Emerging technologies, changing B2B buyer expectations, and powerful online retailers are causing a lot of disruption in the B2B marketplace. Distributors are feeling the effects, which is causing manufacturers to reevaluate their distributor relationships and rethink their business strategy. In 2020, Distribution Strategy Group asked manufacturers their perspective on how technology will transform wholesale distribution. Many of the survey respondents predicted that the future driving force for manufacturers would be digital and direct selling, with COVID-19 acting as the accelerant for those trends. One respondent remarked, “COVID increased awareness of the shortcomings of traditional channel models and the strength of new digital channels and marketplaces.”
Now, more than three years later, these predictions are coming to fruition as we’re seeing sales volume through traditional distributor channels slowly decrease while sales through other channels like direct-to-end customers selling, retail sites, and third-party marketplaces increase. Manufacturers are taking more control of their brand, products, and sales opportunities instead of relying on distributors to drive their success, and they’re doing it by implementing their own product data strategy and eCommerce presence.
Manufacturers realize a number of benefits from selling directly to end-users through an eCommerce site and other retail channels:
1. Reach new customers
An eCommerce site helps manufacturers cast a wider net to attract more site visitors and new customers who want to learn about and purchase their products. What better place to find out more about a product than from the manufacturer themselves? With the help of a product information management (PIM) solution, manufacturers can build and maintain all their product content in one place and feed that data to their eCommerce site(s) and any other sales channels. From product descriptions, specs, and pricing to images, videos, and cut sheets – their digital channels now display everything needed to help buyers to make an informed purchase.
2. Lower the cost to serve
Digital commerce solutions were built to reduce a business’s overheard. Automation and digitization offered by eCommerce platforms streamline order processing, inventory management, and customer support, leading to increased productivity, reduced operational expenses, and a lower cost-per-transaction. System integration between eCommerce platforms and existing tech stacks is critical to a unified business, which is why application programming interfaces (APIs) are necessary components of any successful eCommerce platform implementation. APIs keep the lines of communication open between internal systems and online applications so that data can be stored and shared in real-time. With enterprise synergy, businesses can realize more efficiencies and cost savings.
3. Improve customer satisfaction
Manufacturers can develop better customer relationships and build customer loyalty with the personalization and efficiency capabilities an eCommerce platform offers. Based on a customer’s browsing and purchase history, manufacturers can present customized promotions and display contracted pricing on their website. An online account portal provides logged-in customers access to their invoices, order history, shipment tracking, and more. Quick order pads, favorites lists, and multiple payment options give customers more tools at their disposal and the option to shop when and how it’s convenient for them. A stellar online experience creates a satisfied customer who then becomes a lifelong customer.
4. Add another revenue stream
The demand for eCommerce continues to grow as the preferred purchasing method by buyers. Industry research from Forrester supports this claim. In their 2022 B2B eCommerce Forecast, they estimate B2B eCommerce sales will hit $3 trillion by 2027 – that’s nearly double what they were in 2021. Manufacturers can reap the financial benefits of this digital commerce surge and gain full margins for their products while they’re at it.
5. Create new business opportunities
With a direct line to customers, an eCommerce site enables manufacturers to gain valuable feedback to help them better innovate and evolve their brands. New insights and streamlined selling give manufacturers the ability to improve assortments, expand into new verticals, markets, and locations. From innovating and expanding their business to becoming a differentiator in their industry, eCommerce provides manufacturers with multiple opportunities to future-proof their business.
Now is a pivotal time for manufacturers to develop a digital strategy that includes a strong online presence with a customer-centric eCommerce site. Unilog’s suite of connected product content and commerce solutions for manufacturers can put you on track to drive revenue and grow your business. Contact us today to see what our CX1 Platform can do for you!