attracting the largest possible number of consumers means carefully choosing the shipping method best suited to your business and the expectations of Internet users. Discover our tips to help you find your way around, win over a growing number of buyers and, better still, quickly win their loyalty.

Shipping method: definition

In ecommerce, shipping method refers to the method chosen to transport products from the seller to the buyer, once the purchase has been made.

There are many different shipping methods, including home delivery, drop-off or by appointment, and the choice of shipping method is an important factor in ensuring an effective conversion rate for your online store.

Why is it important to choose the right shipping method?

The shipping experience plays a major role in acquiring and retaining new customers.

For example, 35% of online shoppers cancel their purchase if the advertised delivery time is too long. You need to be able to offer a shipping method that's adapted to your most urgent customers.

Also, for 85% of online shoppers, it only takes one bad shipping experience to dissuade them from ordering from a vendor again. That's why you need to offer shipping options that suit the different preferences of your buyers.

This is true whatever your business, whether you're an ecommerce pure-player or a brick-and-mortar business with an online operation.

The 6 different types of shipping methods

With so many options to choose from, it's hard to find your way around? Here are the main shipping methods for your online business:

Home delivery

Preferred by 85% of online shoppers according to the FEVAD/Médiamétrie barometer, home shipping is more topical than ever with the explosion in telecommuting since the health crisis.

With no need to travel, you can receive your parcel directly at home, saving you a considerable amount of time and making this type of shipping the most popular.

Relay point shipping

The 2nd most popular shipping method for online shoppers, relay point is particularly popular with working people who want to pick up their purchases close to their office or home as soon as they have the time.

Packages are generally stored for 14 days, giving the buyer plenty of time to collect them. It's also a more economical option for retailers, as it reduces the need for carriers to travel, eliminating the last-mile stage.

Express delivery (or same-day delivery)

In addition to the purchase price, one of the greatest expectations of e-consumers is the shipping time of their orders. The longer the shipping time, the lower your chances of converting.

Express delivery, either to your home or to a relay point, is an excellent way of attracting a majority of Internet users, who are anxious to receive their product within 2 working days, or even the same day.

Standard delivery

Less expensive than the express version, standard delivery is more time-consuming in terms of order reception, but generally more economical for buyers who are in less of a hurry to receive their parcel.

There's no obligation on the part of the retailer to deliver within 48 hours, or even several weeks (although we wouldn't recommend waiting that long!)

Delivery by appointment

This alternative meets consumers' ever-growing need for efficiency and adaptability on the part of online businesses. With delivery by appointment, the buyer decides the date, time and place of receipt of his order. Professional logistics are essential here.

In-store collection (click and collect)

Although not strictly speaking a shipping method, click & collect is becoming increasingly popular with online shoppers, as it offers a number of advantages. If you have a collection point in your physical store or directly in your warehouse, don't hesitate to offer this alternative, which is free for both parties.

At Rakuten, all sellers on our marketplace can activate the click and collect option free of charge, whether you have one or three million points of sale!

It's important to always give consumers a choice, not just offer them standard delivery or delivery to a relay point. The right balance would be to offer the option of home delivery or relay point delivery, as well as trying to reduce delivery times as much as possible to meet the urgency of certain online purchases.

Shipping methods: criteria to consider

To maximize customer loyalty and budgeting, you need to take the following factors into account:

Cost : the aim here is to offer consumers the lowest possible shipping charges, while making the most of each shipment to ensure optimum sales. The cost of a shipping method will generally vary according to the weight and size of the product (a bulky product will cost you more to ship than a USB flash drive), the number of shipments according to your sales, the insurance taken out on the product and the speed of delivery.

Speed: as we've said, in most cases, a loyal customer is a buyer who, among other things, receives his parcels quickly, very quickly

Reliability: Whether your company takes care of the transport of orders itself, or you use a transport professional such as UPS or Mondial Relay, respect for products and delivery times is not to be taken lightly.

Flexibility: Adapting to consumer demands doesn't have to cost you money. So, for example, in the case of a delivery by appointment that is not honored by the buyer, don't hesitate to drop off the order at the nearest partner relay point to save yourself a second visit.

