The amount of consumer goods purchased online has increased substantially over the last five years. According to a recent Digital Commerce 360 report, U.S. e-commerce grew 7.6% in 2023. The pandemic initially fueled this trend, but consumers are likely to continue shifting away from traditional brick-and-mortar channels in favor of online shopping. As online sales continue to grow, consumer goods companies need agile and modern e-commerce ERP systems to manage the load and enable data-driven business decisions.
Supporting e-commerce growth with an ERP
In a recent Bank of America survey, nearly half of 1,000 U.S. respondents said they plan to spend more online over the next 12 months. According to the survey, convenience is the top driver moving purchases online, while the most significant drawback — the inability to try the product — is becoming less of a concern. In other words, online shopping is here to stay. For retailers and manufacturing companies, that means ensuring they are prepared to meet rising demand.
Many mid-market consumer goods companies find it challenging to manage expanding online sales and track exponentially larger amounts of data. That’s because development-stage companies in the consumer goods industry often rely on “off-the-shelf” accounting systems in the early stages of their operations. These solutions typically lack the scalability required to handle growing online sales and the capabilities to tackle things like inventory management and demand planning as the company grows.
To keep pace with the growth of e-commerce and avoid potential risks such as lost sales, increased costs and customer churn, organizations need to move away from less-capable systems and adopt more robust and sophisticated e-commerce ERP that can scale and enable data-driven business decisions. Systems like these must also be modern and agile enough to integrate with other systems. This way, businesses can collect data from emerging sales channels (e.g., Instagram, Etsy, TikTok, etc.) and sync with financial management, inventory, fulfillment and 3PL systems.
How an e-commerce ERP elevates online sales for consumer goods companies
An e-commerce ERP system provides a single, integrated suite of applications to support consumer goods companies with:
- Managing accounting
- Remote/hybrid accounting personnel
- Order processing
- Inventory management
- Production
- Supply chain and warehouse operations
- Intercompany financial transactions
The right e-commerce ERP provides companies with real-time visibility into their data and tighter control over their businesses, even as activities become more complex in an omnichannel environment. It can also seamlessly span geographies and scale with a company to efficiently handle large volumes of transactions without added costs or resources. Ultimately, an e-commerce ERP can help boost efficiency and productivity across the organization while minimizing risk.
BPM + NetSuite: A winning combination for consumer goods companies
Let’s look at a real-world example of how this works. A consumer goods company recently came to BPM with plans to capitalize on an award-winning product by launching version two of its product line. Additionally, the company sought a large Series B round of funding, primarily driven by the success of its new product launch.
The company’s siloed and disparate tech stack and processes made it difficult to scale efficiently and effectively manage the business through operations and manufacturing, as well as in the back office. Finance leaders could not access real-time information, leading them to make business decisions based on stale and outdated data. Since its systems lacked integration, reconciliation between systems happened manually and took months to complete. Consolidations and reporting from each system were also extremely challenging.
BPM worked with the executive team at the company to lay out an enterprise architecture approach that aligned with the company’s future objectives and strategy, including rolling out an e-commerce ERP, NetSuite, as the core of its ecosystem. Meanwhile, BPM’s Technical Accounting team developed the company’s revenue model to align it with the new revenue recognition standard (ASC 606). The recurring revenue from its subscription-based sales, along with the physical product, needed to be recognized at different times. The NetSuite team worked closely with BPM’s Technical Accounting team to incorporate this model within NetSuite to automate the process.
Ultimately, the company’s product launch was a success, surpassing forecast expectations. Additionally, the Series B funding round raised USD $60MM, also exceeding projections
Why BPM for e-commerce ERP consulting?
BPM has the knowledge and industry-specific expertise required to help consumer goods companies evolve their systems to meet growing e-commerce demands. Through our NetSuite Accelerator Program, our skilled consultants can revamp complicated systems architectures and deliver value quickly at a cost that works with your budget.
Contact us today to learn more about NetSuite and how it can help you create a data-driven culture!
