By Heather Williams, CEO and co-founder of Sourcing Playground.
E-commerce has completely redefined how we as consumers buy goods and services. Online is now dominating and those who have not adapted to the change in customers spending will be missing out. This is also very true and even more prominent in the B2B landscape. In 2017 the gross merchandise volume for B2B was $7.66 Trillion compared to that of the B2C market which came to $2.14 Trillion. This growing gap between the B2B and B2C market has created enormous amounts of opportunities to those companies adapting to the change in the market.
Just like the retail sector, early eCommerce adopters in the manufacturing and supply sectors will gain huge market share and ensure they are positioned correctly during the digitalisation of the manufacturing sector.
When you think of new technology within the manufacturing sector you would initially think of Industry 4.0, IoT and connected hardware however these new technologies, albeit a step in the right direction, are focussed on the manufacturing process and production itself. There are however huge opportunities that lie in the operations of the business including: digitising sales and marketing teams, online communication and account management, cloud-based project management and workflows. All of these steps are crucial aspects of the customer journey for a B2B buyer when working with manufacturers. These aspects of the manufacturing process however are often overlooked by manufacturing companies and not considered vital in the acquisition and retention of clients.
This hindsight might give way to answering the fact that a huge 56% of B2B buyers are not satisfied and feel their purchasing needs are not currently met. Areas such as better digital and e-commerce experiences.
Let’s start with Why?
– The B2B Buyer has changed.
Almost half of all B2B buyers are Millennials. This is driving a new wave of procurement teams taking their B2C ecommerce expectations to work with them and demanding more within the B2B landscape. Although they differ, the sales process and the buying process (the basic customer journey) remains the same.
These buyers are demanding more and are changing the B2B purchasing journey. Gone of the days of scrolling through catalogues, making phone calls, attending trade shows once, twice a year. They are heading online using search engines, online platforms, suppliers’ website to enhance their experience. Manufacturers and suppliers who are ahead of the game and reward the buyers with an enhanced online experience will earn their loyalty.
“Ever since ecommerce giants emerged on the B2B competitive landscape…[the] majority of buyers are expected to make half or more of their work purchases online. This trend will likely grow as more purchasers find that procuring products and services from a website is more convenient than buying from a sales representative… It will take time for all suppliers to shift to the online sales channel, therefore creating a gap between the traditional B2B sellers and the modern buyers.” Gavin Angell, Development Director at The Dorchester Group
In a recent study by Mirakl, Oracle of B2B purchasing – it found that 87% of respondents generally buy through marketplaces, making it the most widely used channel among all others
Compare to that of only 14% of respondents who prefer person-to-person sales, including salespeople, customer service, or in-store interactions. This demonstrates a clear shift in their purchasing journey moving away from traditional direct sales approaches to a more automated online experience.
Even though B2B buyers generally would prefer to use online there is evidence to suggest that the technology has not caught up with their expectations. As 73% of B2B buyers generally use digital channels – however only 11% claim digital is their preferred method to buy at present, indicating there is a demand for better digital experiences. The demand is clearly visible from buyers however currently they are not given the correct tools and online experiences for it to become part of their everyday purchasing journey.
This is where the greatest opportunities lie for manufacturing companies to increase their new business and attract and retain their user base.
Buyers see online to help and improve with the following:
- Ability to live chat with customer service
- Ability to pre-order and/or back-order products
- Ability to schedule orders
- Loyalty programs
- Purchasing from mobile devices
- Different payment options
- Provide more manufacturing options & greater choice
There is a clear shift in purchasing behaviour from traditional methods to online which can be facilitated through online marketplaces and procurement tools.
The adoption of digital tools among manufacturing companies
It is worth looking at the adoption of ecommerce and online services that are offered from the supplier side to get an understanding as to why there is such a gap between buyers’ expectations and the current options available to them.
Ecommerce and digital marketing & sales are part and parcel. When it comes to the manufacturing sector – they “are behind every other industry in terms of marketing.” For a sector that strives for innovation, forward thinking processes and new way of reaching production efficiencies, B2B manufacturers are notoriously slow in the adoption of digital marketing and online tools.
