Technology January 19, 2016 Last updated September 18th, 2018 880 Reads share

How Can the eCommerce Solution Improve the Profitability of Confectionery Makers?

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The eCommerce solution has been a game changer in many different business verticals. Confectionery makers too can join the bandwagon of beneficiaries by digitizing their business models. Given that confectionery makers have to deal with edible food items, they have to operate in an environment that is ridden with challenges on the operations front.

Most business leaders and entrepreneurs who are into the confectionery business consider the operations functions to be the most challenging ones. While operations in the confectionery enterprises can be a challenge, it does not represent the complete picture.

Two Types of Confectioners

Confectionery makers may be categorized into two types according to the market and customer segments in which they operate.

  1. First there are organized confectionery enterprises that manufacture eatables, brand and package those products and sell those products through a chain of retail stores that are spread over a radius depending upon the market that the enterprise wants to capture. In some cases where confectionery enterprises may have ambitious plans of establishing brands with nationwide market coverage there is a complex matrix of functions that have to be performed on a daily basis.
  2. On the other hand there are confectioneries that belong to the micro, small and medium enterprises segment and are unorganized. The unorganized characteristic feature stems from the fact that these enterprises are constrained by the lack of business development channels, scale of operations, inventory management resources and facilities.

Perishables

Across both these segments of confectioneries what holds true is that production of eatables like breads, cakes, cookies, chocolates, sweets, pastries and puffs cannot be inventory for a long time. While there is the obvious choice of using preservatives to elongate the freshness and edibility of these products in the branded and packages segment, doing so often comes at a cost of compromising on the taste and freshness of the products.

This means that such edible products are essentially constrained by the single largest factor of expiry of the products. These perishable items can be inventoried as said earlier with preservatives but will also add to the inventory carrying costs of the enterprise because the storage facilities for such perishable products have got to be equipped with facilities for safety, health and hygiene, cleanliness and proper handling during mobilization. Very often this translates into the necessity to develop and maintain cold chains and storage for storage of confectionery products and skyrockets operating expenses while hardly contributing to the marginal revenue.

The Construction of the Demand Driven Model

In order to resolve the grass root level problem, it has to be understood that production and sales in confectioneries enterprises have to be directly proportional to the demand in order to avoid wastage of labor, materials, working capital, shelf space and time.

Further it also makes good sense to direct more efforts at scaling up the marketing function to reach out to a wider audience in the market and target a greater number of customers depending on the radius that the enterprise sets for itself. The geographical radius may become the premise for understanding the target customer profile in towns, neighborhoods and localities.

A demand driven model for confectioneries is based on: first, moving from an archaic in-house marketing platform to a digital marketing platform and secondly, by creating an interface for customers to get in touch with the enterprise from anywhere and at any point of time.

Ecommerce Website Development

By embracing ecommerce web development solutions confectioneries can achieve both the above stated objectives. This requires the development of a basic minimum website of the enterprise with high quality web pages that contain keyword and search engine optimized textual and pictorial content to build traffic. The entire product portfolio of the enterprise should be included in detail with customized offerings for special occasions, festivals, parties and other celebrations. Promotional offerings of low price points may be stated with add-on billing options for toppings and laser focused custom high end products.

Responsive design for mobile

A dedicated e-commerce portal may be developed with an easy to use interface and navigation for the supreme comfort of customers. Ecommerce portal development, if done on the basis of responsive design for better smart phone screen compatibility, will ensure traffic from the mobile segment of customers in addition to the web.

In order to facilitate the streamlining of sales through online and smart phone segments, it is essential to focus on a safe, secure and speedy payment gateway development and integration with the e-commerce portal for recurring billing, online payments and receipts. By combining business development and billing, confectioneries stand to benefit in multiple number of ways.

Benefits of Ecommerce Web Solutions Development to Confectioners

Embracing the digital model of business has many tangible business benefits for confectioneries:

  1. First, the single largest problem of production planning on a regular basis is addressed by moving towards an on-demand model that presents much lesser operating and financial risks than the traditional model.
  2. Secondly, it is widely anticipated that the e-commerce model of doing business is going to generate a wider traffic for the business and thus lead to higher sales and revenue for the enterprise because of the wide exposure, outreach and penetration capabilities of the click and mortar in comparison to the brick and mortar way of doing things.
  3. Thirdly, since there is a hardly any scope for excess production due to demand driven data that is available from the e-commerce portal there is cost saving and reduction in working capital blockage.
  4. Fourth, shelf space and floor space of the retail store is better utilized and this means better visual merchandising and store display of products to lure customers.
  5. Fifth, it also indicates a greater efficiency in billing and receipt on account of automated payment process that is facilitated by payment gateway development and integration. This is likely to have the overall impact of faster collection of revenues from sales that are closed and thus improvement in the cash cycle and cash balances. More over an e-commerce portal of the confectionery company can be developed for the future to improve sales by harnessing local SEO.

On a concluding note it may be added that there are multiple benefits of developing an e-commerce website and harnessing e-commerce solutions. At a later stage on verifying the economic feasibility of the model the company can also think of developing mobile applications to increase the number of sales channels and add to its revenue.

Thus it may be concluded that by all counts the returns on investment emanating from e-commerce web solutions far outweigh the costs of development, maintenance and modernization as well. There is a strong business case for confectioneries in favor of ecommerce solutions development.

Images “Sweets store at Boqueria market place in Barcelona, Spain. Assorted chocolate candy shop.  /  Shutterstock.com

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Zeba M. Alam

Zeba M. Alam

Zeba Warsi is a Digital Marketing Consultant in Misha Infotech. She is GAP Certified and has a background in Market Research, Brand Promotion, and Content writing & Marketing. She has been actively involved in Internet Marketing since 2009 and delivered Digital and content marketing strategies for multiples of online-only businesses, helps the clients to use the internet to market their businesses online.

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