By Bipin Dhungana | January 02, 2025
Online storefronts are the cornerstone of any business in the modern digital world of commerce. For a business that sells a product or service, the storefront serves as a digital gateway that lets customers browse through what the business has to offer in an online environment.
Incorporating several essential components like the web interface, product catalogs, payment channels, security protocols, etc. an online storefront provides its users a platform where they can navigate the product listings and make purchases in real-time.
In a competitive and fast-paced e-commerce landscape, businesses with online storefronts are and will continue to face more pressure and stiff competition necessitating optimizing their supply chain while maintaining customer demands.
Integrating Electronic Data Interchange (EDI) with online storefronts has become a critical strategy now more than ever before in order to sustain, scale, and achieve growth goals.
But why?
This article explores the essentials of EDI and why it matters to integrate this technology with online storefronts to optimize your business.
EDI is not a new technology. It has been around for half a century. However, it is still highly relevant in modern business communication just like in the old days.
Some estimate that EDI is even more prominent in modern supply chain operations than before as faster processing, real-time exchanges, and error-free transactions are getting more important in the modern competitive e-commerce landscape.
EDI is a data transfer method that uses a standard format to electronically transfer documents between two computerized systems.
Used mostly in B2B transactions and supply chain management, EDI replaces old paper-based methods of document exchanges.
This gives businesses an avenue to exchange essential business documents like Purchase Orders, Invoices, Shipping Manifests, and Inventory Updates automatically and in real-time thereby saving costs, reducing errors, and improving efficiency through streamlined communications.
Real-time data exchanges without errors are critical in modern storefront operations.
Customers want real-time updates of the product catalogs, notifications of shipment status, fast delivery, and efficient payment options.
Businesses on the other hand need accurate data on inventory stocks and customer preferences. Moreover, communicating with large numbers of suppliers, distributors, wholesalers as well as other trading partners also takes a chunk of their day-to-day operations.
In such a complex environment, without an efficient way to properly handle all of the data exchange operations so that the supply chain does not get disrupted, orders are fulfilled effectively, customer satisfaction is maintained, and errors are promptly handled, EDI becomes essential.
To further understand the importance of EDI and storefront integration, let us first look at some of the critical tasks of managing an online storefront backend.
While the frontend of the storefront deals with website, design, marketing, and user interface, the backend processes have several key components without which the storefront simply cannot operate.
Some of the key backend components of online e-commerce stores include:
A product catalog is typically on the front end of an online store as it displays the product offerings of the business. However, management of that product catalog is a backend operation performed away from a customer's eyes.
Managing the product catalogs so that they offer a smooth shopping experience to the customers is simply a given when running an online storefront.
However, maintaining the product catalog in the backend while not affecting customer shopping being carried out in the front end poses several challenges.
Inclusion of hundreds of product offerings, updating them constantly, checking real-time stock inventory for any changes, and managing a diverse range of suppliers and trading partner systems so that they can send and receive data to be processed directly on the product catalog are only some of the challenges of efficient product catalog management.
Managing the catalog will become much harder as the business grows in scale and product offerings.
However, without proper management of the catalog, customers quickly lose interest, get outdated information, and make purchases based on that information, which will severely impact the delivery process and leave a negative reputation for the online business.
Severe concerns like loss of large amounts of sales revenue and damage to credibility are issues that cannot be overstated in B2B e-commerce environments.
This makes product catalog management an extremely critical component of an online storefront backend optimization.
Order fulfillment involves all the processes of an e-commerce operation from order placement to the eventual delivery.
One can say that this is the entirety of an e-commerce business. So, what does managing the back end of an online store have to do with order fulfillment?
The order fulfillment process starts when a customer places an order on the storefront. The order is sent to the ERP, Inventory, CRM, and other related business systems.
The business will then ship the product to the customer, update its catalog, restock its inventory, process payments, deliver products, and generate invoices.
The business also must purchase products from its suppliers and related trading partners.
This includes sending purchase orders for large-scale B2B purchases, getting manifests detailing shipment information, processing invoices sent from the suppliers, and adding the product information on the inventory systems along with updating the ERP, CRM, and Accounting systems of the business.
This whole order fulfillment process from business to customer or business to business takes careful handling, efficient communication, and synchronization among the key players in the supply chain.
