Customer experience expert Karie Daudt breaks down the five trends impacting the manufacturing commerce ecosystem in the coming year
We’ve all read the often quoted “trillion dollars by 2020” statistic when the topic of B2B eCommerce arises. Yet looking at some of the figures that were tossed around a couple of years ago, it’s clear the actual numbers in our industry aren’t necessarily on track with past predictions. Only a year ago some analysts were predicting $6.7 trillion for 2020.
No matter what the analysts predict, it’s clear there are factors that are limiting the potential of B2B eCommerce in the manufacturing industry. Last year I wrote about some of major eCommerce disruptors for manufacturers. One year later, we’re looking at even more change within the industry.
Manufacturers are looking at a new set of disruptors in 2018 that need to be overcome to gain the most advantage from both existing and new eCommerce solutions. Some of them have evolved from past trends, but others are new disruptors altogether. No matter what their origin, manufacturers need smart strategies to face these disruptors to move them forward into 2018.
Here are the top five disruptors I believe manufacturers must overcome to meet the true potential of their eCommerce environments, both mature and brand new:
- Direct to Customer. The opportunity is widening for manufacturers to learn more about the products customers want to buy directly, and where channels can provide additional value. Today, many manufacturers are too far removed from their customers and this clearly needs to change. Customers are demanding more information, more content, and more knowledge in general. For many manufacturers, a direct to customer model is more about lead generation and the ability to influence product engagement, than it is about driving out the “middle man.”This leaves distributors focused on building more trusting relationships with manufacturers. In fact, it provides an opportunity for distributors to develop strong channel value within targeted product categories, resulting in higher efficiency and higher profits.
- Pricing Complexities. Custom quoting processes have created extraordinary amounts of overhead within the B2B world. As more manufacturers move toward a digitally-supported, self-directed buying cycle these manual, complex pricing models simply won’t work. Special quotes and contract pricing aren’t as manageable in an online scenario. For many products, particularly those that are less complex, the market is demanding transparent pricing. Trends toward direct-to-customer sales model are accelerating need to change traditional pricing and quotation models altogether.
- B2B Marketing vs. Sales. B2B industries are too complex to warrant the death of the B2B salesperson. Yet the role of B2B sales has transformed to become more supportive of the customer experience, rather than leading it. With the surge in marketing automation tools, sophisticated personalization methods, and automated lead generation tools and techniques, marketing is taking over the driver’s seat. Bridging the gap between sales and marketing will become crucial for manufacturers moving forward, particularly where omnichannel commerce environments are concerned.
- The IoT. According to McKinsey, nearly a third of the economic impact of IoT applications will happen in the manufacturing sector. The impacts of this “smart factory” scenario are already being felt as companies begin to invest in technology to support things like self-stocking vending machines and integrated machine control. And real-world implementations of large networks of machine-to-machine connectivity are not only on the horizon, in many cases they’ve already arrived. A recent IDC survey reported over half of the manufacturers in the world are at least researching, if not piloting, some kind of IoT implementation. In many cases, they even have a component of IoT in production. Obviously this will have significant impacts on the connected commerce environments evolving within manufacturing, and soon.
- Distributor Marketplaces. It may seem contradictory given the first disruptor, but there remains a role in the B2B commerce world for distributors that can provide significant value to the customer experience. For example, we may see distributors that band together to create robust marketplaces using B2C-like strategies to boost their own products, and bury others. As more and more B2B buyers demand self-service, distributors may begin to create “mega-portals” full of support and service capability, a one-stop, many-product shop for customers that also provides valuable data for manufacturer clients. As these trends begin to disrupt the commerce cycle, manufacturers may re-evaluate products in terms of where it makes sense to go direct, and where they need to protect their newly valuable channel.
Over the next few weeks I’ll unpack each of these disruptors one by one, providing not only my perspective but the perspective of the experts at Insite. I look forward to your comments as we move toward what looks to be yet another transformative year for B2B commerce in 2018.