It goes without saying that at the heart of innovation, everything begins with an idea. For all business ventures brands decide to embark on, the initial idea must evolve through various stages of conceptualization and innovation before the final product is launched onto the market. While the entire lifecycle of a product being bought and sold digitally via online channels has been commonly accepted as “ecommerce,” it is important to break down the process into smaller segments.
This division of process allows business visionaries to not only break down the company’s goals, but to track the progress of their goals and reinforce their commitment to them. Pre-commerce constitutes the first stage in the lifecycle, and it encompasses all the stages of development from ideation to product. Think sourcing, product design, development and manufacturing. It is where your idea begins coming to life and where your vision starts transforming into a reality.
Evolving design strategy as markets evolve
The first step in product development is a combination of market research and product ideation. In today’s ever-evolving business environment, it is challenging to ideate a product that doesn’t already exist. With thousands of products being pumped into the market annually, consumers are more enticed and drawn toward products that are fresh and operationally different from the rest. While it may be creatively fulfilling to build a never-before-seen product, it may also be effective to build upon already existing products and amplify their value.
Recent B2B and consumer market research conducted by the Royalty Research Center, a consulting and research firm, has shown that as browser cookies begin to phase out, marketers are beginning to increasingly prioritize market research to reach their target audiences in alternative ways and determine contextual segments. For example, in order to understand the nature of the new marketing ecosystem, businesses are turning to AI-driven solutions, primary, and first-party data collection to conceptualize how the market will see their product. Regardless, product creation by nature requires extensive research on the current product market, initial investigation of industry and market trends at hand, coupled with a great deal of patience and resilience.
Pre-commerce largely depends on product design which is the ability to identify a market opportunity, grabbing it strategically to plan a focused end-to-end product development process. When it comes to creating a great product that scales, particularly in the B2B business model, it is important to place product design at the forefront of innovation while simultaneously placing user needs at the forefront of design.
What this means is that the product design, whether it be system, process, or interface design, must have the ability to follow both product evolution and business growth, while constantly adapting to user behaviors. In a sense, it is helpful to view a product as a living being that must sustain a competitive edge in the face of threats and undergo evolution as circumstances change. Similarly, product design aims to align long-term business goals with user experience to optimize production and improve market position relative to competitors.
The emergence of intelligent digitized supply chains
Moving past traditional standards of production and setting new standards in today’s current state of digital supply chain transformation is an essential component of the pre-commerce angle. The last two decades have seen inefficient supply chain management tools negatively impact the ability of businesses to retain consumers and generate revenue growth. Supply chains of the past have been fragmented at best, most due to the nature of who sets them up.
Brands rely heavily on their factory partners to make the best judgment calls on their behalf, which creates disparate workflows and chains within the same brand. The evolution of supply chain management has primarily been credited to the rising ecommerce industry, causing supply chains to become increasingly complex to accommodate for consumer demands.
The modernized supply chain model focuses primarily on the harmonization and communication between the suppliers and brands via cutting-edge technologies such as automation and AI. Today’s supply management toolbox serves to support data analytics and trend forecasting to deliver long-term value to all parties involved. Technological integration into supply chain management allows companies and suppliers to easily navigate their assets, data, and processes on the centralized integration platform. So by having a cloud-based supply chain software that helps streamline design and development needs, companies can increase the speed that products reach the market. Data can help us build better and more circular projects by mapping out component supply chains earlier in the journey, gaining greater control and visibility over peripheral sourcing configurations.
Although sourcing itself as part of pre-commerce is not a new concept, crisis in the last few years has revealed an immediate need for sourcing to be diversified. By definition, sourcing is the set of business processes by which businesses deliver and acquire goods from outside the organization. It becomes more challenging when sourcing occurs in the global marketplace; when product import has to be facilitated between foreign manufacturers and the home country.
Coordinating various sourcing activities between suppliers who may be located in geographically diverse regions and brands, and potentially moving a finished good factory to a new geographic region requires the entire supply chain to be remapped. On top of all processes pre-commerce, this may cause companies to break a sweat. Coordinating complex supply chain functions and sourcing to global suppliers requires an intelligent platform that centralizes all product information onto one data to allow a strong partnership between all parties involved. Diversified sourcing and digitized supply chains are viable strategies to mitigate risk and increase speed to market.
Maintaining agility in the face of competition
Understanding the intricate complexities of the pre-commerce stage and what goes on behind the scenes before a product gets launched onto the market is undoubtedly a strategic differentiator in today’s fast-paced technological industry. It can become very clear very fast how inefficient supply chain models can disrupt both business performance and customer satisfaction, so the growing issue at hand is the need for companies to reevaluate their supply chain and alter it to meet corporate goals.
While all businesses can redesign their supply chains to gain a competitive edge, only those who can crack the code of coordination and information sharing will see improved business agility. There is a commonality between the changing expectations of both customers and brands you partner with: both are demanding visibility, access to high-quality service, and real-time status updates. The use of spreadsheets and emails to manage production functions does not cut it anymore, so data-driven management of supply chains to optimize core aspects of operations has become more emergent.
Planning ahead doesn’t always mean blindly committing in advance or compromising on flexibility to advance speed to market. Rather, gaining the upper hand in the pre-commerce stage starts with the ability to effectively share and track ideation and appraise economic viability for commercialization, starting at the component level of a product.
Kathleen Chan is the founder and CEO of Calico.