Consumer Electronics has been reported to be the fastest growing ecommerce category.  Out of all online Consumer Electronics traffic to retail store sites, close to 50% chose to go to bestbuy.com followed by walmart.com at 20%. It is amazing that close to 70% of all Consumer Electronics ecommerce traffic goes to these two sites alone.

This is just the beginning of ecommerce which will be further evidenced at next weeks Consumer and Electronics Show (CES) in Las Vegas, NV.  Representatives from DCL, a California fulfillment company with offices in Northern and Southern CA, will be attending the show.

Just my 2 cents for the day.

Dave

I’m surprised by the traffic Retail Vision is getting for this consumer product’s show. There is probably the same volume as RV last fall in San Diego. In this challenging economy, show organizers were surprisingly able to get a decent turnout. The mainstays of RV are here as well as many new vendors, start-upper types, trying to get into the retail sales channel. One reason for the good turnout is that vendors need the Spring show if they are to have an inkling of a chance to get into the retail channel for the Christmas season.

There may be other, macroeconomic factors going on as well. When there’s chaos in the economy, there’s opportunity (start-ups), while larger tech companies cut back on marketing spent in a down economy.  Entrepreneurs, many of whom leave these large retail companies, are going out to strike it on their own.  In addition, reflecting on the continued strength of globalization in the retail market, there’s a large contingent of foreign companies and representatives at the event.

What this means is that there is no shortage of leading technology companies, some globally recognizable, that have leaned on DCL for operational advisory and execution. Whether it’s convincing and eventually helping execute a global GPS brand from  moving from in-house fulfillment  to outsourcing fulfillment to DCL, or seeing a now booming green-tech startup go from their garage to high level distribution through DCL, it’s cool to not only see the great technology and products in person, but even cooler when you are able to create operational solutions that help take their companies to the next level.  The list of my favorite products from DCL customers is lengthy, but I can’t reveal much detail…I have competition reading this blog.

Just as DCL started as a diskette duplicator a quarter century ago, other companies are experts in their core competencies but have extended their offering to include fulfillment. My advice to companies looking at outsourcing their fulfillment: look beyond the website and the marketing brochures, do your homework and dig deeper into their core capabilities.  Remember, anyone can “pick, pack  and ship” a product, but how many can ship accurately, on-time, and within a short time frame?

As companies examine their supply chain and fulfillment needs, they are increasingly looking for companies with a Green state of mind . DCL has taken steps towards meeting these expectations. We recently completed the second installation of our Solar panels on the rooftop of our Fremont facility and a larger percentage of our packaging is now recycled materials. Click here for more information on our green intiatives at DCL.

It’s very simple actually. The state of a fulfillment company is actually more reflective of the overall economy than looking at the state of a specific company by itself. You see, if you are looking at one company, you could be looking at a relatively small slice of the entire demographic pie - one market segment, one socioeconomic class, one ethnic group, etc.  In general, fulfillment companies such as DCL can service many customers across a broad spectrum of industries, which is probably a more accurate reflection of the economy as a whole.  Here at DCL, we service approximately 40 customers across the consumer electronics, software and healthcare/medical industries. Some customers are struggling in this environment while others are growing by leaps and bounds. We must manage our business like a portfolio of stocks with one important thing in mind: diversification. You always plan to bring on new customers with winning products in any industry, however, you expect that some customers (for whatever reason) will just not make it.

Today especially, companies are analyzing outsourcing within the context of their strategic direction. With the debt markets tightening, companies that are straddled with any types of debt and fixed costs are having challenges and are seriously considering a variable cost model. More than ever, DCL is uncovering situations where companies have been operating in-house for years and are finally considering outsourcing as a strategic option.

Please read through our Supply Chain commentary, and feel free to post a comment or ask a question.