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How eCommerce is Changing the Manufacturing and Supply Industry

Oct. 25, 2017
eCommerce changed the face of retail forever. It’s been a major influencer in shaping how buyers think and what they expect.

eCommerce changed the face of retail forever. It’s been a major influencer in shaping how buyers think and what they expect.  It’s no surprise this revolution has spilled over into the arena of B2B commerce. As early as 2013, Forrester noted that B2B eCommerce will dwarf B2C retail eCommerce, $559 billion to $252 billion. Since then the gap has only grown.  

Just as in retail, early eCommerce adopters in the manufacturing and supply sectors will gain market share and dominate the landscape for years to come. Digitizing isn’t without challenges, but the benefits are substantial if you know how to choose the right solution.

The B2B buyer has changed
B2B buyers are now eCommerce savvy B2C consumers; and they bring their digital retail expectations to work with them each day. These buyers are changing the B2B purchase journey one transaction at a time. B2B buyers are still proactive, but instead of pouring through catalogs, thumbing through Thomas Register, and making phone calls, they turn to search engines and manufacturer web sites. The self-serve model they love for B2C is driving their behavior on the job. Manufacturers and suppliers that reward these buyers with an online experience that includes eCommerce will earn their loyalty.

eCommerce Advantage for Manufacturers and Suppliers

Increased sales are a major benefit, but that’s just the start. The right eCommerce platform will support digital marketing efforts, integrate with other business solutions, and free sales and customer service to focus on what they do best: build relationships and serve customers.

Access New Markets. eCommerce fits hand in glove with digital marketing. Scaling into new territories and new markets is much easier and more cost-effective when you go digital. Face it, strategic use of digital boots on the ground just costs less and results are easier to track. Increased reach and greater brand awareness yields more sales possibilities. Those digital boots need not step on the toes of your existing distributors either. Provide your existing distribution chain exclusive offerings and your distributors won’t perceive your eCommerce presence as competition. These offerings can be as simple as unique colors, finishes, or sizes or as complex as exclusive products. Then, additionally tailor your products for new markets and you will increase your reach without competing with your existing network.  

More Efficient Operations. With all of those new sales to handle, you’ll be glad that your eCommerce site can improve back-end efficiencies. An effective eCommerce solution should easily integrate with your ERP, CRM, PIM and any other alphabet soup of systems you use. Seriously, solutions that don’t integrate aren’t solutions at all. So, it’s important to plan for integration during the platform selection process to maximize the potential of digitizing.

Customer Centric Focus. Your forward-facing operations benefit from eCommerce as well. When customers are free to order online and check the status of an existing order whenever and wherever they want, you don’t waste time taking orders and answering order status questions over the phone. The customer service and sales functions can focus on nurturing leads, building relationships and providing true customer service, sales, and warranty support. Digitize the freight quoting process and let shipping focus on getting orders out the door and off the loading dock. As a bonus, when you eliminate the need to rekey data into an order system, fulfillment and shipping errors are decreased dramatically.  

Leverage the Power of Online and Mobile for an Omnichannel Experience

By 2015, nearly two-thirds of Americans owned a smartphone.  B2B buyers rely heavily on mobile search. According to ComScore, 72% of those phones have a Facebook app on them, almost 60% have Google Search, and 45% have Instagram. Why is this relevant? 84% of C-level and VP level buyers are influenced by social media. 75% of tech buyers rely on search and 40%'s buying decisions have been influenced by mobile ads. Where tech buyers lead, other buyers soon follow. Clearly B2B buyers want an omnichannel experience that includes mobile and online options. Major manufacturers are figuring this out. You should too. For example, Sweden’s Volvo AB is testing direct internet sales of its autos in Belgium and in the U.S., Ford Motor Company is working with dealers to create multiline showrooms to achieve economies of scale and revolutionize their brick and mortar operations. All of this after they began selling cars online in Britain.

It's not enough to have a website, it must be mobile friendly as well. Buyers want to look on-line and call if they have questions. Click to dial is a must-have feature if you want to provide a seamless omnichannel experience. Global players such as Jimi Electronic Company, a China-based manufacturer of GPS and wireless communication equipment, pair their own eCommerce site with global marketplaces such as EC21 to meet the buyers desire for self-serve wherever they are. On desktop or mobile, on an eCommerce platform or at a marketplace, you must be prepared for today’s buyer.

Mythbusting B2B eCommerce

It’s clear that B2B eCommerce provides the experience buyers want. So why are manufacturers and suppliers slow to implement?  There are many myths that provide stumbling blocks. We’re here to tear them down.

Complex Ordering Process. Too many manufacturers believe that because no two orders are alike, orders can’t be processed on-line. The myth: price lists and catalogs personalized by customer and the RFQ process just can’t be handled on-line. It’s just not true; but this myth did come from somewhere. In the beginning, B2B sellers tried to use B2C eCommerce software to do the job. It was ill-prepared to handle the complexities of B2B eCommerce and required extensive and expensive customization. Today, B2B eCommerce platforms are built from the ground up for B2B transactions. Products like OroCommerce provide customizable workflow engines for multiple, complex scenarios.

Multiple Decision Makers. Many B2B sales are the result of a process that includes multiple decision makers. The myth: eCommerce can’t handle this level of complex approval. Debunked! B2C isn’t up to the job, but a solution with robust account management allows the buyer to configure their own corporate account structure. Customer users define roles and authorities and create purchasing rules for their own account depending on roles.

Ordering and Re-ordering is Slow. When it comes to repeat purchases, most buyers know what they want. It’s just easier for a buyer to upload a file with SKUs and quantities to place an order. The myth: on-line repeat and bulk ordering is tedious as you must search to populate the order form. If your eCommerce platform can’t handle bulk orders and re-orders easily and efficiently, you’ve got the wrong platform. As a matter of fact, Forrester reports that 44% of companies that receive orders through an on-line portal experience higher average order values.

Payment Terms. Most B2B purchases aren’t made with a credit card or PayPal. Buyers need to check out a shopping cart with terms. The myth: eCommerce doesn’t provide for PO processing, net payment terms, or credit applications.  Once again, this might be true for B2C platforms, but a B2B platform should have a flexible workflow engine and integrate to handle a variety of check-out scenarios. Also, look for platforms with technology partners to help extend terms or process payments.

Choosing the Right Solution
As manufacturers and suppliers began to develop eCommerce sites, B2C platforms tried to adapt their systems to meet the need for B2B. Unfortunately, they missed the mark and were unable to build the scalable and customizable solutions that the B2B marketplace needs, mainly because B2C platforms don’t provide a customizable workflow engines.

When evaluating B2B solutions, look for true B2B capabilities, time to market, total cost of ownership, flexibility and scalability, support and a healthy partner ecosystem. It’s not a decision to be made lightly. Luckily Frost & Sullivan researched B2B eCommerce platforms recently and their findings can help you make an informed decision.

Oro provides open-sourced business solutions for B2B eCommerce and CRM through its products OroCommerce and OroCRM. With over 150,000 active installations, it has a strategic global footprint with features and tools made for B2B companies going online.

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