Photo by Adrian Sulyok on Unsplash

Dropshipping is still a relatively new business concept; it’s an offshoot of the eCommerce revolution in the retailing world, but different in that you don’t need to keep inventory. The traditional eCommerce business came as a revolution in retailing, disrupting the brick and mortar.

Customers do not need to visit physical stores; all transactions are online. Of course, the COVID-19 pandemic was instrumental to the wide acceptance of this new norm of transacting business because of social distancing and other measures that were put in place to safeguard lives.

That also probably gave a new lease of life to the dropshipping business. The ease of starting a dropshipping business makes it very competitive, and the estimate for the market cap of the sector in 2026 is an astronomical $476.1 billion.

However, the sustainability or relevance of any dropshipping brand in the global market has a lot to do with the level of digital transformation it integrates. The reason is not far-fetched; in this digital transformation era, you either innovate or your competitors kick you out of the market.

Digital transformation is all about integrating new technologies, revamping legacy systems, and technically equipping employees to add more value to the organization and enhance a better customer experience. There are a lot of areas in the dropshipping business where digital transformation initiatives will change the overall perception of customers about the brand.

According to HyperSKU, in the dropshipping business, you just focus on your brand while the organization takes care of sourcing, shipping, tracking, fulfillment, and warehousing. But how can HyperSKU do that without integrating digital transformation?

From all indications, that’s a tall order, and it’s only achievable with digital transformation. Some areas where digital transformation can be of immense benefit to the dropshipping business include:

1. Product sourcing

The dropshipping contract starts when a customer places an order and pays for it; the product the customer picks is one of the products you have displayed on your website. Incidentally, the product is not physically in your store; you have to send the order to the wholesaler, and it will take the wholesaler some time to source the product.

This is why the wholesaler must integrate digital inventory; digital inventory is AI-enabled and ensures that at any point in time, the wholesaler knows and can confirm what products are in stock, products that are out of stock, and how to quickly locate any product that customers order. Drop shippers don’t generally keep inventory, but the wholesaler or dropshipping platform that fulfills the order must keep the inventory of the products.

Integrating digital transformation into inventory management reduces the time it takes to process an order, which ultimately impacts the delivery time and customer satisfaction.

2. Delivery time

Delivery time can make or mar your dropshipping business; your customers purchase products to meet certain aspects of their daily activities, such as a wedding. For instance, if a wedding gown arrives after the wedding day, it no longer meets the customer’s needs.

No customer will give a positive review to a drop shipper that has caused such a disappointment; delivery time has two parts – product processing time and shipping time.

While digital inventory can help resolve the problems you encounter with processing, how do you handle issues that can arise from shipping?

Shipping time is how long it takes for the product to get to your customer’s doorsteps after it leaves the store or warehouse of the wholesaler. A lot of the products we use today come from China.

China has become the world’s manufacturing hub; labor is cheap, and the products are of high quality; however, there is the problem of shipping time which in certain instances can take up to 30 days. The amount you pay or the nature of the goods determines how to ship your orders.

The shipping agent can ship your orders through rail, road, air, or sea; organizations like HyperSKU know the importance of shipping time and integrate digital transformation to shorten the time it takes to deliver products to customers. They deploy dropshipping drones for this purpose.

3. Big Data analytics

Do you have a target audience? Do you have a niche for your dropshipping business? These are indices that will make you relevant in the dropshipping industry.

Your customers come from all over the world; their geographical locations and their tastes differ; their demographics and psychographics differ, but they all have one thing in common; data. Every customer has personal information you must unearth. Estimates say that by 2025, 463 exabytes of data will be created each day globally; this is an awesome figure.

This is big data, and you cannot expect to use the ordinary traditional relational databases to capture, manage, and process such a large volume of data with low latency. Big data is characterized by the three Vs – high volume, high velocity, and high variety.

You can get every information you need to know about your customers in the data they generate; but how do you obtain the relevant insights from this large volume of data? Big data analytics enable you to leverage advanced analytic techniques for actionable insights from very large and diverse data sets.

You can use big data analytics for structured, semi-structured, and unstructured data, and from different sources, notwithstanding the size of the data. Dropshipping is a business-customer relationship; products you display on your website must resonate with your target audience; when you know who your customers are, and what they need, you know what to offer them.

Conclusion

Dropshipping is a relatively easy business to set up; with little funds, you can become a dropshipping business owner. Your primary concern about your business should be how it’s thriving.

What measures do you need to put in place to ensure that your dropshipping business is relevant in the market? Digital transformation has since ceased to be a hype.

Businesses are realizing the importance of integrating emerging technologies to add more value and enhance a better customer experience.