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How COVID-19 changes the manufacturing and wholesale business.

We speak with Andy Stanis, our General Manager of Intershop in North America, about the challenges that B2B companies are facing while adapting to "the new normal" due to the Covid-19 pandemic.

  1. Andy, the worldwide situation has changed the way B2B businesses are operating at a rapid pace. What are the three major challenges manufacturing and wholesale companies were telling you about the past 4 months and what role does e-commerce play here?

     

    Andy Stanis HeadshotMany companies we've been talking to realized first-hand just how tenuous their supply chains really were. Concepts such as just-in-time inventory management are best suited for ideal scenarios which no one has been operating under.

    Read all about the State of Digital Innovation in Manufacturing!

    Further, reliance on suppliers in countries such as China and India proved challenging because they were being directed to retain products for their own use or dealing with severe restrictions on allowing the people into the plants to manufacture the goods.

    A solid e-commerce strategy and solution would have built in better redundancies and offered key insights faster, allowing for more rapid adjustments.

    Many realized under the crushing pressure of just trying to stay in business, that they were ill prepared to operate their business and serve their customers online. It’s shocking to think that many companies are still way behind the curve in terms of digital transformation, but they are.

    They’re wrapped around the axle with “early 2000’s” concerns such as who gets compensated for sales or not disrupting their distributor network. Meanwhile, the world continued to move online without them. Or at least largely without them as many made half-hearted attempts to sell online by enlisting marketplaces or other mechanisms who will take most of the profit and their customer relationships.

    Manufacturers struggled to maintain customer trust due to a lack of business continuity or supplies. Just as in direct-to-consumer, once your buyer finds out they can source elsewhere—they will.

    Loyalty is only as good as your buyers most recent experience. With the lack of flexibility and features in many marketplaces or cheap direct-to-consumer e-commerce solutions meant to sell socks not intricate business-to-business products and services, many saw clients leave in droves. They may or may not return.

    Another area of deficient online selling by manufacturers, which the pandemic has thrown into sharp relief, is a fundamental lack of Customer Self-Service.

    By cobbling together a Direct-to-consumer e-commerce solution purpose built as a one to many solution, very basic differences of a B2B service landscape were not considered and have disastrous ramifications: Payment is only possible by credit card, prices and catalogs don't reflect individual agreements, shipping is only possible to one (invoice) address and high minimum order values or fixed product count limit the customer. Worst-case scenario, you're giving away critical profit and control to a company such as Amazon.

  2. With some countries slowly reopening the economy, we still don't really know how the new normal will look like. But what's the short-term impact you expect this crisis to have on the B2B industry?

     

    Short-term has been about saving the business. Manufacturers who will make it through this pandemic will rapidly be fighting for relevancy. Have your customers shopped your competition? Do they offer a better online experience? If the answer is yes, you’re toast in the near, not long,term.

    There is increasing pressure on digitalization efforts, but many projects we’ve discussed with prospective customers have felt frantic. This scatted approach has been brought on by the acceleration from the pandemic.

    What was previously a trend to digitalization, now becomes scary and intimidating  Job One. The transition to B2B e-commerce will now happen faster and the industry will overcome 3-5 years of buyer resistance in a few months! B2B commerce is the new normal and companies have a very short window to catch up and keep pace with well-funded competition.

    The smart money knows this is a once-in-a-lifetime opportunity to take market share from the dinosaurs. This culling of the corporate herd will now happen in a lightning fast way.

  3. What do you advise companies to do next? Is there any fast-track solution?

    Honestly, do anything. So many people and companies are hung up on making the absolute right decision that between steering committees and consultants with 20-page spreadsheets, they’re caught in paralysis analysis.

    This week alone, we had 10(!) prospective customers telling us that e-commerce was a 2021 initiative. Excuse me, WHAT???!!! Pick a partner that can scale with you, that’s purpose built to support B2B (while offering a great B2C like experience) and GO!

    Read all about the MVP approach

    At the same time, don’t turn this effort into an ERP implementation! E-commerce efforts are daunting even for seasoned professionals, yet one can rip a page from the Agile Manifesto. Build a starter store on technology which will scale. Then fund future phases with the profits.

    This is only achievable on a platform that will differentiate you from the competition and allow you to understand your customer preferences. In other words, not a marketplace and not some B2C software shoe-horned into a B2B patch. Heaven forbid you should buy e-commerce from an ERP provider—that’s just asking for trouble!

    And remember, if your solution looks and behaves like everyone else’s, you have just won the race to the bottom. NOW is the chance to positively contrast your customer experience away from Amazon or an Instacart.

  4. Andy, what´s your personal take-away out of this? Did you expect to face a pandemic in your first year as General Manager at Intershop NA?

    (laughing)

    Yes, I absolutely based my first year on a global pandemic! But seriously, no of course no one, least of all me, counted on this happening. Among many associated concerns, chief among was not being able to get together with our treasured customers and partners at our annual inpulse event.

    No one can predict the future. Few saw this coming and few were well prepared. That doesn’t make you a bad person nor your employer a bad company. Now, focus on what truly matters. For me personally, it’s family. For me at work, it’s our customers and our staff.

    I look forward in anticipation of truly great things to come. I am proud of how our team has performed, proud to help shape the future of online commerce and proud to see our customers be bold in the face of uncertainty with a solution that´s allowing them to swiftly adapt and drive online selling.

    If you would like to see how one of our long-standing customers is already prepared for the “New Normal” get first-hand insights as we spoke on a recent e-conference.

    Watch Replay now !