The economy is changing, and so is the pace and nature of digital commerce and transformation. Against the backdrop of labor shortages, supply chain disruption and economic challenges, U.S. manufacturers (and distributors) grew total B2B sales in 2022 15.4% to $14.89 billion. More significant, B2B e-commerce grew even faster than total B2B sales and accounted for 13% of all manufacturing sales, according to the latest B2B e-commerce forecast report for manufacturing and distribution markets. Many organizations that were once hesitant to embrace B2B e-commerce are now developing new initiatives, updating strategies and upgrading their technology with new cloud-based applications like headless commerce and AI.
I spoke with Andy Stanis, EVP and Managing Director at Intershop North America, to discuss how manufacturers can adapt their sales tactics and thrive even amid economic uncertainty.
Andy, in general, how does e-commerce revolutionize the way manufacturers conduct business?
B2B buyer behavior has shifted dramatically over the past two years and digital self-service options are becoming even more critical as professional buyers expect more control over their purchasing experience. Modern e-commerce solutions enable manufacturing companies to establish and maintain increasingly digitalized relationships directly with customers, but also with their distributor and dealer networks, giving them access to detailed information they may not have had in the past. Now, rather than merely providing online order history, advanced customer portals offer services and parts throughout the entire customer lifecycle, enabling seamless interactions between vendor and customer / distribution partners. By digitizing and automating items like order management, inventory control, warranty claims, and shipping, manufacturers enhance efficiency and thereby reduce costs, and unlock revenue through significant cross-selling and upselling. Furthermore, e-commerce enables organizations to gather valuable customer data and behavior patterns, which can be leveraged to launch new products, personalize offerings, deliver targeted marketing campaigns, and elevate customer service.
Why is that important?
As B2B buyer behavior continues the digital shift, manufacturing companies must adapt their sales tactics to drive revenue growth. But not just that. This challenge becomes even more urgent in times of economic challenges and supply chain disruptions, where sales leaders must achieve more with limited resources. Survey data shows that organizations have prioritized growing with existing customers as a key objective for the next year. And so, the ability to adapt fast with a strong focus on strengthening customer relationships becomes paramount. The critical success factor for sales will be the ability to collect better data on customer behavior, and act on it, by transforming that knowledge into personalized experiences anchored by exceptional customer service.
What is the primary concern you hear from manufacturers regarding online sales?
Most companies we talk to understand the positive impact of successful e-commerce for the bottom line, yet many still grapple with where it fits into their business strategy. And how it integrates with key partners - particularly their distribution partners and end customers. They worry about conflicts and competition between different sales channels, with fear that channel partners might view e-commerce as direct competition. However, these concerns are a one-sided perspective rooted in the misconception that e-commerce solely revolves around direct sales to end-users and conflicts with existing distributor relationships. In reality, e-commerce offers many opportunities beyond direct end-user sales, and manufacturers who exclusively sell through their distributor network benefit as well.
What are those benefits?
E-commerce is more than just buying and selling online. It’s about engaging customers, whether in a direct-to-consumer (D2C) model or through distributors and dealer networks. It should be viewed as a business tool that allows manufacturers to be closer to the buying side and enhances overall business processes. Done correctly, it increases efficiency and reduces friction along the entire path of customer interaction. Further, it allows manufacturers to hear directly from end customers garnering vital, first-hand feedback about training, documentation, products, and services.
Can you provide a practical example to illustrate this?
Of course, let’s discuss KION North America. Our client’s top priority was to meet their dealer’s expectations for online purchases since they view that channel as a way to foster strong relationships with end-users and gain insights into how to improve products and services. As a result, KION wanted to build a cutting-edge dealer portal that enhances order processing and facilitates seamless communication between the original equipment manufacturer (OEM) and dealers throughout the entire sales lifecycle. With the new portal, dealers can now place and refine orders (according to the buyer’s authority level) check available inventory, and track delivery status. It also allows KION North America’s sales and service staff to access – and act on – important truck installation, returns, and warranty claims in real-time. Dealers can access truck installation reports and a bill of materials overview to better estimate costs, plan / control inventory and minimize truck downtime. The impact of the new portal was immediate. It led to a significant upswing in daily online orders and an overall increase in e-commerce sales of 96%!
What e-commerce technologies are critical for manufacturers to remain competitive in the next 3- 5 years?
Today’s B2B buyers want to be in control of their experience online. According to joint research by Forrester and DC360, more than 70% of B2B buyers already prefer to placing orders online, rather than engaging with a sales rep. To foster customer loyalty and drive repeat purchases on your e-commerce website, it’s crucial to provide self-service capabilities that cater to their needs beyond the initial transaction. We also know that personalized experiences are tied into buyer satisfaction because it helps the busy B2B buyer make the right decision faster and therefore work more efficiently. Survey data shows that an astonishing 59% of B2B sellers lost sales due to insufficient personalization on their website. Artificial Intelligence (AI) is a great opportunity to improve the buying experience by delivering personalized recommendations, intelligent search capabilities, proactive customer support, predictive analytics and more. While it may be challenging to separate the hype surrounding AI from its long-term value, AI-driven portals are emerging as truly transformative solutions in commerce, playing a critical role in improving relationships with customers and partners.
Please expand on “AI driven portals are emerging as transformative solutions”.
What started as online catalogs and information portals evolved first into transactional e-commerce sites and then digital customer portals with comprehensive self-service capabilities. AI-driven portals are the next logical development harnessing the vast potential of AI. In a nutshell, we think that AI will influence current e-commerce in a way that both the selling and buying side will be able to make more decisions guided by proactive, AI-backed recommendations.
Thanks, Andy! Anything else you’d like the reader to take away?
Even with economies disrupted all over the world, our customers are prove that an online business can continue to add real, reliable growth. Find new ways to provide immediate value to your existing customers and offer additional services post the initial transaction. If your priority is to grow with existing customers, start collecting better first-hand data. Learn how customers are using your products, services, training and documentation. Besides personal relationships with your sales and service staff, customer portals are a good way to collect customer insights.
This interview first appeared in the B2B E-commerce Forecast for Manufacturing and Distribution Markets, published by Digitalcommerce360.com and Intershop.
KION North America's new platform (mentioned above) was implemented by our esteemed Platinum Partner DSS Partners.