Ecological impact: Scrutinized with interest by the younger generation, ecology is playing an increasingly important role in purchasing habits in France. Fewer journeys, less carbon impact from transporters... These are all new factors to take into account, which can, if properly managed, save you money and win you new customers.

Depending on your business and your clientele, some of these criteria may be more important than others. So it's vital to evaluate them carefully, so you can choose the shipping methods that best suit both your needs and those of your customers.

Our tips for attractive shipping options

Give your customers a choice

Don't settle for just one shipping method! Every consumer has their own habits, and it's important that your sales strategy takes this into account, whatever your sector.

Offer at least one option for express delivery and standard delivery, and at least one option for home delivery and relay point delivery.

Offer different price ranges

As with the shipping options, it's important that this choice is also reflected in the possible prices. An express home delivery will cost more than a standard delivery, while a point relais is generally the most advantageous because it's less costly on the seller's side (as it's a mode that limits carrier travel).

What about free shipping?

Offering free shipping is always a great way to stand out from the crowd and boost your online store's conversion rate. And it's perfectly possible to offer this option without breaking the bank, by opting for free delivery above a certain purchase amount or number of items, or limited to certain destinations such as mainland France. In-store collection is also a simple way of offering free delivery.

We give you all our advice on the subject in this article on free shipping.

Outsourcing your ecommerce logistics: the most efficient way to find your way around?

Whether it's a question of significantly improving inventory management, cutting logistics costs as far as possible, or getting the most out of reverse logistics, outsourcing is a highly advantageous option for many online businesses. Provided you choose the right e-logistics provider..

With Rakuten Fulfillment Network, you can rely on a major player in French ecommerce to support you on a daily basis. Whether you're setting up your online store, warehousing your goods or handling deliveries and customer returns, our turnkey services can be tailored to meet your every need. All at a clear price, with no hidden charges. For more information or to request a quote, click here!

by Haro Valentin

How can you reduce delivery times?

Among the many challenges retailers face in boosting their business, delivery times are one that cannot be ignored. Today, failure to keep delivery times as short as possible increases the risk of losing buyers, who are always on the lookout for an offer that mentions both low delivery costs and rapid dispatch of their parcels.

After explaining in detail the benefits of outsourcing your e-commerce logistics and learning how to choose the right logistics provider, find out how to satisfy your customers by easily reducing your delivery times!

Why is it so important to reduce delivery times?

For better customer service

Delivery times play a critical role in your customers' decision-making. according to a McKinsey study, 35% of online shoppers cancel their purchase if the delivery time quoted is too long.

Similarly, 44% of online shoppers say they don't want to wait more than two days to receive their order (Statista, 2022).

To avoid losing potential customers, your delivery times had better be as short as possible!

Gain in competitiveness

In the 21st century, attractiveness depends on responsiveness. So, among the factors that can win you customers, delivery times are more than ever a major growth lever for a company.

As short as possible delivery times will halve the risk of buyers abandoning their shopping baskets. On the other hand, delivery times in excess of 3 days can be one of the main obstacles to business growth.

In addition to the price of your products on sale, being competitive also involves delivery speed.

To save on your logistics costs

It may seem counter-intuitive, but faster delivery can lower your logistics costs.

The faster your products are delivered, the less time they spend in your warehouses, and the lower your storage costs. You'll also be able to manage your inventory more flexibly, in line with your requirements.

But reducing your lead times is no mean feat. Here are a few tips to help you do just that.

How to reduce your delivery times?

1. Optimize your inventory management

Out-of-stock situations are one of the main causes of delivery delays.

Good inventory management enables you to anticipate potential stock-outs and ensure the continuity of your e-commerce logistics. (Conversely, it also helps you avoid overstocking and increasing your storage costs)

To do this, you first need to define the right storage method. For example, you can use the minimum stock method.

This method consists of replenishing your stocks as soon as the quantity of a product falls below a minimum threshold. This minimum stock must be able to continue to satisfy demand (even in the case of unforeseen events such as a peak in demand) until the stocks are replenished.

However, this method requires you to be able to monitor your stock levels in real time!

2. Anticipate peak periods

Whatever your sector, your demand is bound to depend on peak periods throughout the year.

Whether it's sales, Black Friday or key moments in the year such as the start of the new school year or the beginning of summer, you have order peaks that you need to meet on time.

A poorly-prepared rush period can quickly turn sour if you can't deliver on time!

