With e-commerce thriving, people more and more intend to buy from online and enjoy lower price and shipping to home. Why online could be lower than store? Decoraport has the slogan 50% lower than store, how it could be? We will analyse the e-commerce power from different points.
Firstly, e-commerce change the management structure and reduce the management level. Before internet exists, all the management system are built by person to person to person. The information is transferred by level to level to level. In internet era, the management relations change, the internet become the centre, so the system becomes person to machine (computer or cellphone or ipad) to person. Basically, all the staff are surrounding and connecting and working with machines. The machines become the main centre not the boss. Therefore, the level is much fewer than before as staff follow the way of machines and even KPI(Key Performance Indication) could be automatically made by machine. So management level is reduced greatly, management cost is cut greatly.
Secondly, e-commerce operation cost is much lower than store. Any store in the world, basically, there are three main functions: storage, showing, cashier. In the middle of city, do you think it is a good idea for storage? The rental is very high but the building clearance height is very low. For showing, store need to present 100% goods, and customers pick and go, however, mostly, e-commerce has no showroom. Even decoraport, what we display in showroom is 2-5% of total SKUs. Customers can get nearly all information online and can come showroom to check the quality, so e-commerce save a lot of showing cost: rental, maintenance, broken, clearance, etc. For cashier, you have to wait and pay in store, and the store need to recruit a lot of cashiers employees and buy expensive cashier machines, but they get nothing for customer information from payments. However, e-commence collect the customer's information and reduce the marketing cost for future.