Inventory control involves creating and maintaining an inventory or warehouse management systems (WMS) that accurately track the inventory of products.
Inventory management also involves timely restocking of products, analysis of data for preventing overstock or understock, and maintaining accurate and real-time communication with systems like catalog management, ERP, and accounting to perfectly manage the supply chain inventory of a business.
Without proper inventory management, the online storefront cannot function properly as the misalignment of products, incorrect catalog data, and inefficient communication all impact the e-commerce operation.
This makes inventory control an essential checkpoint in managing storefronts.
Payments are key in any e-commerce transaction. Processing of payments done on the online storefront is a backend operation that requires a high level of security, transparency, and efficiency.
Problems with payment processing not only cause customer dissatisfaction and loss of sales, it will also damage the credibility and financial standing of a business. One can say that proper payment processing is a cornerstone of a smooth transaction.
Processing of payments includes gateway integrations, banking and finance integration, generation of invoices, real-time payment data mapping, implementation of payment regulations, and more.
Smooth communication, security, and perfectly transparent payment systems both internally and externally are essential for an optimized supply chain making payment processing an essential backend component of online storefronts.
It goes without saying that an online storefront requires a secure environment for data exchange.
Security of customer data, product data, supplier data, ERP, CRM, WMS, and Accounting systems data, all hinges on how effective security protocols are put into place by the business operating an online storefront.
An insecure environment not only drives away customers, it also makes businesses vulnerable to attacks and data breaches, potentially costing the business millions of dollars or more in losses.
In a large-scale e-commerce environment involving B2B and B2C scenarios, security matters even more. Loss or breach of transaction data in a large-scale B2B or B2C e-commerce can shut down the business while having the potential for litigation.
So, managing security certainly has to be a top priority in handling the backend of an online e-commerce storefront.
EDI can integrate with the online storefront and streamline the key components mentioned above in managing the storefront. Here is how.
Through the electronic exchange of data, EDI allows storefront catalogs to be updated in real time with proper product data. This ensures that the catalog always remains relevant.
The electronic product catalogs with updated price lists, item descriptions, and other relevant information can be exchanged easily with EDI. If the storefront catalog has hundreds, or even thousands of products of diverse ranges, the use of EDI will facilitate the communication of catalog data for these diverse range of products.
By reducing manual input during the catalog update, EDI helps reduce errors so that the catalog of the storefront remains error-free.
Furthermore, by automating repetitive tasks like constant updates on the storefront catalog, enhancing communication, and improving collaboration with trading partners, EDI smooths catalog management of the product catalogs.
EDI enables automated and faster order processing with enhanced security and transparency for the business with an online storefront.
Generating Purchase Orders (EDI 850), Order Acknowledgements, (EDI 855), Advance Shipping Notices (EDI 856), Invoices (EDI 810), and Functional Acknowledgements (EDI 997), Electronic Data Interchange interweaves crucial process through which the order processing can be automated.
By improving order automation workflows throughout the supply chain, EDI enables real-time order processing. When EDI documents get exchanged, all the parties involved in the order fulfillment get the same standardized data, enabling transparency while reducing discrepancies.
Using EDI reduces costs and increases efficiency when processing and fulfilling orders. This makes businesses deliver products to their customers from their storefront to the delivery location an efficient ride.
Managing the online storefront inventory involves checking out the number of stocks remaining in the warehouse, communicating the stock availability with other business systems, making sure that the inventory data remains up-to-date, and planning for scenarios like high-demand and low-demand periods, etc.
EDI provides real-time updates on inventory data, supports demand forecasting through the reporting and analysis of inventory levels, helps inventory tracking, and prevents stockouts.
Moreover, by enabling efficient coordination across the whole supply chain network with real-time, accurate data electronically, EDI enables storefront businesses to communicate effectively with their suppliers and trading partners.
With EDI, business owners do not have to worry about getting irrelevant or outdated inventory data when communicating with their trading partners.
All in all, by providing enhanced visibility, real-time inventory updates, preventing stockouts, and maintaining smooth supply chain processes, EDI helps manage inventory of online storefronts.
Processing Payments With EDI For E-Commerce Storefront
EDI helps with payment processing by enabling quick and efficient communications, and with documents like Invoices (EDI 810).
