Electronic Data Interchange

What is EDI?

EDI is the electronic transmission (sending and receiving) of business documents, in a standardized format, between companies. It is the digital exchange of mission-critical information directly between different business’ computer systems. Purchase orders (PO), PO acknowledgements, invoices, advance ship notices, shipment confirmations, product catalogs, and other documents can be instantly and accurately exchanged with little to no human interaction.

 How does it work?

For an example of how EDI supports omnichannel commerce, picture a furniture shopper who has her eye on an upholstered sofa. She’s researched it on your website, fallen in love with the style, customized by selecting an upholstery fabric in her favorite color and pattern, then shared with friends on her social media channels. Now she goes to check on the item’s availability. If the dealer has strong EDI with the sofa manufacturer and the fabric supplier, it will have up-to-the-minute information about exactly what is in stock, where inventory is located, what has been shipped and when products are due for delivery to the store or warehouse. This information might reside in a retail management system (RMS) or order fulfillment system that feeds information to the website and ultimately to the shopper. But before the information can be presented to the consumer, a salesperson or a customer service representative, it first must be transmitted and received via EDI, which is continually depositing the latest data precisely where it is needed. Electronic data interchange (EDI), which you might call the original e-business tool, has been around long before omnichannel retail came onto the scene. While EDI is not new, its significance to omnichannel commerce cannot be overlooked. When furniture retailers have EDI running like a well-oiled wheel behind the scenes, they are much better positioned for omnichannel success. Why? It’s because information — especially reliable, real-time inventory information — has never been more important in the history of retail. It is essential to meet the expectations of always-connected consumers. Study after study reminds us that today’s shoppers are often browsing online before they buy; a recent report stating 48% of consumers starting their discovery process directly on a brand’s website. They want transparency in product availability from your store, delivery lead times, pricing, and product details. While this customer will never see an EDI document, he or she expects the retailer to deliver answers that ultimately tie back to the EDI system – the information backbone of business-to-business (B2B) commerce.

Connecting the Dots

EDI connects the dots, enabling retailers, manufacturers, suppliers and logistics providers to share, analyze and collaborate on orders, shipping plans, catalogs, pricing and more. This communication can happen without time-consuming calls, emails or faxes required to get answers. Modern EDI solutions are often cloud-based and use an open computing approach, making EDI affordable and easy to implement for home furnishing businesses of all sizes. When furniture retailers work with an EDI software vendor with an established industry track record, they will usually find that relationships already exist with many popular RMS and logistics providers. They can very quickly start exchanging EDI documents with their own customers and supply chain partners. EDI frees furniture retailers to focus their talented staff on value-added activities such as building customer relationships, developing innovative new products and enhancing the shopper experience. Invest the time in growing your business and let EDI handle the rest!