The Importance Of E-commerce Transparency, Explained

Last updated on May 31st, 2018 at 04:00 pm

Throughout the supply chain – from manufacturer to distributor to retailer to end consumer – the connections between each party are increasingly remote. At a time when ingredients, manufacturers and end consumers may each be in a different continent, maintaining control and visibility throughout the entire network — or e-commerce transparency is more important now than ever before.

There is growing market pressure in favor of transparency. Businesses that convey honesty and openness attract more customers, distributors and retailers favor brands with great reputations, and manufacturers want to establish stable and ethical supply chains. But in eCommerce, visibility throughout the B2B2C network is not just about market desirability, it’s about controlling the lifecycle of a product from manufacture to end consumer and every step in between.

Regardless of the motivation, transparency across the entire e-commerce supply chain has become a key component of corporate integrity, loyalty and sustainability. By investing in a transparent product lifecycle, businesses can improve their strategies in response to market forces, adapt to new regulatory or environmental conditions, optimize pricing and fulfillment in real-time, and inspire confidence in consumers.

Integrity

A truly transparent e-commerce supply chain allows each firm to know and trust their partners, reducing business risk and holding the entire network accountable to corporate responsibility. In addition, being open and honest about operations and partnerships conveys integrity to the end consumers and to any potential future business partners. In this way, transparency both encourages and conveys brand integrity.

For example, outwear company Patagonia takes a proactive approach in the form of their “Footprint Chronicles” project. Each product on Patagonia’s website is supported by a series of videos which show each step of the supply chain. In this way, Patagonia, takes the responsibility on itself to make sure their entire network is consistent with their corporate values. By being open with customers, business partners and shareholders, Patagonia conveys a strong image of integrity.

Loyalty

In e-commerce, conveying brand integrity pays dividends. In the age of customer reviews and social media, brand sentiment enormous power over purchase decisions – and one story about unethical practices by one firm in a supply chain can have irreparable consequences for the entire network. Shopping online is less “personal”, and in response to this consumers are putting more effort into “getting to know” brands. In lieu of face-to-face interactions, consumers are instead gravitating toward businesses that share their personal values.

For example, fulfillment transparency is known to drive loyalty. Business that provide a high level of visibility when an order is in transit have a higher proportion of repeat customers. In e-commerce, drop-shipping and third-party selling can help businesses reduce their overheads, but can reduce both the reseller’s control over their own logistics and the manufacturer’s access to customer data. By investing in a transparent B2B2C supply chain, resellers and manufacturers alike can coordinate and monitor their logistical networks in order to streamline their operations and offer an exception customer experience.

Sustainability

Finally, transparency is of key strategic importance to a firm’s economic sustainability. Supply chain transparency allows companies to receive early warning signs from throughout their network. For instance, when a supplier’s stock can be monitored by a retailer, that retailer can prepare for potential stock issues during high-traffic periods or promotions and can seek alternative suppliers if necessary. At the other end of the chain, manufacturers and distributors that can monitor the end consumer pricing of their products will be made aware of any downward pressure on price which may impact their profitability or the value proposition for their retail partners, allowing them to strategize in response to real-time market forces.

Transparency in e-commerce is not a passing fad – it’s being driven by all sides, from consumer demand to business partnerships to regulatory requirements. When companies are open with both stakeholders and consumers, they invest in integrity, loyalty and sustainability, building trust while also maintaining tight control over the product lifecycle from manufacture to end consumers. Today, a transparent B2B2C network is crucial to economic stability – businesses that don’t strive for visibility throughout their supply chain are not going to survive.