Are UK manufacturers leveraging the B2B e-commerce opportunity?
It’s nothing new that many manufacturing companies now have an e-commerce website. In the B2B space, 65% of businesses globally now have e-commerce capabilities. Particularly since 2020, with face-to-face selling out of the question, e-commerce shot up the priority list to become a key purchasing channel for B2B buyers.
But have companies managed to embrace B2B commerce and utilise it to its full potential? Or is digital transformation stagnating? We explore the state of the nation when it comes to adopting e-commerce in the manufacturing industry, and take a look at what companies need to be doing to stay ahead.
The big picture
While face-to-face was the primary sales channel for many manufacturing businesses before 2020, cue the pandemic, and everything changed. In-person sales were no longer an option, forcing manufacturing companies to explore digital avenues. Investing in digital transformation became a way for manufacturers to differentiate themselves in the market and better meet customers’ needs.
There’s no doubt about it, the pandemic sped up digital transformation across all industries and sectors. In manufacturing, 67% of senior manufacturing professionals claim to have accelerated digital projects after COVID-19.
Furthermore, the market for digital transformation in manufacturing is expected to grow more than 19% in coming years, reaching $767.82 billion by 2026, up from $263.93 billion in 2020.
And customers welcomed these new ways of buying. Mid-pandemic research by McKinsey showed that 60% of B2B customers found remote sales as effective as traditional sales, and that 62% would prefer to reorder products online. But at that point, only 13% of industrial companies offered digital solutions and only 10% offered self-service tools for reordering.
Let’s take Just Eat as an example, who decided to accelerate its digital transformation in order to remain a global leading player. The outcome was an innovative B2B marketplace that allows restaurant owners to purchase both food and non-food items from third-party sellers, all by leveraging the wealth of data it had at its disposal.
Spotlighting the UK landscape
Although great strides were made globally over the past two years, there’s still a way to go when we look closer to home. 94% of UK manufacturers believe the industry has fallen behind the US due to a lack of digital investment, which is impacting the bottom line, with 56% of businesses losing sales as a result.
In addition, 93% of manufacturers believe that underinvestment will lead to many of them going out of business over the next decade.
The lack of investment in digital technology is proving to be a huge blocker to productivity, but also to the customer experience. McKinsey reports that two thirds of B2B customers would rather engage through digital or remote in-person engagement, as well as that corporate decision makers are now using e-commerce at every stage of their buying journey.
And serving customers the way they want is paying off, with e-commerce driving 18% of all revenue for the average B2B company, tying it in top position as the top-producing revenue channels alongside in person sales.
It’s clear to see that the UK manufacturing industry has found it difficult to unlock the full potential of e-commerce due to the complexities of B2B operations and management. From lengthy buying procedures to large-scale product lines and bulk orders, there’s a lot to take into consideration, so we can understand why manufacturers could be hesitant to adopt e-commerce. However, new sophisticated technologies are here to help, it’s all about choosing the right fit for your business and goals.
Old business models and legacy technologies are holding businesses back. According to a recent report, Manufacturers in the UK still rely on paper for 35% of processes and manual spreadsheets are used for 49% of operations. But it doesn’t have to be that way. Digital transformation has the power to eliminate pain points – an investment manufacturing companies can’t afford to miss.
Taking action: why and how
It’s time for UK manufacturing companies to up their game when it comes to e-commerce. The stakes are high and the potential is huge. Implementing the right technology creates the opportunity to streamline operations, increase profitability and provide a seamless customer experience, as well as giving the ability to be agile to the ever-changing world.
Here’s a few technology trends that manufacturers need to be focusing on to accelerate their e-commerce operations and facilitate growth in the new digital reality:
Hybrid, omnichannel selling
Traditional selling is slowly being left in the past. Today’s B2B decision makers are interacting with suppliers in new ways, with a mix of interactions throughout the buying cycle. Ultimately they’re looking for convenience, whether that be e-commerce self-service, a video call or an in-person meeting. Hybrid selling is expected to be the dominant sales strategy in B2B industries by 2024 and is reported to drive 50% more revenue due to a deeper customer engagement.
Sales reps have always been a key characteristic of B2B marketing, giving tailored advice to customers. And this can still be done online. With the right tech architecture in place, all customer insights will be stored in a database rather than in a sales rep, helping with efficiencies and providing tailored excellent customer service.
But, there can be no hybrid selling without a strong omnichannel strategy. McKinsey reported that B2B decision makers are using more channels than ever before, doubling from 5 channels in 2016 to 10 in 2021. You need to be present at every stage of the customer’s often long, complex buying journey and provide them with the tools such as self-service ordering, ordering tracking or chatbots, to make their lives as easy as possible… and yours!
Customer insight
Getting a true understanding of your customers is critical to commerce success. For example, a common misconception is that B2B customers aren’t willing to spend at a high value through e-commerce, but that’s far from the case. 35% are willing to spend $500,000 more in a single transaction on digital channels and 15% are comfortable making purchases worth more than $1 million.
Not sure where to start? Map your customer journey. Customer journey mapping enables manufacturing businesses to understand the best route/s to guide buyers to purchase. By getting under your customer’s skin and truly understanding their unique needs, you can offer a tailored solution at every stage of the journey.
Leveraging data to understand your customers is also critical. And, customer data platforms (CDPs) are the perfect way to do just that. CDP software collates and analyses customer data from a range of sources in real-time. This allows you to gain a holistic view of your B2B buyer’s ever diversifying journey to then develop a tailored experience that will resonate most with them.
Hyva partnered with DEPT® to help it develop a new global website with three main goals at the heart of its success: lead generation, promote brand awareness and give exceptional service in every global location. The result? A new website that bridged the geographical divide between company and customer by developing a unique customer journey in every country Hyva operates.
Integrations
Integrations are key to ensuring your e-commerce platform aids your customer experience while improving operational efficiency.
The ideal B2B commerce solution will have an architecture that allows integration with other systems, or itself be capable of integrating with them. That could be quotation systems, inventory management systems or manufacturing process management.
Seamlessly connecting these systems with your B2B commerce platform will allow information to be shared automatically, eliminating systems working in silo as well as optimising the customer experience. For example, providing real-time information on manufacturing, shipping and delivery times, as well as product availability, enabling the customer to plan and order accordingly.
Site search
Simple, but so effective. Site search is an often undervalued perk of e-commerce platforms. Not only does it boost user experience, it also helps to gather important data as it allows you to see the process visitors take when finding a product or information.
Yes, site search isn’t a new feature and is an expectation rather than a nice to have. But, how it’s implemented and the results executed which has the power to deliver an outstanding user experience and set you apart from the competition.
DEPT® implemented Optimizely Find for Jotun to deliver intelligent search results across its B2B and B2C sites. It powers global search, the product finder, colour grids, related colours and products, and various listing pages resulting in an enhanced user experience.
Moving forward
UK manufacturers are lagging behind other markets due to a slow down of digital investment, but as we can clearly see, the opportunity is huge. B2B commerce is only accelerating and it’s not stopping anytime soon. It’s time to make it a top priority or risk being left behind.
It’s a constant cycle, with continuous improvements and innovation required for manufacturing companies to constantly exceed customers’ ever-changing expectations and deploy business strategies to gain competitive advantage. But for those willing to invest, the possibilities are endless.
In the meantime, get in touch to find out how we can help you elevate your B2B commerce function.
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Technology Consultant