By anticipating these sales trends, you can adjust your stock levels in line with the various foreseeable sales peaks, and put the necessary resources in place to guarantee adequate customer service.

3. Store your products as close as possible to your customers

The shorter the distance between your stock and your customers, the faster your deliveries will be.

Analyze your orders by city and delivery region to identify the geographical areas where you have the most customers.

You'll then be able to choose the most suitable partner based on its warehouses. By choosing a partner with several warehouses in different geographical locations, you'll benefit from better coverage and therefore faster delivery times.

4. Cut out the middleman

The more different players you have in your supply chain, the greater the risk of delays and longer lead times. By choosing complete intermediaries who take care of your entire logistics chain, you avoid multiplying delays between each stage of the process.

5. Automate order management

By relying on automation technology such as ERP, orders from all your sales channels will be recorded and communicated to your carrier automatically. You'll no longer lose time due to delays in internal communication between the various stakeholders.

6. Outsource delivery to a 4PL provider

A 4PL provider acts as a single intermediary for your logistics. It's the ideal partner for outsourcing all levels of your shipping, storage, delivery and customer returns processes.

For example, if you're a user of Rakuten Fulfillment Network, our e-commerce logistics service, you can outsource your entire supply chain and ensure rapid service to your customers

This enables our customers to offer efficient delivery to their buyers and build loyalty through a smooth experience. If you'd like to find out more, please don't hesitate to request a quote!

by Haro Valentin

What is 4PL logistics? Definition and benefits

Outsourcing part or all of your e-commerce logistics is considered by many specialists to be an excellent strategy when you want to save time and optimize your company's profitability. And in many cases, this outsourcing involves what is known as 4PL logistics.

Find out more about the definition, advantages and implementation of outsourced logistics, which will enable your business to develop under the best possible conditions.

What is 4PL logistics?

A 4PL(Fourth Party Logistics) provider is an intermediary in charge of a company's entire logistics operation. Its aim is to manage and optimize the entire supply chain.

It acts as a single point of contact for its customers' logistics needs, managing all links in the chain (carriers, warehouses, after-sales service, etc.) and all stages (storage, preparation, dispatch, customer returns).

What are the differences between 3PL and 4PL logistics?

During your research, you may also have come across the term 3PL logistics (for Third Party Logistics), which is another type of service provider for outsourcing logistics. And the difference between 3PL and 4PL can sometimes be blurred. Let's take a look at the differences.

Different levels of outsourcing

Whereas a 3PL offers you partial outsourcing of your logistics, focusing on specific tasks, a 4PL offers you complete outsourcing, as its service encompasses the entire supply chain.

Execution versus optimization

A 3PL provider handles the execution of your supply chain, concentrating on day-to-day operational tasks. The advantage of a 4PL is that it's a strategic relationship, aimed at optimizing your logistics. It will know how to make the best providers and decisions according to your needs.

The relationship is therefore different. With a 3PL, the relationship is transactional, driven primarily by storage and delivery costs. With a 4PL, the relationship is partnership-based and long-term, guided by the optimization of your service.

A single point of contact

A 4PL acts as a single point of contact for all your logistics needs, for you and your customers. Acting as an intermediary between the various players involved in your logistics, it will be able to escalate your questions and needs to the right contacts. With a 3PL, you'll have several points of contact to manage, multiplying the back-and-forth on your side.

Available resources

3PLs often have their own fleet of carriers and warehouses. 4PLs don't usually manage any resources directly, but work with a network of partners. This enables them to have an objective view of a particular service provider, and to choose those who are best suited to your business.

What is the role of a 4PL logistics provider?

The role of a 4PL can be categorized into several points:

Managing and optimizing the supply chain

A 4PL coordinates and integrates all supply chain operations, while analyzing and optimizing the chain to improve efficiency, reduce costs and increase customer satisfaction.

Coordinate logistics partners

The 4PL is responsible for selecting and managing relationships with 3PL suppliers, as well as with other suppliers and partners. This includes negotiating contracts with logistics service providers, ensuring compliance and performance.

Providing strategic advice

In addition to operational matters, the Logistics Manager's role is to provide strategic advice to improve logistics operations in line with the company's business objectives. He supports his customers in their development by offering a flexible service, adapting to their growth or changing needs.

