Distributors are experiencing tremendous impacts from the digital transformation of B2B commerce, from within and outside the organization. These impacts have caused waves of disruption that continue to accelerate, rather than subside. Mid-size distributors in particular face an enormous set of challenges as they face competition from conglomerate distributors on one side, and Amazon on the other.
And yet many distributors are not only surviving, they’re thriving in this new competitive landscape. What differentiates success from failure right now is not just the ability of an organization to understand how each disruptor will affect their business. Companies succeed when they’re able to incorporate a disruptor into their current commerce strategy, and use it to their advantage.
Five primary disruptors have emerged that distributors simply cannot ignore. From an increasing demand for pricing transparency, to customer experience expectations, the following areas within B2B e-commerce can create a massive competitive edge when handled effectively.
1—Pricing Complexity. Some experts say we’re currently facing a pricing war within distribution, while others argue it’s a “value” war. Actually, both of these statements are true, but let’s start by talking about pricing. B2B researchers and buyers prefer to complete low-value tasks online, in a self-service fashion. We also know that transparent pricing offered outside the portal can lure potential buyers looking for the best deal on commodity products.
Customer quotes for complex buys still need to occur within the confines of the e-commerce system. But distributors who can reduce their reliance on complex manual quoting by incorporating price transparency into their strategy will experience a double win. They’ll drive new customer interest, and at the same time reduce the cost of sales. When distribution companies don’t have to allocate people resources to manage complex pricing, they reduce the cost to serve their customers. Distribution companies are very focused on margins and when sales people are less involved in pricing, the margins are usually higher.
2—The Customer Experience. Pricing is not the only way that customer expectations are changing as the B2B commerce cycle moves online, and this is where the “value” war comes into play. A well-known 2016 study from customer experience consulting firm Walker Information Inc. reported that by the next decade customer experience will overtake price and product as the primary differentiator.
For distributors (and the rest of the B2B industry as well) this does not mean that delivering a superior online buying experience alone will win the day. It means the organizations that create customer experiences that adapt to the needs of business buyers—including when those needs require the full-service attention of a sales or service rep—will be the organizations that succeed.
The key to understanding the disruption of the B2B customer experience is that it’s not as much about dynamic personalization, as it is in B2C e-commerce. It’s about the ability of each person involved within commerce to do their job more efficiently as a result of the new digital capability.
For example, there are many people involved in the buying cycle in B2B, but for sales representatives it’s vital that they can access current order histories and other information via some kind of mobile device. They need to see current pricing that may be unique to a particular customer and products that that customer often purchases or approves for purchase. Sales reps also need to check the availability of items in real time, or even order samples during the meetings. Obviously, the ability to access real-time information anywhere at any time maximizes efficiency for both the representative and the customer.
3—The Mobile Experience. Right now we’re seeing a lot of distributors with responsive websites that do not satisfy all the mobile needs of the customer or the personnel supporting them. It’s too bad, because mobile represents a huge opportunity for differentiation. It’s also an area within commerce where a strong mobile experience in the form of a fully functional native app can compete with Amazon on the logistics side, and with mega-markets on the experience side.
Mobile also has the potential to transform the manner in which people work in the field, from the field service technician finding a part simply by taking a picture, to the sales representative troubleshooting a customer problem. The good news here is that fully functional mobile apps are no longer an expensive pursuit, thanks to the availability of configurable apps embedded within the top e-commerce solutions.
4—Post-Purchase Activity. Both mobile and desktop applications need to be focused on what happens after the purchase, so both value and revenue can help achieve objectives of the e-commerce system. The last phase of the buying cycle is also where many opportunities (and customers) are often lost as buyers drop out of an unsatisfactory digital experience.
Focusing on improving the experience after the buy is completed can improve efficiency, build brand loyalty, and even grow share of wallet. For example, understanding how to incorporate features like 2-hour or same-day delivery, logistics updates, and other sophisticated fulfillment capabilities can help widen a competitive advantage. Incorporating personalized promotions and digitally-prompted events like re-orders can grow revenue without increasing the cost of sales. And a smooth, reliable buying experience from start to finish can build digital trust quickly, supporting the traditional customer-brand relationships and in some cases, replacing them.
5—The Role of Sales. I’ve mentioned the importance of paying attention to the complex roles within B2B commerce, but one stands out in terms of the overall change that’s occurring. Although it’s clear that we’ll never see the “death of the B2B salesperson” as previously predicted, we are seeing a massive transformation in terms of the requirements for that role. Digital commerce done well removes low-value tasks from the plate of the sales rep.
Instead, salespeople need to step up to new responsibilities that are highly consultative. Armed with the right information, the sales rep can now be seen as the “manager” of the customer journey, only stepping in when it makes sense to do so from both a cost and efficiency standpoint. Examples might be to solve a customer problem, or to handle a more complex purchase.
Understanding the evolving role of the sales rep is not just a disruption, it’s a critical success factor. Distributors who don’t spend time training their salesforces to succeed in this new paradigm (and dealing with those that can’t make the transition) will find themselves losing in both the price and the value wars.
The impact of each of these disruptors on any individual distributor will vary based on the maturity of their industry, and how far along they are with digital transformation. But no matter the business, and regardless of the company’s commerce evolution, paying attention to these disruptors is critical to building a long lasting B2B commerce strategy.
Karie Daudt is the vice president of Customer Experience and Marketing for Insite Software. Her last article in B2BecNews, “The big 5 disruptors for manufacturers in e-commerce in 2018,” addressed how manufacturers can turn market disruptors to their advantage. Connect with Karie on LinkedIn and follow her on Twitter for more insights on B2B e-commerce.