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A CEO's POV: The benefits of e-commerce for the manufacturing industry

B2B e-commerce, E-commerce by industry, E-commerce tips, E-commerce trends

Michiel Schipperus June 1, 2020

Even with all the disruption we’ve seen in 2020, many manufacturers struggle to evolve beyond behind their traditional, offline ways of working. Unfortunately, this hesitation to digitize is holding back their potential for business transformation. Let’s take a look at why that is, and explore the benefits of e-commerce for manufacturers (beyond just launching an added revenue channel).

How the world of B2B sales has changed for manufacturers

Transformation in the manufacturing industry is being heavily driven by consumer behavior: namely, the move we’re seeing toward digital channels. And manufacturers that still primarily serve clients through phone, fax, or email risk losing the loyalty of these customers, especially as their worlds and preferences become even more digitally-driven.

According to Digital Commerce 360, even now in 2020:

“80% of companies still depend primarily on their internal sales force to drive revenue, and that nearly three-fourths of manufacturers—70%—don’t have a comprehensive digital commerce strategy in place.”

But this simply isn’t good enough, and threatens the longevity of manufacturers’ success. Today’s B2B customers want to be in control of their experience online, so you need to offer self-service capabilities in addition to just a transactional website. And when engaging with your web store, these customers also expect to be able to rely on accurate information, whether it is inventory levels, product details, their order history, or their own negotiated discounts. They also want to be able to do so whenever and wherever they want.

Their world is online. Are you? Here is why you should be:

  • 75% of B2B product purchases are made online.
  • 1 in 3 buyers would choose a vendor solely based on the ability to place, pay for, track and return orders online.

Still, these are just the basics you need to succeed. Let’s look at the business side of things: what you stand to gain that also helps strengthen customer relationships.

How do manufacturers benefit from e-commerce?

The advantages of e-commerce for manufacturers are clear: if you can provide a convenient and informative online buying experience for your B2B customers, you will be their go-to supplier. But what other benefits are there for the application of e-commerce in the manufacturing industry?

1. Provide your clients with a personalized catalog

As a company in the manufacturing industry, you have an extensive product catalog with a wide range of products that you want to share with your customers. But prices for these products can vary depending on the customer, segment or other factors. As a result, you may hesitate to share your pricing information online.

In addition, tailoring your catalog with personalized product suggestions based on your customers’ needs can help you increase conversions through cross and upsell opportunities.

Price and product personalization are both possible with a B2B web store, by connecting your assortment to a personalized account. Struggling with a large product catalog? Get tips on how to offer your entire catalog online.

2. Ensure visibility for spare parts

Businesses in the manufacturing industry often have high traffic for spare parts. An ERP-integrated e-commerce platform lets you match these spare parts with the more complex products customers have purchased. This makes cross-selling and upselling easy and efficient. As a result, customers don’t have to spend any effort on searching for connecting parts. Such application of e-commerce for manufacturing therefore helps improve both service and efficiency.

3. Let customers configure products online

Another advantage of e-commerce for manufacturing is the ability to configure products. Your customers can configure and match products that differ in shape, size and color in your e-commerce platform. This means your customers can customize products to their own requirements, without the help of your sales or support department. This saves both your customers and your company time and effort.

Download the ultimate guide to e-commerce from planning to going live

4. Sell your complete assortment online

As a manufacturer, your catalog can contain thousands of products. Of these products, only a small percentage is known to and purchased by the average client.

Adding a B2B web store to your sales channels helps you inform your customers about your complete assortment. Tools like quick search, search filters, and search suggestions will guide customers through the goldmine of products. Customers can now learn about new and additional products, as well as alternatives.

5. Attract new customers

Search engines, such as Google or Bing, play a significant role in how (potential new) customers find you. During the B2B buying process, almost half of customers conduct web searches to look for information, solutions and suppliers.

Therefore, having a strong online presence, optimized for search engines, is key to reaching new prospects and stay ahead of the competition. Google and other search engines can then connect your customers to the valuable information you provide online.

What’s the best way for manufacturers to launch an e-commerce channel?

The manufacturing industry is complex, and translating your business to an online environment with minimal disruption can initially sound like a challenge. But it doesn’t have to be. For instance, most processes can stay the same. You can look at it as just another channel that your customers can use to buy your products, and as long as you choose the right e-commerce partner, you have a strong foundation.

Discover the top 13 B2B e-commerce providers by downloading The Forrester Wave™ 2020 report

For example, with a B2B e-commerce solution that’s integrated into your ERP system like ours, your employees can still work with your current system and improve their workflows. Thanks to this ERP integration, Sana Commerce customers have, on average, benefited from an 11% increase in returning customers and 16% decrease in order errors (according to customer-reported data).

One last item I wanted to cover, however, is: what is the big picture? If you gain these benefits from e-commerce, that’s great. But what do you do next? And why should it be a priority?

The business impact of e-commerce for the manufacturing industry

E-commerce isn’t only about buying and selling online. It’s not just about engaging customers online either. E-commerce should be a business tool, and should allow your organization to benefit from larger digital transformation and business evolution initiatives.

For many manufacturers who have already invested in e-commerce strategically, this has proven true:

  • Currently, 44% of B2B businesses believe e-commerce is key to digital transformation because it drives customer experience and streamlined integration across their tech stack (including ERP systems).
  • Over 3/4 of B2B organizations feel e-commerce helps them meet business goals, including supporting innovation and playing a role in the organization’s broader digitization plans.

For more data like this, and insights into how manufacturing e-commerce, supply chain optimization and business transformation can all work together to take your organization to the next level, read our latest Supply Chain E-Commerce Essentials Guide for Manufacturers.

 

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