Providing state-of-the-art service

The 4PL uses advanced tools to track inventory and shipment data. It uses the analysis of this data to make more informed decisions, anticipate market trends and respond proactively to logistical challenges to avoid problems such as stock-outs.

What are the advantages of outsourcing logistics to a 4PL?

For a company wishing to outsource its warehousing and order dispatch, the 4PL model offers a number of advantages.

Valuable time savings

By connecting you to an entire network of logistics partners, 4PL means you don't have to deal with multiple service providers. This single point of contact enables you to monitor and manage your logistics efficiently. And you can easily refocus on your core business by delegating all those time-consuming tasks.

Lower logistics costs

Reducing your logistics costs by avoiding the need to invest in additional warehouses, equipment and personnel, and by not multiplying the number of external service providers is one of the major advantages of the 4PL, for which cost reduction is one of its objectives.

Greater logistics efficiency

Operators specializing in Fourth Party Logistics have the expertise and experience to optimally manage the storage, transport and distribution of your goods. As a result, your customers are delivered in the best possible conditions.

Flexible service

The high degree of flexibility offered by this operator increases your responsiveness to fluctuations in demand, which can occur, for example, during key shopping season events such as Sales and Black Friday.

How does the 4PL process work?

Let's take a look at how working with a 4PL provider works. Let's take the example of an e-commerce company, a sector for which 4PL is particularly well-suited.

1. Transporting your products

The 4PL coordinates the reception of your products, from the manufacturer or your premises, to one or more warehouses managed by a 3PL company.

2. Product storage

The 4PL manages the storage of your products, and keeps track of its stocks. During this stage, you will generally only be invoiced for the volume of products stored and the length of time they have been in stock, saving you money compared to renting your own warehouse.

3. Order picking

As soon as you receive a new order, whether from your e-commerce site, a marketplace (e.g. Rakuten) or another sales channel, it is transferred to the 4PL, which will pack and prepare it for delivery.

4. Order dispatch

Finally, the order is dispatched, according to the delivery method predefined by you and chosen by your customer (Express, Standard, Registered, etc.). The end customer can also track the delivery status of his order in real time.

5. Customer service and returns

If your customers have a question or a problem relating to delivery, the 4PL will take care of after-sales service for you. Also, if they wish to return a product, this will be handled by the 4PL.

4PL for the retail and e-commerce sector

The majority of e-commerce players turn to 4PL providers for their logistics, as they are unable to internalize this aspect, due to lack of time and resources. To adapt to new consumer habits, retailers are also turning to them to add online sales to their distribution channels.

The 4PL is therefore particularly well-suited to this sector, as it provides the strategic vision needed to manage all the different flows of demand across these different channels. It's a logistics model that adapts to the volatility of online consumers, with particularly high flows during peak periods such as sales and the end of the year, and lower flows during other periods.

When should you use 4PL logistics?

Here again, there are many possible scenarios. We have selected 6 of the most important for you to consider:

• Your company is becoming more attractive , and sales volumes are increasing. Problem: managing the storage of goods and the processing of orders is becoming complicated.
• Supervising logistics operations is by no means your core business, and you want to devote most of your time to developing new customer acquisition strategies.
• Warehousing your own inventory is becoming costly and/or time-consuming.
• Conquering new markets, reaching more consumers nationally and internationally, is one of your priorities. The network of sites provided by the 3PL enables you to do just that.
• For you, reducing delivery costs and times is a priority area for improvement.
• The return of parcels is becoming too complex to handle.

Why choose Rakuten Fulfillment Network for your 4PL logistics?

We're well aware that choosing the right service provider to outsource all or part of your logistics is no easy task. It can even be a source of stress for many entrepreneurs and business leaders.

As a major player in e-commerce for several decades, Rakuten is aware of this problem and has decided to support you with the Rakuten Fulfillment Network, a turnkey solution with no hidden costs that takes charge of your e-logistics and supports it as the market changes.

