3 Reasons eCommerce Should Be On Every Manufacturer's Agenda

Modern day technology is making B2B eCommerce platform adoption an easier transition and more manageable change for manufacturers across the globe.

Mnet 147449 Ian O Brien Lead

Manufacturers, take note: You have a big opportunity.

The B2B eCommerce industry is worth roughly $1 trillion in the U.S. alone today, according to estimates from Gartner and Forrester Research. Not to mention the industry is growing at nearly four times the rate of B2C eCommerce, as distributors like you respond to the growing demand among buyers to purchase online and on-the-go.

Modern day technology is making B2B eCommerce platform adoption an easier transition and more manageable change for manufacturers across the globe. The cloud has become a low cost, more reliable way to deliver technology. Cloud companies are driving the cost of IT infrastructure to $0 with better reliability than you could ever create in your shop. For companies who have experienced large cost-of-ownership associated with the adoption and implementation of new technologies to the business, Platform-as-a-Service (or PaaS) offers dramatically lower total cost of software.

The reason manufacturers are realizing the benefit of B2B eCommerce today is simple: There are ways to save real cost in your demand chain and improve your relationship with customers. With the right B2B eCommerce platform, manufacturers can develop best practices for reducing order costs, simplifying complex processes and increasing order accuracy, along with adapting to a new generation of buyers.

Manufacturers should streamline their order management by adopting B2B eCommerce for several reasons. Let’s take a look at some of the most prominent:

1. Your business is likely wasting money.

During 16 years of conversations with manufacturers, we’ve seen order processing costs climb to over $60 per order using traditional customer order management techniques. And the costs are even higher for problem orders, specialty orders and returns/replacements. Traditional methods require a sales team to be directly involved in the ordering process and many times a customer service function that manually manages the interface between customer problems and ERP standardized process.

A solid B2B eCommerce strategy can help you drive new sales from the Internet.  But more importantly, it can dramatically reduce the cost of ordering in your demand chain. Open, agile-oriented B2B eCommerce platforms allow the ability to create highly personalized user experiences that can be specifically tailored to every nuance of demand chain ecosystem.  These platforms allow these user experiences to be created at a lower cost than traditional software techniques. Lower cost to build means more costs to be saved.

Many companies have yielded 50 percent reduction in cost of order while simultaneously processing orders faster and with error rates approaching zero with the addition of B2B eCommerce.

For example: Burroughs Payment Systems, which specializes in ATM maintenance and service, as well as a variety of products for financial clients, was looking for a solution to support worldwide sales of their image processing technology through reseller network. Their legacy order processing was expensive, difficult to manage and had to be administered by IT staff. Burroughs needed the system to automatically recognize and apply unique pricing, purchasing and merchandising rules based on which reseller was viewing the catalog. By leveraging a cloud-based B2B eCommerce platform, they dramatically reduced costs and provided an interface that multiple roles within the organization could quickly become comfortable with using.

2. You could be making better use of resources.

Forrester predicts that one million B2B sales jobs will be lost by 2020. This is based upon the assumption that companies can and will simplify ordering for customers and employers, eliminating the need for sales reps as they are being used today in B2B distribution. The result is that B2B sales positions whose jobs are primarily “order takers” will be at risk. Companies will generate cost savings by eliminating those roles. The same will be true for customer service departments that will not receive faxes any longer or will authorize returns, not process them. Productivity and timeliness will increase, while errors will decrease. 

The positive side of this prediction is that eCommerce will create an ability to enhance the value of a selling and support team. A smaller more consultative sales team can use the eCommerce ecosystems to assess real time trends, provide comparatives to optimize market penetration and to place real time promotional orders to support local market nuance. A smaller, more informed customer service team can respond to product issues and opportunities versus order issues. 

3. Customer churn is likely.

Your customers are increasingly younger, online and mobile. The millennial generation is well on its way to becoming the decision-makers in your business. In fact, according to a recent report by The Economist, millennials now outnumber baby boomers in the workplace, taking 34 percent of the positions compared to 29 percent for baby boomers. Further, almost half of all online researchers in the B2B space are millennials.

Also of note, 42 percent of B2B buyers use a mobile device at some point during their purchasing process. The digital-first generation requires a seamless omni-channel experience, with 87 percent of them using between two and three technical devices daily. Responsivity is important for the design, but also for the functionality. Consider the checkout process, approval rules, and product search on a mobile device, and how your eCommerce solution accounts for that.

In closing, eCommerce isn’t just a trend. Implementing an effective cloud platform that fits your manufacturing business will serve your company well in the long run by reducing costs, increasing efficiency and allowing you to remain relevant amongst your evolving workforce and customer base.

Ian O’Brien is Chief Solutions Officer at Four51.

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