The Internet’s large-scale global penetration has spawned an increasingly large number of technology and web-savvy consumers, creating a huge opportunity for both industrial manufacturers and their end customers. Over the past decade, the application of e commerce in manufacturing and industrial distribution, has evolved from basic communication and transaction channel between buyer and seller, to an end-to-end collaboration medium between all stakeholders. This collaboration is driven by companies looking to increase sales by offering online product recommendations and promotions, as well as end-customers seeking the rich and personalized online experience that many retail Web sites offer.
“The industrial manufacturing sector is leading the U.S. economy out of the recession on the strength of a number of key growth strategies. Selling into new industries, innovating to develop new products and services, and leveraging the Internet to pick up the pace of business are the top growth drivers. Of the 1,176 respondents to the survey, 71% said their online strategy would be important or critical. The Internet, it turns out, has taken center stage in this recovery.”
Three years later, as recovery out of the recession is no longer a focus for manufacturer’s and the industrial space, but instead maintenance and sustainable growth, the 2013 Industry Market Barometer study from ThomasNet stated:
“One major finding from the study is that websites are soaring in the role they play in business development. For 2013, nearly three times as many manufacturers (62 percent) as compared to 2012, say their websites will have the most impact on securing more business. In 2012, respondents ranked a company’s website 6th in reaching current and prospective customers as a means of building business.”
Manufacturers have now gone from thinking about implementing an application of e commerce in manufacturing, or an online strategy, to now seeing the industrial space executing internet and e-commerce applications as a way to grow and acquire new business. Three years. This is the speed of manufacturing today as it applies to business.
Effective e-commerce lies in the ability to deliver a buyer-centric and engaging online experience that enables customers to interact and transact with the brand and allows manufacturers to reduce administrative costs, increase sales and improve brand loyalty. This is achieved by reducing costs through the following means:
These platforms will have plugins and applications available to help manage the experience on both the customer’s and merchant’s side, such as freight shipping applications, to aid in accurate shipping quotes to serve up to the customer in the shipping cart, and easier freight management for the shipper.
To achieve the above stated objectives, industrial manufacturers will need to:
E-commerce is a way for manufacturers to experiment with new products without risking a significant investment. Instead of setting up brick-and-mortar stores, or keeping inventory on hand, you can start offering this new product on your new store:
Manufacturing is rapidly moving toward a multi-channel commerce model that integrates several channels (e.g. online, print catalogs and sales teams) into a single, unified ecosystem. Those manufacturers who achieve effective application of e commerce in manufacturing stand to have a competitive advantage above those manufacturers stuck in a brick and mortar only world. Looking ahead, leading manufacturers will take the multi-channel concept a step further and prioritize the implementation of omni-channel commerce platforms — technologies that deliver seamless shopping and fulfillment experiences across all possible connection channels. We explore multi-channel and omni-channel commerce in the manufacturing world in more detail.
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