In a nutshell, Rakuten Fulfillment Network is :

• Save time and money managing your logistics;
• Reduce the time it takes to deliver your orders;
• Control your digital growth;
• An increase in acquisition channels via your own website, our e-commerce platform and all other marketplaces;
• A dedicated account manager to support you in all your endeavors.

by Haro Valentin

Out-of-stock: our tips for avoiding it

Out-of-stock: just three words that can make companies - and their customers - tremble. An out-of-stock condition is the temporary unavailability of a product. This situation is damaging: 7 out of 10 consumers become less loyal when products are out of stock too frequently (source: OpinionWay study, 2024) .

In e-commerce or marketplace, the stakes are high. Inventory management must be an absolute priority, to maintain growth, win new customers and retain old ones. So how do you manage your product stocks and avoid stock-outs? Discover all our advice, as well as a case study at the end of the article. We're off!

I/ A key calculation to know: the out-of-stock rate

An out-of-stock situation is an event suffered by a company. It is neither planned nor deliberate, unlike stock clearance (which corresponds to a deliberate strategy, for example linked to the liquidation of an old collection).

In theevent of an out-of-stock situation, the risks are numerous: customer dissatisfaction, loss of sales, damage to brand image... To avoid repeated out-of-stock situations, here's our advice: know your out-of-stock rate .

The out-of-stock rate is an important KPI in e-commerce, for measuring the efficiency of your logistics. It measures the frequency with which a product is out of stock. The higher the rate, the more frequent your stock-outs... And the more they will impact your growth, while increasing your costs.

The out-of-stock rate is calculated as follows: (number of orders not filled due to out-of-stock situations / total number of orders) x 100

You can also use the following formula:

(Sales shortfall / Total sales) x 100

Your mission: to keep stock-outs as low as possible, and ensure that your product references are always available in the warehouse! Optimizing inventory management is no longer an option... At the risk of facing a number of impacts.

II/ E-commerce stock-outs: the main causes

But why can an e-commerce site run out of products? Here are the main reasons for this phenomenon:

• Transport and logistics difficulties

Transport delays can occur due to logistical problems, weather conditions or customs regulations. These situations affect the supply chain, and the timely arrival of goods. Often, it's just a matter of time: knowing the exact cause helps reassure customers!

• Discrepancies between theoretical and physical inventories

The error is human... Or computerized. It often manifests itself in the form of inventory errors. Discrepancies between the data recorded by the computer and the actual inventory on hand can lead to inaccuracies in the number and availability of products.

To avoid these errors, did you know that Rakuten Fulfillment Network takes care of every stage of your e-commerce logistics? On our marketplace, sellers are supported by our after-sales service, to avoid the unexpected.

• A sudden increase in demand

Stock-outs can be triggered by strong customer demand. This situation is beyond your control: a buzz thanks to an influencer? A special event? When demand rapidly exceeds supply, stock-outs are commonplace.

This was the case for Stan Smiths when they were reissued, for certain Apple products... Or even for packets of pasta during the Covid-19 health crisis!

• Supply chain problems

The supply chain relies on a number of different players and stages. The most frequent failures are production interruptions or shortages of raw materials. Wood, paper, aluminum, rubber... Certain materials are becoming scarce. It's time to innovate, to limit these problems!

• A slowdown in supply processes

Stock replenishment can be affected by abnormally slow order processing. This may be due to inefficient internal processes, or to slowness on the part of suppliers. The result? Product inventories shrink, to the point of running out.

• Incorrect order estimates

Another common cause is poor analysis of sales trends, or miscalculations that distort order forecasts. Incorrect order estimates can also be linked to a lack of internal communication. In this case, product stocks can quickly run out, or be underestimated.

Conversely, an overestimation of stock requirements can always result in a flash sale. It's one of the best ways to clear product stocks in e-commerce!

• Lack of supplier flexibility or reliability

The supply chain involves many players, including suppliers. If the latter are not reactive, or unable to meet your demand, stock-outs occur as a result.

Before calling on a supplier, here are a few key indicators to measure its reliability: the company's financial health, any certifications and industry standards, its online reputation, its value for money..

• Poor just-in-time inventory management

If your company operates on a just-in-time basis, it will prefer to keep stock levels to a minimum, in order to reduce costs. This logistics strategy involves sourcing goods only when they need to be dispatched.

But beware! When demand peaks, and sales seasonality is at its peak, this kind of inventory management can lead to stock-outs. To avoid this, Rakuten Fulfillment Network takes care of your logistics.

III/ E-commerce: what are the impacts of an out-of-stock situation?

