Ecommerce Key for Manufacturers and Distributors
Many B-to-B companies are still not aggressively pursuing ecommerce. Most have an online presence — in fact, an extensive one. They likely have a corporate site, an online product catalog, a customer portal, and a channel or sales representative portal. Manufacturers may have different sites for each brand and global regions — often with a significant investment. Unfortunately, they frequently use different tools or platforms for each one.
For many B-to-B sites, shoppers cannot make a purchase when they find a product they want. Instead, they must contact a dealer or sales rep and wait for a call, a quote, or a customer application process. If a shopper can simply buy a product online rather than via a lengthy process – which option will that shopper likely choose?
For many B-to-B sites, shoppers cannot make a purchase when they find a product they want. Instead, they must contact a dealer or sales rep and wait for a call, a quote, or a customer application process.
Why do manufacturers and distributors hesitate to open an online store with a B-to-C like (i.e., Amazon) customer experience? The most common reasons are:
- Channel conflict;
- Difficult – too many systems to integrate;
- Customers don’t want to buy online;
- Pricing is too complex;
- Products are too complex;
- Inventory management;
- Freight and shipping;
- Complex business workflow;
- Many authorized buyers;
- No ecommerce resources or expertise in-house.
But technology solutions exist for all those issues. Innovative B-to-B companies like Grainger have made ecommerce their strategy for growth in both revenues and profits.
Where to Begin
Start with an executive-sponsored initiative to launch an online store within six months. That will stir things up quickly in your organization.
Looking for a project that will test some of the challenges listed above. Pick a subset of your products and your customers or prospects. Here are some thoughts to get started.
- Choose products carefully. Launch a store with the 20 percent of your products that likely produce 80 percent of your revenue. Customers are likely familiar with them already. That allows you to launch without having rich content for every product.
- Target a specific customer segment for onboarding or marketing. This might be your top customers. They are likely the most friendly and loyal. Difficulties would be less catastrophic with them, presumably.
- Launch a clearance site. Many distributors are in an aggressive inventory acquisition mode. They are ending up with dead inventory they don’t know how to get rid of.
- Launch a store for a specific niche. This could be a product line or a specific target customer base.
- Launch a direct-to-consumer site. This is more bold for manufacturers or distributors, but there are ways that disruption can be mitigated.
Your project should look something like this.
- Bring in an ecommerce expert to facilitate a workshop to develop a strategy and roadmap. This should include executives and stakeholders from all functional areas of your company. Develop a high-level roadmap for three years. Pick a single project to test ecommerce that can be launched within six months. Do not try to execute the entire strategy in one project.
- Assign a team of roughly three people to select a platform; it should take no more than two months. You will likely be able to start with a list of four options (or less), based on the size of your company, your industry, and your products.
- Pick a project that can be launched quickly by narrowing the scope of your initial project.
- Select a vendor with the goal of a four month implementation cycle.
- Keep it simple. Do not allow scope creep. Use default functionality wherever possible. Keep integrations to a minimum.
- Hire personnel with ecommerce experience for merchandising and marketing support. This can be in-house or external resources initially.
- Assign the project to the business stakeholders. This should be marketing and sales personnel, not information technology staff. The IT staff does not know your customers, channels, or products. Successful ecommerce projects are run by teams that understand those three elements. (I’ve addressed this previously, at “To Implement B-to-B Ecommerce, Empower Marketing not IT.”)
- Set specific goals for the project, such as revenue, customers, orders, and order size. Don’t bother with profit measurements. It’s too early for that and you won’t be able to measure it.
- Develop a change management plan. Selling online will absolutely impact customer support, fulfillment, operations, sales, marketing, and IT. Plan ahead to assess and mitigate.
Managing the Implementation
Once the project starts, focus on the original objectives and scope. Most platforms have templates based on recommended best practices. Do not design a B-to-B online store from scratch. Do not allow new features to be added throughout the project. Work with your vendor to identify must-have features. Defer the rest until future phases.
Do not design a B-to-B online store from scratch. Do not allow new features to be added throughout the project.
Once you launch, you will learn quickly about the customer experience features your buyers want. You will quickly learn the impact on your internal operations. In most cases, those are very different than when you are planning your project.
Experiment incrementally. Add more products or customers as appropriate. Target new customers with marketing campaigns. Get as much feedback as you can from shoppers. Get input from sales channels and sales reps. Get both involved in the launch and the migration of customers.
Keep your executive team appraised of progress. This should be a strategic initiative with board-level exposure. Why is it strategic? Because those B-to-B companies not investing in ecommerce are likely to experience declines in revenue, customer base, and profit.