By Ajay Tiwari, Vice President & Global Head Manufacturing, CPG & Aviation, Birlasoft
In these uncertain times, there is a need for a few manufacturers to rethink their current business models and introduce alternate revenue channels to counter the economic effects of the slowdown. With the growing needs of the customer, among others, to either add new revenue streams or expand their reach to alternative market segments/geographies into other geographies, manufacturers need to focus on establishing a relationship with them and provide an outstanding customer experience. Manufactures are looking for an omnichannel platform for a fully integrated buying experience. They need to invest in building scalable digital experiences that foster growth and superior customer experience. Continuous and active engagement between the consumers and the brands results in customer retention, which increases revenues and profits. It’s high time manufacturers work on their B2B e-commerce strategy to navigate through these tough times.
The global B2B e-commerce market will reach USD 21 trillion by 2027, expanding at a CAGR of 17.5% in the period 2020-27, says a leading research report. This trend will reflect across all businesses, including manufacturing.
The strict lockdown restrictions in the wake of Covid-19 have shuttered industries across the world, and now there is an urgent need for manufacturers to adapt their business models to anticipate the growing needs of their customers.
Manufacturers are going through a recessive period in economies, and multiple industries are experiencing a back-order situation for inventory items. Aspects of customer experience, such as delivery preferences, payment options, buyer uncertainty, and travel restrictions, disrupt the supply chain networks impacting the relationship between manufacturers and consumers.
With employees at manufacturing organizations shifting to a remote workforce, there is also an urgent need for manufacturers to adapt their e-commerce strategies to anticipate the growing needs of their customers. The pandemic has resulted in the emergence of digital commerce as the norm. Manufacturers need to develop new approaches to address the situation and shift their focus to building relationships with their customers.
The business needs of the manufacturer at the time of the pandemic
As a result of the pandemic, some manufacturers need to turn to a touch-less, digital model and engage electronically with their end customers. A complete buyer experience encompasses other aspects of the service, such as delivery models, varied payment options, and customer service post-purchase. Building such experiences calls for a change in the functioning of B2B companies. Manufacturers need to install business solutions that create superior digital experiences for their customers.
With a sudden lockdown of industries, it has become difficult for companies who rely on brick and mortar for sales and have no e-commerce capabilities to adapt and invest in a new strategy that addresses the present circumstances. They will have to pivot and quickly transform to deploy a storefront that can efficiently attend to the current demands.
Companies that already had a digital strategy installed can shift to a remote model and employ the needed action plan. However, they face challenges with delighting consumers through digital experiences, including listening and responding to the customer’s voice.
How are manufacturers executing their B2B e-commerce strategies?
Manufacturers have turned to various B2B2C e-commerce tactics that foster revenue growth and superior customer experiences. We list down ten tactics that manufacturers should adopt:
1. Enriching the commercial process for the customers with the help of new systems that support online buying.
2. Using technology to approach customer challenges by introducing concepts like customer communities that let customers discuss their problems and seek guidance on areas of mutual interest as it relates to products and offerings on the menu.
3. Modernizing their applications by leveraging information assets or creating high-performance platforms using big data analytics. Big data can provide market intelligence that enables better decision making.
4. Making the process more personalized and less transactional allows them to earn customer loyalty and develop lasting relationships throughout the buyer journey.
5. Content and inbound marketing increases brand awareness and generates traffic.
6. The introduction of mobile commerce and split testing can be applied to website navigation flow, page layouts, etc.
7. Harnessing marketing automation platforms and run data-driven, outcome-based programs with end customers.
8. Harness customer relationship management platforms to track management and communication around sales opportunities around servicing, parts, regional trends, and drive better visibility around demand forecasts.
9. Use connected machines data to predict downtimes and potential demand for parts and drive enterprise planning.
10. Use technology to drive customer surveys and drive tangible action to work on the feedback for elevated customer experiences and process improvements across quality, field servicing, etc.
The decline in demand for new inventory due to unstable time frames and imposed regulations has led to manufacturers turning to aftermarket services as a constant revenue source. A growing number of Original Equipment Manufacturers (OEM) are devising strategies to scale their aftermarket services. The aim of building these strategies to drive revenue, high profitability, and improve customer experience. In addition to building great CX, one of the other objectives is to drive customer loyalty by providing continuous support, which can make the customer willing to pay a premium price.
The costs of not building an E-commerce stream
There is a need for manufacturers to redesign their sales strategies around the customer’s needs. Several organizations will perish if they are unable to employ customizable and scalable solutions. This situation has provided a new opportunity for some companies to build new customer bases and drive customer loyalty. Imagine a situation wherein an organization that doesn’t have the presence to serve the needs of a vast customer base. By harnessing a B2C portal and building an end-user customer marketing strategy, they can create a revenue stream without any CAPEX investment. By not doing this, the organization loses out on two fronts: revenue opportunity loss and inability to provide aftermarket services and customer needs.
With mobile phones and internet facilities becoming cheaper and more easily accessible, an increasing number of customers are present on social media platforms such as Facebook and Instagram, influencing their buying decisions through advertisements. They need services that are omnichannel centric and provide a fully-integrated shopping experience. This need demands the B2B to offer a customizable workflow engine that regards interactions and relationship building with customers as its topmost priority and integrates that with extensible solutions.
The companies that do not change their business models and offer an outstanding customer experience will face price pressures from their competitors that offer similar products/services with exceptional customer experience. Eventually, they will fade out due to revenue drought, cost pressures, and low costs of switching to competitors for the customers.
What are the long-term advantages?
The situation presented by Covid-19 has provided manufacturers with an opportunity to enhance their digital sales strategies and invest in a new business model. According to research conducted by The Rosetta Consulting Group, customers who intensely engage with brands make regular purchases and spend more on each transaction. Manufacturers with success in customer experience will rely on a relationship-building model that will drive loyalty and retention from the customers, allowing for premium pricing, which will drive revenues and profits for the company. In a successful model, B2B e-commerce sales would channel to drive increased site traffic, order volume, and revenue, providing the best-in-class user experience that improves efficiency, productivity, and loyalty.
Manufacturers are facing an unexpected decline in revenue amid Covid-19. With many small-scale companies already permanently closed due to no digital support or availability of resources to employ digital strategies, it has become crucial for manufacturers to move to B2B e-commerce to stay relevant in these uncertain times. A prioritization of customer experience, combined with a practical approach, would allow the manufacturers to overcome the gap that the current pandemic has enforced between manufacturers and customers. With many companies already investing in digital models that align with the customers’ current needs, it is safe to say that Covid-19 has presented an opportunity for the manufacturers to accelerate their journey.