Today ,better inventory management is essential to avoid stock-outs. The impacts of stock-outs are numerous. Faced with increasingly intransigent and demanding customers ,lack of availability is considered the second major irritant when purchasing a non-food product, just after lack of price! (Source: Opinionway survey, 2024).

According to the same study, consumers even consider stock-outs to be unacceptable. In the electronics sector, nearly one customer in two (44%) denounces this situation as unacceptable. What are the consequences? Stock-outs undermine customer satisfaction, customer recommendation and loyalty. The company's reputation can also be tarnished by bad customer reviews. This negative impact on brand image can be limited, however, if the unavailable product is listed in another store, according to 7 out of 10 customers.

On the brand side, inventory management problems are detrimental to sales and profitability. It's a drag on growth, but also a major logistical cost. In a hurry and in a hurry, some brands resort to accelerated transport solutions for supplies, to a new supplier, to ordering substitute products... All these emergency solutions have a cost. Or even a surcharge!

Faced with these logistics costs, new solutions are emerging. Like cross-docking. Cross-docking enables supply flows from suppliers and delivery flows to customers to be "crossed" at a single location (called a distribution center). This method makes it possible to combine several goods in a single mode of transport. The result? Savings in time, money and storage problems!

IV/ 5 tips to avoid stock-outs

1- Improve sales forecasts

Rely on the figures: what were last year's sales trends? And what is the life cycle of your products? What are the sales peaks in your market? You can also define your merchandise turnover rate or stock coverage (number of consumption days the company can cope with).

All these short- and medium-term forecasts enable you to optimize the quantity of merchandise you need, so that you always have stock on hand.

2- Optimize inventory management

Poor inventory visibility is often the cause of stock-outs. To avoid this, your inventory of available products must be carried out regularly and meticulously. Various methods exist, such as the perpetual inventory strategy (achievable thanks to inventory control automation software).

For even greater simplicity in controlling and managing your inventory, you can also place your trust in the Rakuten Fulfillment Network. We manage your stock and inventory. And with Rakuten Fulfillment Network, 99.8% of orders placed before 2pm are delivered within 24 hours... without the hassle of stock-outs!

3- Keep a safety stock

If your cash flow allows it, a safety stock is an interesting option: it allows you to take into account the margin of error, and always have availability to respond to unforeseen surges in demand. Without cluttering up your storage space, this limited stock enables you to limit undesirable situations.

As soon as you are forced to "dip into" this safety stock, the alarm is sounded: it's time to restock!

4- Strengthen supplier relations

Reliable, responsive partners are essential to efficient logistics. Before choosing a supplier, evaluate all the potential risks, depending on the supplier's location, the country's economic and political context, transport conditions, the various stakeholders, the supplier's reputation... All these elements need to be taken into account, before choosing the right logistics provider .

Then, as with your customers, focus on building loyalty to maintain a long-term relationship!

5- Diversify sources of supply

Having a plan B is an excellent idea, to limit dependencies and logistical risks. So, have you thought about diversifying your sources of supply for your online store? For each product, identify potential suppliers and start discussions with them.

You know the saying: prevention is better than cure... And in e-commerce, it's better to anticipate than to suffer!

V/ Inventory management: how to adopt a proactive approach?

Despite your best efforts, sometimes it's impossible to avoid running out of available products. Fortunately, this situation is temporary. But how do you deal with it? How do you react? At Rakuten France, here's our recommendation: be proactive! This proactivity translates into :

• Transparent communication with customers: there's no point in hiding out-of-stock situations, or products that are "victims of their own success". Be honest. According to a UPS study, 41% of French consumers return later to see if the product is back in stock.
  
• Suggest alternatives: to limit frustration, suggest other products in stock and keep customers on your website. according to UPS,17% of loyal customers buy a similar or different product on the website. Even if you can't fully satisfy the initial demand, don't let the buyer leave empty-handed!
  
• Set upa waiting list: if the consumer really wants to buy an unavailable product, offer to join a waiting list. As soon as new supplies arrive, they'll be alerted first. A good way to win them back.
  
• Update your marketing campaigns: do you have advertising campaigns underway on Google, or on social networks? Watch out for ads promoting products that are no longer available! Be proactive and attentive to ongoing marketing actions, to limit customer dissatisfaction.