Manufacturing companies will find it harder and harder to sell their products, services and technologies to new clients, if their clients can’t even find their brand online. B2B manufacturers are “are behind every other industry in terms of marketing.” This hindsight is surprising considering the size of the sector and its impact into the wider economy. It’s interesting to see how such a huge sector navigates itself in the modern, online world.
This lack of adoption although quite shocking can be considered to be a great opportunity for those that are forward thinking and adopt new ways of reaching new buyers and working with their existing client base.
Currently just 8% of manufacturers had a dedicated marketing team in 2015 and further still – only 1% of them rated their marketing as ‘sophisticated. The slow adoption of ecommerce, digital marketing and online cloud-based processes within the manufacturing sector for their marketing, sales, communication are greatly due to the fact that within a ‘typical’ manufacturing company often, there is no dedicated team. When there is no driving force within the company to project new methods, communication means, marketing efforts then the company relies on the ‘old ways’ and ‘well it’s worked in the past’ mindset.
We will see over the next coming years that the companies who are taking a new approach and considering the benefits of ecommerce and digital marketing will see a great adoption from buyers and likely see greater loyalty from their customer base.
The benefits for buyers
Online solutions including marketplaces allow buyers to receive:
- More options
- Pricing transparency
- Less negotiation/improved sales process
- Better customer experience
- Structed driven process
- Trusted experience enhanced with transparent peer review and ratings
- Verification / qualifying process
The benefits for suppliers
- Access to new markets – online marketplaces offer an unrivalled access to manufacturing companies who are looking to extend their network and target new markets & sectors. The sales & marketing efforts online can be tracked and analysed to gain better understanding of what works best more than that of traditional methods of customer acquisition.
- More efficient operations – when sales staff are all working from cloud-based tools, with centralised workflows with communication with new and existing clients in one place it ensures that the sales teams are more efficient.
- Customer experience driven – online digital tools force more transparency for communication, this puts the onus on the suppliers for better customer experience. For those who are looking to project and ‘good’ professional image online then ensuring their existing users had a good experience using their company is paramount. These improvements have made great waves in the freelancing, outsourced team industry with online platforms like UpWork, Odesk, Freelancer.com.
- Loyal customers – buyers who are more satisfied with their current suppliers remain customers. The truth that moving production to new companies is a massive cost both time and money and one that is rather avoided if the buyer is satisfied with their current supplier.
- Increase in sales and new business as online marketplaces offer a more scalable customer acquisition channel as opposed to tradition direct marketing means.
How can manufacturers adopt a more digital way of working?
Those manufacturers who are forward thinking and looking to position themselves at the forefront of best in class customer experiences will find that it can be easily achieved through digitising their sales, communication and online marketing efforts.
Manufacturers need to take advantage of the new opportunities that emerging online platforms offer. By putting in the work to make the most of these platforms will give way to huge opportunities reaching new clients and ensuring the retention of clients over the long term.
One such platform is Sourcing Playground, a new emerging platform that is looking to help brands, buyers to find and work with trusted product manufacturers, transforming the industry with trust, transparency and structure.
Early manufacturer adopters are already seeing the increased benefits from it, including raising the profile of manufacturing companies online, improved access to new markets and new business, better communication methods with existing clients.
Manufacturers that join in early are and the most likely to reap the benefits of these new platforms.
About the author
Heather Williams, ex Buyer turned tech Founder. CEO and co-founder of Sourcing Playground, Heather Williams was a buyer in Dorset when the idea for Sourcing Playground dawned on her. While visiting trade shows in Hong Kong, she realised the difficulty buyers faced in finding good quality global manufacturers online. She recognised that, apart from investing in travelling to international trade show and exhibitions, there was nothing to facilitate new business connections online with manufacturers from around the world.
She teamed up with partner and web designer Fred Russias to create Sourcing Playground, later securing a £200K seed fund while at a networking event in Dubai.
Since then, Heather has also been nominated for a number of accolades, including making finalist for the Venus Awards’ Entrepreneur of the Year. She was also a nominee for the Editor’s Choice for Women in IT Awards and finalist for the Young Entrepreneur for the National Best New Business Awards 2019.