At the kick-off of the annual B2B Online conference today, Forrester Research analyst Andy Hoar said manufacturers and distributors should think of digital commerce as core to their operations rather than an addition to their business.
“I’m done talking about ‘e-commerce’ as an adjunct to business—it’s not,” Hoar said in a keynote address, in front of a slide that referred to the evolution of “B2B Commerce.”
Another slide Hoar presented displayed an image of a butterfly. “A caterpillar has to become a butterfly,” he said to an audience of several hundred, adding: “You don’t have the option to stay an analog company.”
Hoar referred to statistics uncovered in research conducted with B2BecNews and Internet Retailer over the past two years. He noted that in 2015 the annual study of online business buyers found that 53% said the product information they find online through self-service research is superior to the information they typically get from sales reps. In 2017, that percentage increased to 68%.
In addition, he noted that online B2B buyers said they preferred to buy products directly from a brand manufacturer rather than from a distributor—and that 20% said they would be willing to pay more for the same product from the manufacturer. “Why?” Hoar asked. He said it’s because manufacturers often benefit from a “halo” effect tied to their direct connection with their products.
But few brand manufacturers are prepared to take advantage of such buyer preferences with websites designed with content and shopping features to help buyers quickly find and purchase what they need, Hoar said. He advised companies to learn how their targeted customers research and buy online, and figure how to develop ways to make their buying process more convenient. “Convenience tends to win,” he said.
He also advised manufacturers to envision where their brands fit within the buying patterns of their customers and prospects. A manufacturer that sells its products through online distributors, for example, are reaching traditional buyers of their products who are shifting their purchasing online from offline channels. By selling through Amazon Business, the B2B arm of Amazon.com, manufacturers are more likely to reach new customers who are Amazon loyalists.
Key to growth for both manufacturers and distributors, Hoar said, is in learning how their targeted customers want to shop and offer them a more valuable online buying experience. Manufacturers, distributors and wholesalers also need to figure out how they can work together to make their selling channels more effective at driving sales and profits, he added.
Hoar gave as an example the auto parts industry, where manufacturers sell to large auto parts retailers that sell to repair shops and corporate fleets as well as direct to consumers. Amazon Business is beginning to enter the auto parts market with supply contracts signed earlier this year with manufacturers, who welcomed Amazon Business “with open arms” in expectation of getting a more profitable arrangements than they’ve had with major auto parts retail chains, Hoar said.
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