VI/ Technologies and tools: how to equip yourself to manage product inventories?

An IT system is essential for organizing and optimizing your supply chain. Especially if your e-commerce site is expanding! Without tools, it's difficult to control logistics flows and inventory. So, when it comes to equipping yourself, have you considered..

• A warehouse management system (WMS): to monitor and control your stock levels in real time.
• Forecasting and data analysis software : providesyou with information on past sales, as well as detailed forecasts to optimize your inventories.
• An integrated inventory management platform : over 12,000 professional sellers have chosen our Rakuten marketplace to sell their products online. By becoming sellers on our platform, they benefit from a fast, reliable and cost-effective logistics solution, including inventory management.

VII/ Inventory management: the case of Dreame

Let's take the example of Dreame, a Chinese company specializing in high-end household appliances. Its challenge? To adapt its e-commerce logistics to direct-to-consumer (D2C) sales on the French market!

In France, customers are demanding, particularly when it comes to delivery times. 44% of shoppers say they don't want to wait more than two days to receive their order (McKinsey). Whereas for Dreame, delivery times to French customers tend to range from 7 to 10 days... The solution? Adapt the company's e-commerce logistics, thanks to Rakuten Fulfillment Network!

By joining Rakuten Fulfillment Network, Dreame was able to simplify its entire logistics process, considerably reducing delivery times.

Results:

• 5x faster delivery: from 10 to 2 days, from China to France! With Rakuten Fulfillment Network, orders confirmed before 2 p.m. can be dispatched the same day, enabling delivery within 48 hours.
• Sales multiplied by 10 : French customers are won over by more attractive delivery times .
• 200-fold increase in visibility: by selling on our marketplace, Dreame has access to over 13 million connected customers! All the more reason to increase your visibility in the eyes of French buyers.

Would you like to take advantage of a turnkey logistics service to satisfy your customers and avoid stock-outs? Our Rakuten marketplace helps you focus on what you do best: selling. And we'll take care of the rest. Click here to discover Rakuten France:

by Haro Valentin

Logistics Outsourcing: A guide for e-commerce businesses

E-commerce logistics present many challenges: finding the time to deal with them, ensuring quality service and controlling costs. And poor logistics will leave a bitter taste in your customers' mouths. So the question arises: should you outsource your e-commerce logistics?

In this article, we'll outline the advantages of outsourcing your e-commerce logistics, and the steps you need to take to do so in the best possible conditions.

What is e-commerce logistics outsourcing?

Inventory management, order preparation, parcel dispatch, after-sales service in the event of product returns... E-commerce logistics (or fulfillment) encompass numerous factors that merchants need to take into account and master. Retailers can choose to manage these logistics in-house, or outsource them.

E-commerce logistics outsourcing is the process whereby a company entrusts the management of its logistics operations to a specialized service provider.

Companies can outsource some or all stages of their supply chain, such as :

• Warehousing
• Order preparation
• Packing
• Shipping
• Customer returns and after-sales logistics

This practice enables retailers to free themselves from logistical constraints and concentrate on their core business, while ensuring a satisfactory delivery experience for their customers. Outsourcing e-commerce logistics offers many advantages!

The benefits of outsourcing logistics

Focus on your core business

E-logistics involves a number of factors, such as stock replenishment, order preparation and dispatch, and renting a warehouse to store your products for sale.

By outsourcing your e-commerce logistics, you leave this time-consuming management behind, delegating these tasks to an external company that makes it a point of honor to save you time and money.

This frees up precious time, allowing you to concentrate on what you do best: selling.

Finding new levers for growth, developing your offer, negotiating prices for new references, uncovering tomorrow's trends... These are all crucial points for a retailer like an e-merchant, which you can address more often by outsourcing your e-logistics.

Benefit from the expertise of a logistics provider

By working with a logistics provider, you benefit from its expertise, network and tools to improve the efficiency of your logistics and transportation.

For example, a logistics service like Rakuten Fulfillment Network gives you access to tools that provide you with real-time information on the status of your stocks, orders and sales. This means you can easily replenish your stocks to avoid stock-outs.

Optimize your logistics costs

Nearly 12% of retailers are unprofitable due to distribution costs. Yet outsourcing logistics can often be more cost-effective than maintaining an in-house logistics infrastructure.

