Manufacturers have nothing to fear from headless commerce if it’s on their side.
By Alex Sayyah
Maybe you can’t wait to see your customers in person again. But the feeling may not be mutual.
Once upon a time in manufacturing, B2B e-commerce comprised only a small fraction of the sales pie. Marketing meant sending a catalog in the mail. Trust-building happened at the tradeshow. Deals were sealed with a handshake, and possibly a great gift basket.
Today, 60 percent of manufacturers have experienced sales disruptions from COVID-19 and B2B sales have been forced to go fully remote practically overnight. Manufacturers who didn’t already have the functionality in place to satisfy B2B buyers digitally have found themselves in a supremely disadvantaged position.
But abrupt changes haven’t just come from tradeshows being shut down by the pandemic. McKinsey analysis on changing buyer behaviors has found only 20 percent of B2B buyers hope to return to in-person sales.
This year’s B2B buyers are predominantly tech natives who like their B2B experiences as streamlined and automated as their consumer experiences. They are looking for B2B e-commerce that is largely self-serviced and remote, even when making large purchases or placing a reorder. Most crucially, they will choose suppliers who provide outstanding digital experiences at twice the rate as those who don’t.
With customer demand for digital shopping experiences growing exponentially, the industry is moving away from traditional, intermediary-driven sales to make way for more digital self-service.
Only the lonely
While these changes could be viewed as a challenge for the industry, the present sales landscape presents huge opportunities, especially for SMB manufacturers, who, because of their size, have the agility to accommodate changing buyer expectations and leverage technological innovations to their advantage.
As an industry, manufacturing once had significant barriers to entry – from its complex selling environment to the need for significant capital investment.
But technology innovations helped to dismantle many of those hurdles, reducing costs, improving connectivity, and streamlining and automating time- intensive tasks. In the wake of these changes, the supply chain has also been transformed, with manufacturers increasingly less dependent on the traditional sales rep model.
In that model, after a product is manufactured it travels through various intermediary channels, including wholesalers, distributors, vendors and retailers, before reaching the customer. To deal with supply and demand, holding inventory is necessary for each of these stops along the way, tying up capital and requiring physical capacity for storage. In recent years, however, consumer demand for convenience and self-service has pushed manufacturers to reach consumers differently, sometimes bypassing intermediaries entirely.
B2B buyers, who are continually more digitally inclinced, find increasing value in researching and ordering experiences that are digital, self-directed and self-serviced. And while many manufacturers have taken note, the industry has a long way to go. In 2020, 11 percent of manufacturers reported that 81 to 100 percent of their revenues were generated through B2B e-commerce. Those still struggling with B2B e-commerce may be experiencing significant organizational roadblocks – some trying to accommodate modern buyer preferences using dated technologies and manual processes that extend the sales cycle and frustrate prospects.
With workflows unchanged for decades, transforming the way sales, engineering and manufacturing silos communicate with one another in the name of better customer experience is daunting.
We’re all individuals!
Meanwhile, today’s consumers prize personalization in their shopping experiences but also in their goods. There’s an influx of demand from businesses and consumers for mass customization from manufacturers. This has led to a fragmenting of some specialized product markets, as trends like the maker movement and crowdfunding platforms have introduced new ways to engage and poll consumers directly, using “build-to-order” models that are supported
by online promotion and preorders.
This growing demand for personalized, mass customized and niche goods have changed the traditional function of the intermediary and put more emphasis on digital selling channels, like e-commerce. While most large manufacturers don’t have the ability or agility to address these emerging specialized market categories, many of the small-to-midsize players can – an advantage for SMBs to take advantage of.
As technological innovations and the changing sales landscape continue to shrink the distance between consumer and manufacturer, many operators are focusing on new methods of value creation for their customers.