When invoices are automatically generated, transferred quickly and accurately to the relevant personnel, and automatically updated on the accounting systems of a business, managing payment processes becomes a clinch.
EDI can integrate with the payment and accounting systems of the storefront business, manage the automatic updates of financial transactions, help in the communication of financial data with key stakeholders of the business, and improve the overall efficiency of the payment processing for the storefront.
The use of EDI comes with enabling several security measures. Security protocols like AS2, SFTP, and HTTPS ensure that any data transmitted through EDI documents remains safe and secure.
While no system is unbreachable, EDI significantly enhances security through the use of encryption algorithms, integrity checks, and authentication protocols so that a storefront can smoothly maintain its business without making any compromises in security.
Moreover, businesses can also implement additional security methods on their storefronts like firewall protection, two-factor authentication, and password protection to heighten the data security.
Integrating EDI with your online storefront is much like implementing EDI for your e-commerce business.
A simplified version of integrating EDI with an online storefront with relevant steps is outlined below,
Step 1: Business needs assessment
Here, you identify the pain points of your storefront business as well as the type of EDI documents and transactions required for the business.
Step2: Choosing the right EDI provider
This is a critical step where you choose a provider like Commerce Network that provides a cloud-based EDI service that meets all of your needs like mapping, translation, communication, scalability, catalog updates, inventory management, integration with ERP and accounting systems, use of standards like ANSI X12, EDIFACT, XML and JSON, etc. for your online storefront.
Step 3: Storefront-EDI Integration
This is the main step where you integrate the storefront with EDI through mapping data fields, establishing communication protocols, and testing the connection. This process also involves communication with trading partners, and making sure that your system is operable in a supply chain network of multiple stakeholders.
Step 4: Training and Maintenance
This step involves training your internal team on operating the EDI for your online storefront. As EDI can often be complex, your team needs to be fully trained to handle all sorts of tasks like monitoring EDI transactions, troubleshooting issues, and leveraging the system to enhance efficiency.
Step 5: Monitoring, Scaling, and Optimization
This is the final step that requires constant monitoring of the performance of EDI integrated storefront. It can be done through the use of analytics for tracking KPIs, finding issues with smooth operations, and more.
As the business grows, it is also important to scale your EDI system to match the required operations. Continuous improvements of the system and frequent optimization are also required on the EDI integrated system.
Several challenges need to be addressed to integrate the online storefront with EDI.
Challenge 1:Complexity of integration
The use of legacy technology, mapping difficulties, protocols and compliance issues, testing, validation, and error resolution all contribute to the complexity of integrating EDI with the storefront.
Solution: Work with experienced EDI providers like Commerce Network with decades of experience to simplify the process. You can also opt for cloud-based EDI that has less complex integration requirements than on-premise systems.
Challenge 2: Implementation and operational costs
While EDI ultimately saves costs, in the initial phases, you need a considerable sum to implement and operationalize Electronic Data Interchange. The cost of maintaining hardware, training staff, software costs, etc. all add up to take away a chunk of business operating income.
This can be a big challenge, especially for small and medium enterprises using online storefronts for the e-commerce business.
Solution: Instead of a big bang approach of implementing EDI all at once, you can start with a phased approach focusing on important and high-priority EDI transactions to minimize initial costs.
Challenge 3: Stakeholders’ resistance to change
Implementing EDI means your system fundamentally changes to a new mode of document exchange. Moreover, many of your trading partners may have different standards so you need to match your mapping specifications to their standards and vice versa.
This change can make many individuals used to the old system apprehensive and resistant.
They may also not like the additional training and operational guidelines that come with EDI integration on their existing storefront.
Solution: Provide adequate training and demonstrate the long-term benefits of EDI integration to stakeholders involved with the integration and operation of EDI in the online storefront.
Integrating EDI with online storefronts is a transformative step for businesses looking to streamline their supply chains and enhance operational efficiency. By automating key processes, providing real-time updates, and enabling seamless communication with suppliers, this integration empowers businesses to meet customer demands while minimizing costs and errors.
As digital commerce continues to evolve, companies that embrace EDI integration will be better positioned to stay competitive, scale operations, and deliver exceptional customer experiences. Whether you’re a small retailer or a global enterprise, now is the time to consider EDI as a cornerstone of your supply chain strategy.
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