Just as the internet enabled high-speed commerce, manufacturers and distributors face growing competitive pressure to make quick decisions on how they sell to their end customers. That means these companies need to develop new digital services to reach their increasingly adept e-commerce customers, Forrester Research Inc. says in new report written by Andy Hoar, vice president and principal analyst for B2B e-commerce, along with other Forrester analysts.
As customers increasingly use digital technology to source products, channel partners need to adjust their own online process accordingly, “or they risk getting left behind,” Hoar writes in the report titled “Realign B2B Channels for a Post-Disruption World,” which was released last week.
For example, W.W. Grainger Inc., No. 35 in the B2B E-Commerce 300, has enhanced its online marketplace with resources like SupplyLink, a guide that includes best-practice case studies and online product training materials, Hoar notes. And Amazon Web Services created an online “ecosystem” of independent software vendors in its AWS Marketplace. Amazon Business, Amazon.com Inc.’s business-to-business operation, is No. 104 in the B2B E-Commerce 300.
Manufacturers and distributors have built core assets over the years, Hoar notes, including close relationships with customers, breadth and depth of product assortment and expertise, inventory management and supply chain integration, and financing. “The key for channel partners is to leverage those assets in the form of new digital services for customers,” the report says. Specifically, it says channel partners must:
- Use digital customer experiences to differentiate. Manufacturers and distributors must ensure they become destination sites, otherwise, they’ll become commoditized fulfillment options.
- Expand and diversify their added value. Because customers show a growing predilection to buying from manufacturers and marketplaces, distributors need to focus on fulfillment (inventory and logistics management), warranties, services, support, and financing, which represent higher-margin revenue opportunities.
- Expose back-office supply chain integration with suppliers to customers. Distributors should provide digital applications for customers to check partners’ inventory levels, order lead times and manufacturers’ ship dates.
- Invest in private-label products to capture brand profits. Distributors are already skilled at connecting products with customers, they also must become capable creators offering their own branded products in addition to those they represent for manufacturers.
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