The Effect of Ecommerce on Manufacturing


As a manufacturer, you may not care much about ecommerce. You get the goods produced and it doesn’t really matter to you whether they end up in an ecommerce merchant’s warehouse or on a store shelf. Consumers don’t get much attention from engineers or machine operators — they’re way down at the other end of the supply chain, so who cares?

There’s a point at which cultural changes affect factories, though. And ecommerce is reaching the size and level of influence

Ecommerce sales to consumers passed $300 billion in 2014. In 2015, they hit $341.7 billion. Excluding things like fuel, that’s about 10% of all consumer spending. And government figures show that ecommerce now accounts for more than half of all goods shipped, when you include business as well as end consumers.

A change like that is likely to cause ripples of change even into factories. And it has. CPG companies already have to kowtow to the demands of retailers (including ecommerce merchants) when it comes to packaging and production, and the empowered consumer — fueled by the greater opportunity for two-way communication ecommerce affors — adds another layer of demand.

Naturally, these demands are passed on to manufacturers. Some of the requirements manufacturers have to cope with:

  • Special packaging requirements, including multiple standards for a single product
  • Greater variety and flexibility in case packs
  • Packaging for multiple shipping methods
  • Greater variety of products, meaning smaller runs of each product
  • Increased demand for environmentally responsible processes
  • More iterations and faster redesign cycles

Manufacturers have to be more nimble than they were required to be in the past. Change is a constant, and response to changes has to be fast in order to keep manufacturers competitive.

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