As a result of their largely frictionless experience as consumers, B2B buyers have grown more demanding, with higher expectations for everything from page load times, to detailed product info and demos, to quick checkout and self-service. But while B2B buyers may want the convenience of B2C, the buying journeys for both audiences remain quite different and therefore require a distinct approach to address their needs effectively.
Hard to buy things
Modern B2B buyers are not on a linear path. Their transactions tend to have more complex orders and pricing structures and a significantly longer sales cycle. B2B purchasing decisions can involve an array of decision makers and stakeholders, a huge quantity of products and specs, plus a growing number of competing sales channels.
Modern B2B buyers gather information independently on digital channels. They spend less than a fifth of their buying time meeting with potential suppliers. They deal with six to ten decision makers for every purchase. They overwhelmingly describe their buying journey as “complex,” and 77 percent of B2B buyers called their last B2B purchase “very complex.”
Because of these trends, sellers and reps have less opportunity to influence a sale outside of the time spent online, making a strong digital presence even more important. In fact, when buyers are comparing multiple suppliers, the amount of time spent with a single sales rep may be as little as five percent.
To pull B2B buyers through these different buying stages, manufacturers are looking for ways to take friction out of the buying journey at all relevant touchpoints. And B2B buyers have shown they will be twice as likely to reorder from suppliers who deliver a better digital experience and three times as likely to place a bigger purchase order.
Software as a service
As manufacturers increasingly invest in marketing automation, analytics, CRM, and other specialized tools and technologies to manage today’s complex selling environment, they should also be looking for technology partners who can help them create the kind of end-to-end solution that improves the buyer experience in addition to the sales back office and workflows.
A SaaS platform delivers software-as-a-service to customers who purchase a license or subscription. SaaS platforms are cloud-based systems that can be accessed across any web browser and which help you build out personalized digital B2B shopping experiences or marketplaces without any development time, so you can launch new sales channels quickly and easily. Some B2B SaaS e-commerce platforms deliver integrated sales order management features that help sellers avoid purchasing an assortment of costly tools, instead giving them a unified, all-in- one technology ecosystem with exactly the tools they need to succeed and scale their B2B businesses in the new digital economy.
To provide the best experiences for audiences with different needs, manufacturers should consider separate, dedicated platforms for their B2B and B2C buyers. By creating streamlined digital e-commerce sites that address the unique needs of each user type, sellers will improve customer experience, drive customer acquisition, gain market share, increase cash flow and reach higher growth rates than their peers.
While some B2B manufacturers have been using third-party ERP plug-ins to enable selling from B2C platforms, this adapted approach has serious functional and experiential limitations. Dedicated B2B e-commerce generally offers manufacturers more of the very specific functionality they need, allowing them to easily set price levels, create term accounts, check inventory, integrate product catalogs and manage customers. Additionally, B2B e-commerce supports robust self-service features, like: product content and demos, customer log-ins for pricing, order history, delivery and pickup methods, and integrated payment processing.
When compared to marketplace giants like Amazon, maintaining a dedicated B2B e-commerce channel also grants you the ability to better control your brand and hold onto your margins. E-commerce platforms also allow you to collect and store huge amounts of customer data, which can then be used both to create more personalized buyer journeys and for marketing and other sales campaigns.
If you’re a manufacturer still trying to run your sales business with legacy systems, limited automation, and no dedicated B2B e-commerce strategy, it’s safe to say you’ll be outpaced in what’s quickly become a digital footrace.
While specialization seems to be the direction of the modern world. Right now, it’s hard just to be a manufacturer anymore. Selling what you make can’t be left up to others.
Supply chain and market shocks continue. And manufacturers who integrate e-commerce are gaining considerable advantage over their industry peers, with better tools for their sales teams and a balanced approach that leverages both new and traditional channels.
Alex Sayyah is CEO of Aleran Software. He is a member of the advisory boards of ConvrtX and VYZR Technologies and is the former senior vice president of business development and sales for Transdev North America, as well as the former senior vice president of marketing, sales and customer acquisition for UpSwapIt.