Ecommerce for Manufacturers & Distributors

Ecommerce is a hot topic these days – the way we do business is changing radically and quickly. Amazon is testing delivery by drone. Volvo has announced that it will sell cars online. Companies that ignore the diverse growth opportunities of this channel are putting the future growth of their firms at risk. While ecommerce has made significant inroads in the retail sector, many manufacturers and distributors are still in the early stages of discovering how to exploit the opportunities and learning about the risks of delayed action.

In this series I will identify the critical factors that make ecommerce adoption by manufacturers and distributors an attractive opportunity for growth and profitability. We will also explore misconceptions and fears that often prevent or delay timely implementation.

10 Compelling Reasons for Manufacturers & Distributors to Adopt Ecommerce

Reason 1: Consumers are embracing online shopping in ever increasing numbers primarily because the simplicity and quality of the online shopping experience has improved exponentially in recent years. Consumers accustomed to user–friendly online personal shopping naturally expect to enjoy the same convenience at work when shopping for business purposes. Across the board, the Customer Experience (or User Experience – UX) factor is driving adoption. Customers want to shop on their own terms, which include:

  • “Give me the information I need to make an informed purchase decision. Provide me with information–rich descriptions, images, demo videos, spec sheets and more.”
  • “Make it convenient for me. I’m not willing to settle for constraints imposed by ‘traditional’ working hours & geography.”
  • “Make the process quick and easy. Let me identify “Favorites” so I can access what I need quickly. Even better, implement functionality that will enable you to
    anticipate my needs.”
  • “Make it interesting, because I like to browse. Give me a reason to keep coming back to your store. The more often I return and the longer I stay the more I buy.”
  • “Give me information on related products. Tell me about the accessories that go with the camera I just put in my shopping cart. Tell me why I should be considering a camera with more  features.”

Reason 2: Business owners are constantly looking for ways to simplify and speed–up operations. It’s a fact that the ‘buy–side’ of a sales transaction can be a burdensome, costly and slow process particularly when activities outside the Purchasing Department are factored–in. Eventually your customers will notice and look for better ways to interact with you. Posting static catalogs on a website was a good first step in 1994, but it’s simply not enough today.

What steps have you taken to improve your customer’s end–to–end experience when doing business with you?

Reason 3: Many potential customers browse manufacturer and distributor websites to learn more about your products before making a buying decision. Carpe diem! The customer is in your store! Seize the opportunity to sell to them in the moment rather than drive them to the web where they may see and choose a competitor’s product.

Reason 4: A growing number of manufacturers are starting to sell direct to consumers, bypassing intermediaries who don’t have ecommerce capability. They’re doing this for a number of reasons including:

  • To increase exposure and awareness of their products
  • To develop an ongoing relationship with the customer
  • To gather more information on the end user of their product
  • To have more control over selling prices
  • To reduce complexity and cost of their supply chain

Reason 5: Your competitors are probably doing it, or planning on doing it. More and more businesses are seeing consolidation happening around them and are facing stark choices; change how you’re doing business; be absorbed into a competitor’s operation; or stagnate and decline. Ask yourself; if you do nothing in the ecommerce space will your company be around in 10 years?

Reason 6: ‘Showrooming’ is a phenomenon that’s here to stay. The more obvious examples of showrooming in the retail sector include publishing and consumer electronics where customers find what they want in a bricks–and–mortar store then buy it online from another seller. Showrooming is making inroads at the Business–toBusiness level where manufacturers, distributors and retailers are looking for new ways of working together for mutual benefit.

Reason 7: Ecommerce enables distributors to expand their service offering to manufacturers. Distributors, when marketing their services to manufacturers, can promote their ecommerce capabilities as an important differentiator. The old ‘Manufacturer’s Rep’ pitch used to be “We have sales reps on the road calling on all your customers.” What it can be (and must be in the future) is “We have sales reps on the road calling on all your customers and they’re much more effective than our competition because we support your catalog with an ecommerce system that enables us to engage with customers every day, in real-time. We can support your product line with a feature-rich online catalog that enables us to promote your products effectively 24/7/365 while capturing actionable information about the customer.” The data mining opportunities that ecommerce creates is virtually bottomless.

With ecommerce Manufacturers and Distributors are able to get to know their customers in unprecedented ways. When does my customer like to shop? What products is she/he looking at but not buying? How long do they spend looking at my product line? What content do visitors appear to read more than others? Being able to provide this market intelligence to decision-makers is extremely useful and valuable. There is a lot of products on the market that can increase your sales, you can take a look at absolutely awesome CMS Magento and check out a variety of different plugins and Magento extensions that can boost your sales with one button click.

Reason 8: Market trends. Forrester Research forecasts sustained double-digit annual growth in ecommerce through 2018. Forrester attributes growing consumer demand and the fact that Canadian consumers are increasingly comfortable with purchasing online. B2C ecommerce providers have made enormous progress in user adoption, primarily due to improvements in functionality and the overall User Experience (UX).

The potential of the B2B market dwarfs that of B2C. However, it’s critical to recognize that the needs of B2B vs. B2C businesses are fundamentally different which is why it’s essential that companies work with ecommerce providers that specialize in B2B and can provide sensible and logical strategies to get you where you need to be to capitalize on the opportunities that are within reach. Read this fabulous article by Forbes: B2B eCommerce Market Worth $6.7 Trillion by 2020

Reason 9: Market Intelligence. To succeed in today’s market you must get to know your customer better. One of the greatest benefits of ecommerce is that it offers a virtually limitless amount of detail on buyer behavior, preferences and trends that can provide actionable information for developing sales and marketing strategies. Traditionally, manufacturers and distributors sell through an intermediary, such as a retailer or dealer network. This supply model makes it difficult to get to know the end user of your products. Ecommerce fixes this problem making it possible to mine information like never before.

Reason 10: Your customers expect it of you. The individual you considered to be your customer as recently as five years ago has changed dramatically. As the mix of your customer base has changed, so have their needs and expectations. Chances are, your “customer” used to be a Buyer within your customer’s organization. One can almost visualize a classic vignette whereby a salesperson who’s been dealing with the buyer for years shows up once a month, possibly with coffee and a box of donuts, and spends an hour or so talking about business, the local sports scene, family and more for the sole purpose of nurturing a relationship that will generate the coming month’s sales. It’s important to acknowledge here that building and nurturing relationships was and will continue to be a critical component of business.

However, the Buyer’s direct influence on your prosperity is shrinking every day as more and more end-users (i.e. your Buyer’s customers) are going directly to the source (that’s you!) to research your products to make an informed buying decision. While you have their attention you could be selling directly to them – but ONLY if you have ecommerce capability. If you don’t have ecommerce capability there’s a high probability that he/she will leave your website, return to Google and click on the next manufacturer or distributor on the list that came
up in their search.

Why would you let this happen? Why would you let a customer leave your ‘store’ and let them find one of your competitors with a professional ecommerce presence? What impression will the customer ultimately have about your business vs your competitor? Where will the customer go the next time they want to buy something? Resolutions to issues such as these are more accessible today than ever before. From a) the variety of solutions available, b) the affordability factor, c) the interoperability of ecommerce systems with existing systems, and d) the time from decision to launch, everything is more within reach of small and mid-sized manufacturers and distributors than ever before. Talk to an ecommerce provider to explore what’s available to you and the business impact you might expect.

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