How a franchisor can do e-commerce

Without cannibalising franchises

Franchise has challenges in business model to do e-commerce:

If a franchisor starts to sell directly to consumers in web, every sales is cannibalising the franchise stores.

If a franchisor does not sell in web, all the web sales is lost to competitors. Even worse situation.

If every franchise store has their own webshop, the customer experience becomes confusing. For example customer is searching a product with certain size colour combination. Would the customer visit every franchise webshop until he/she finds the one that has stock for that size colour combination? Or frustrates and clicks to competitors more advanced webshop? Also the return and change process will be complicated for both the customer and the store.

There is a simple technological solution for this challenge: Magento Commerce Order Management. MCOM is a system that resides behind a webshop. It’s purpose is to manage inventory and orders. It can also manage payments, customer service and analytics/reporting.

Coolest thing what can be done with MCOM is global inventory. In global inventory all the stock information including warehouses and stores are integrated to MCOM. Webshop uses MCOM as stock information.

When customer orders a product the order is passed to MCOM for processing. MCOM routes the order for fulfilment where it’s best to do. If a merchant wants to fulfil the orders also from stores it’s possible by using MCOM. If merchant wants to offer return possibility to any store or to return the store purchase to webshop's warehouse it’s possible by using MCOM.

Naturally buy from store, delivery from warehouse is possible including 3rd party drop ship. This is called Endless Aisle.

In franchise business model the franchisor has a webshop. All the franchise stores stock information is integrated to MCOM which can be extend with franchisor whole sale warehouse stock information.

The customer can see every franchise store’s stock information for every product including webshop stock information if wanted. This information can be enhanced with automatic store location, open hours, contact information, etc. The customer can “click & collect” the product from the store or have it delivered from any store if the nearest store does not have stock left.

In this way the business can balance the supply and demand in different market areas: In some stores certain size colour combination of the product is sold out including the warehouse stock but in some stores it does not sell that well. If a webshop uses MCOM those unsold products can be sold and delivered with full price where the demand is.

With MCOM the return process can be handle in any store. MCOM handles the refund process to the card that was used with the purchase.

In this example the franchisor is the seller and the franchise stores deliver the orders. If the franchise store does not react to order in certain time or the franchise store does not have safety stock left the order can be redirect to warehouse for fulfilment. If set the safety stock guarantees that there are minimum stock of every product in every franchise store.

The franchisor transfers the webshop sales to franchise stores that have fulfilled the webshop orders. This way the webshop sales benefits the franchise stores and does not cannibalise their market.

The customer experience rises to whole different level from this kind of true Omnichannel solution: homogenous, flexible customer service despite the store or channel. This is the way every webshop should integrate with brick & mortar.