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The Expanding Use of E-Commerce for Manufacturing Companies

e-commerce for manufacturing

How the Internet has transformed the manufacturing and order fulfillment process is no small secret. However, the realm of e-commerce for manufacturing companies is rapidly growing, and modern manufacturers are starting to see a shift from business-to-consumer (B2C) sales to business-to-business (B2B) sales. Manufacturing and shipping process have historically focused on producing a product, sending it to the store, and having a consumer purchase the product. However, e-commerce has created an era in which the B2B and B2C side of e-commerce are merging. In fact, e-commerce platforms are expected to grow to more than $2 billion by 2019, at a compound annual growth rate of approximately 12 percent, asserts Peter Sheldon and Michael Yamnitsky of Forrester Research. Take a look at how changes in e-commerce will impact manufacturers in the coming year.

What's Driving the Need For Better E-Commerce For Manufacturing Companies?

Millennials are becoming a dominant factor in the manufacturing space, and millennials make up 34 percent of all sales professionals. This outnumbers the baby boomer population in sales by five percent. Additionally, consumers are starting to demand a personalized, low-cost, and reliable solution to their needs.

Since the Internet has inherently given birth to the age of smartphone, more consumers are looking for faster, customer service-laden experiences. Yet, this is a tricky ideal as expanding customer service would seem to contradict the self-service demand in e-commerce, explains Ian O’Brien.

Essentially, consumers want to be able to reach customer service as needed, but consumers want to see and experience a platform that does not really need any customer service. Consequently, this goes back to the level of content in an e-commerce for manufacturing platform.

E-commerce for manufacturing companies is also on the rise thanks to the general growth of e-commerce expected to continue through 2018 as shown in the graph below.

e-commerce for manufacturing growth of e-commerce

Content Will Become Kings

Retailers and companies have already experienced the potential pitfalls of poor quality content on their online sales channels. In fact, Google penalizes businesses, individual parties, and other organizations who fail to deliver a satisfying, non-spun (“original and thought-provoking”) online experience. The self-service side of an e-commerce for manufacturing platform must operate efficiently and reflect the value, resolve, and knowledge of the respective company.

As explained by Bob Barr,  content management will become one of the most important aspects of a manufacturing e-commerce platform. Although much focus relies on differentiating product catalogs and information, which may number into the thousands, if not tens of thousands, part of the issue in content management revolves around how it affects the customer service experience.

For businesses in the B2B market share, more businesses are looking for ways to operate and make transactions between other businesses in the digital space. As a result, the number of e-commerce-based transactions from the manufacturing sector has grown exponentially. This lends itself to the need for a self-sufficient platform, which forms the basis for providing and delivering information to potential buyers.  

Cloud-Based Systems Will Help to Merge Existing, Legacy Systems With Newer Technologies

Historically, manufacturers have use many different systems in the production and shipment of a given product. These systems included an enterprise resource planning system, a transportation management system, a warehouse management system, and a system for managing and tracking returns and refunds.  Unfortunately, many of these systems were not originally designed to operate in tandem with each other, and communication between outdated systems is nearly impossible. However, APIs, Integration, the Internet of Things, other connection services and cloud-based technologies are helping organizations migrate from legacy systems to an interconnected, smart, and predictive systems. Ultimately, this will help manufacturers thrive in a digital space, especially as the role of competition becomes even more pronounced.

Take a moment to think about traditional competition and competition in the online marketplace. Traditional competition left your consumers with few options. However, modern competition, fueled by a growing number of entities in e-commerce for manufacturing solutions, makes your competitors from around the world a potential threat to retaining and acquiring new customers. As a result, an existing manufacturer must be willing to take many steps to merge with the potential offerings of other businesses, such as those in the aftermarket service parts supply chain, to effectively retain and gain new customers.

The Aftermarket Parts Supply Chain Will Grow Reliant on E-Commerce

Most modern products are not designed for one-time use. This can be exemplified by viewing how manufacturers must create parts for the automotive industry. In a report by Frost & Sullivan, asserts Alan Sage, 10 to 15 percent of all global sales parts for automotive aftermarket purposes will be used and processed in e-commerce for manufacturing platforms by 2025. As a result, manufacturers face two potential results:

  • Partner with distribution centers, dealers, and consumers in the goal of creating a superior e-commerce solution.
  • Cut out the other parties, and risk losing a significant share of the market.

Although the service parts supply chain would seem to survive a non-e-commerce solution, one critical aspect remains, automotive service centers and technicians will probably be looking to the competitors who do offer an e-commerce solution for the purchase of parts for needed repairs. Ultimately, avoiding the merging of the manufacturing and distribution processes would be a travesty for manufacturers.

E-Commerce for Manufacturing Will Become Increasingly Omnichannel in Approach and Execution

Customers do not want a partially fulfilling experience: they want an over-the-top, no-holds-barred experience in e-commerce. Manufacturers must consider how an omnichannel experience impacts e-commerce. An omnichannel solution focuses on connecting an online and a brick and mortar establishment into a single, unified solution.

For example, Walmart allows customers to purchase products online, which may be directly from the manufacturer in some cases, pick up these products in the store, or even return them if a problem arises. Walmart probably represents one of the most effective omnichannel solutions in e-commerce in the world.

B2B e-commerce spending will exceed $1 trillion dollars by 2020, elucidates Oren Ezra. An omnichannel solution is practically impossible without e-commerce, and conversely, e-commerce for manufacturing is difficult to manage without an omnichannel solution. Customers want to be able to have options and maintain accountability with the manufacturer at practically any stage in the shipping and order process.

Ultimately, an omnichannel approach allows a business to gain additional trust from the consumer, which results in increased revenue, better customer satisfaction ratings, reduced costs, fewer mistakes, better productivity for employees, and less rework. Obviously, omnichannel solutions will naturally lead to reduction in the number of employees in sales positions. However, this means more heads will be available to work on boosting production, which results in subsequent positive experiences for all involved parties.

E-commerce for manufacturing companies is changing how businesses do business with other businesses. The idea of always selling the traditional way of manufacturing to retail only is dying, and businesses need to embrace the idea of working in a multi- or omni-channel environment, to include e-commerce, in order to achieve a positive growth and return on investment. Consumers are growing more powerful through social media and the Internet, and manufacturers must be ready and willing to adapt to their demands in 2016. Failure to do so would be a futile effort in a world where a dead smartphone is tantamount to a wasted day.

 

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Adam Robinson
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
Adam Robinson
Adam Robinson
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