Logistics providers often benefit from negotiated rates and faster handling by their network of delivery partners. So you benefit from faster, cheaper delivery!

You also reduce your storage costs. A logistics service provider will generally invoice you for the storage space actually used, and not the rented space, even if it's not used in full.

Manage variations in activity

Between sales, Black Friday and the Christmas period, online sales experience many peaks, which can put pressure on retailers when they're managing their own logistics.

It's hard to keep up with an abnormally high flow of orders while maintaining the same quality of customer experience. By outsourcing your logistics to a flexible partner, you can choose to be accompanied during these busy times, to make sure you don't lose any business opportunities.

Removing buying disincentives

35% of online consumers cancel their purchase if the delivery times quoted are too long. Your logistics must not only be efficient, they must also be faster than average.

Delivery times and costs can thus become real differentiating factors, so it's important to take care of them.

Improve the customer experience

For 85% of online shoppers, it only takes one bad delivery experience to dissuade them from ordering from a vendor again. Don't risk losing your hard-earned customers because of logistical errors.

By outsourcing your logistics, you ensure that you deliver the right experience, and you entrust the management of your customers' delivery issues to your service provider.

How to outsource e-commerce logistics easily?

Obviously, there's no question of entrusting your logistics to just anyone! It's important to do your research carefully. Here's our advice to guide you.

Define your needs

First of all, read your logistics requirements.

What aspects of your logistics do you want to outsource? What is your average order volume? Which markets do you deliver to? Is international business important to you? What are your current logistics costs?

Compare service providers

It's important to evaluate your logistics provider on several criteria. These may include :

• Delivery times: Make sure the provider can meet the delivery times you promise your customers. For example, with Rakuten Fulfillment Network, 99.8% of orders placed before 2pm are delivered within 24 hours.
• Storage capacity: Evaluate the provider's storage capacity in relation to your current and future needs. Make sure they can handle your growing inventory.
• After-sales service: Does the service provider offer an after-sales service to deal with any logistics problems encountered by your customers? Such a service can free you from a time-consuming aspect of logistics.
• Flexibility: Look for services capable of adapting to your changing needs. They need to be able to handle peaks in demand during busy periods.
• Integration with your e-commerce platform: Make sure the service provider can easily integrate with your online sales system and/or your various marketplaces for smooth communication of orders.
• Costs and pricing structure: Compare the rates and charges of different logistics providers. Make sure you understand the pricing structure, including hidden costs (if any), such as inactive storage charges or return fees. For example, with Rakuten Fulfillment Network you benefit from a simple pricing structure with no hidden costs.

Keep track of your logistics

Once you've selected your service provider and started working together, you can set up routines to monitor your inventory, order and delivery performance, and see the impact your service provider is having on your performance and efficiency.

Why choose Rakuten Fulfillment Network to outsource your e-commerce logistics?

Calling on a major e-commerce player like Rakuten to help you manage your e-logistics means :

• Save time. By delegating the management of your logistics, you can refocus on what's most important: growing your business.
• Rely on e-commerce experts. With Rakuten Fulfillment Network, Rakuten is the first player in Europe to federate an international network of fulfillment experts whose know-how is recognized by their peers.
• Reduce the delivery time of your orders. With Rakuten, every order you place is processed immediately. Shipping is fast, delivery express.
• Save on storage and shipping costs. Our prices are clear and there are no unpleasant surprises. Our partners' prices are also negotiated to reduce your costs as much as possible.
• Increase your inventory. Outsourcing your e-commerce logistics means delegating stock management to a third-party company, enabling you to rapidly increase the volume of your references.
• Boost your sales volume. In line with the previous argument, increasing your inventory will have an impact on your sales volume over the months.
• Control your digital growth. Number of products, stocks, prices... With just a few clicks, make the necessary updates to increase your yield.
• Multiply your acquisition channels. Opting for the Rakuten Fulfillment Network means being able to sell from your own merchant site, your store created on Rakuten and all the other marketplaces that interest you.
• Rely on e-commerce experts. When you call on Rakuten to manage your e-commerce logistics, you're surrounded by dedicated experts, such as an account manager who can provide you with ongoing support, advice and assistance.

by Haro Valentin