Ecommerce for manufacturers: Best practices, strategies, and trends
Manufacturers are starting to embrace business-boosting trends, like B2B ecommerce.
For some, it happens when the sales demand is higher than the manpower they have to support it. For others, a rise in overhead costs and reduced margins are what turns the team’s attention to ecommerce. For others still, the turning point is when customer demands become impossible to ignore.
Even omnichannel selling, a trend right out of the B2C playbook, is becoming top of mind for businesses. New data shows that all B2B customers prefer omnichannel, no matter their industry, country, size, or customer relationship stage. So whether you sell exclusively through distribution and retailers, direct, or through a marketplace, adding to that mix an online channel not only helps you meet increasing digital expectations, but it allows you to provide a balance across many channels.
According to McKinsey, 72% of B2B companies that sell via seven or more channels grew their market share.
As it becomes clearer and clearer how ecommerce can actually enhance, not disrupt your channel strategy, the time to act is now. U.S. B2B ecommerce sales are expected to grow at a CAGR of 10.7% over the next five years, and the businesses that invest today will get ahead.
According to Twilio, companies that invested in digital customer engagement have seen revenue growth of 70% on average. But before diving into an B2B ecommerce project, manufacturers should already be considering how to get the most out of it.
As a B2B ecommerce payments platform, we go to our partner network to deliver the actionable insights manufacturing companies need to hit the ground running. Because in order to start with payments, you need to start with ecommerce.
We sat down with Randy Higgins, Chief Strategy Officer at Shift7, to provide manufacturers with a practical framework to successfully launching an online sales channel and bolstering revenue as a result.
The state of ecommerce for the manufacturing industry
Before we jump into a go-to-market path for ecommerce, it’s important to first understand the current state of the industry. According to Statista, 20% of professionals implementing digital commerce initiatives worked in the manufacturing industry. That number outranked industries like retail (8%) or wholesale (5%). And there’s plenty of success there.
In 2021, Digital Commerce 360 reported that manufacturers grew online sales by 18.4% to $543.25 billion. These growth rates are 1.45 times greater than the growth in all manufacturing sales.
Within reason, 66% of U.S. manufacturers agree that implementing digital sales and marketing over the next two years is a “high” or “very high” priority. Among buyers, digital commerce is already the preferred way to complete a purchase, with 86% preferring online ordering over speaking to a sales representative.
They are also willing to pay more. The share of B2B buyers who would pay more for better ecommerce experience increased from 74% in 2019 to 87% in 2021.
The bottom line is that the manufacturing industry is clearly in a strong position to take advantage of digital adoption to accelerate growth. Buyers want the perks of online commerce and manufacturers can give it to them if they have a solid plan in getting there.
Start with a clear ecommerce ROI
It takes more than data alone on the market and opportunity to convince organizations to invest in B2B ecommerce. After all, it’s a project of tremendous scale, complexity, and cost. It's difficult to get the organization to rally around the idea of a digital channel. Especially when companies operate on some fairly thin margins.
This is why Randy explains that they build an ROI case from the beginning. “When we build the plan for an ecommerce project”, Randy says, “most of our initiatives are going up at least to the C-suite, if not to the board for approval.”
Shift7 typically builds the ROI model around things like:
- Share of wallet gain: Cross-selling with smart merchandising and marketing automation
- Higher order values and velocity reorder cycles
- Cost per order: Comparing channel costs vs order volume
- Productivity metrics: Sales teams & service resources moving towards higher value tasks
- Adoption rate: Percentage of the customer segment shifting to self-service
With strong metrics as a north star, organizations can be better aligned with their digital initiatives. Plus, when you have a specific timeframe and goals, it’s a lot easier to optimize along the way. Once an ROI is in place, Shift7 also dedicates a lot of time to upfront customer research that produces personas and journeys.
“We want to understand where the friction is between the manufacturer and their customer.”
Randy describes that even though many manufacturers are interacting with their customers and are familiar with some of the pain points, it’s important to hear directly from customers, rather than internal stakeholders alone. “I would say most of our clients do not have a very clear picture of what their customer journey looks like. So we're usually doing primary customer research for them.”
The next step is to take this research and use it to create an optimized customer-centric experience.
Choose an ecommerce platform that will enhance self-service capabilities
Now that manufacturers know what their customers need and what they are trying to achieve, it's time to build out the right functionality and features. This is where the vision meets the technical investment. As an example, one of the main steps here is ecommerce platform choice.
“There's usually already some technology investment within the organization”, explains Randy. For example, around ERP, CRM, they probably have a website, so, Shift7 looks to recommend things that will naturally fit or extend that ecosystem. Since manufacturers typically are not exclusive to one sales channel, an ecommerce platform that connects customer data, all in one place, is very important.
Why? Sales and customer service teams can provide a better service if they can easily view and manage the customer experience across all touchpoints.
Break down your experience from a customer journey perspective
With all of the research and logistical steps out of the way, manufacturers can get to the fun part: rolling out the digital experience. Randy recommends treating this step like a product that is evolving over time.
Some helpful points Shift7 asks manufacturers are:
- How am I continuing to groom and refine customer and user stories?
- How do I continue to enhance demand generation for the experience?
- How can I create self-service touch points across the customer journey?
If you think think about a typical product management life cycle, it’s about building something and then make sure people are actually using it. In B2B ecommerce, the experience is only as good as how easy it is for customers to order online and find what they’re looking for, in a short amount of time.
Can they find personalized product recommendations? Do they have flexible payment options? Can they view their order history? Do they have the right pricing? And do they have shipping options that actually work for them?
There's a lot of nuances. Manufacturing is a vertical that has very specific ecommerce needs and granular requirements.
Everything from inventory availability to shipping and payment can have specific use cases that differ based on the customer. But when customers are able to do business with you more easily and benefit from an experience that boosts the relationship with your brand, there’s a lot to gain.
Ready to start working on your online store?
Selling online doesn’t have to be scary. Now more than ever, there are modern and purpose-built ecommerce solutions to help manufacturers move online and benefit from the fruits of it—whether that be higher profit margins, enhanced customer loyalty, or greater operational efficiency.
We know how hard change can be, but with partners that can help you build a practical roadmap forward, you can create the best possible digital experience out there. To learn how your manufacturing business can start addressing B2B ecommerce payment needs, reach out to our team.