The assembly line that is U.S. manufacturing has stopped entirely or slowed considerably because of the coronavirus. Manufacturing sales already were sputtering at the end of 2019 based on a wide range of challenges from trade wars to a global economic slowdown.
Last year, the total sales across all sectors of U.S. manufacturers were flat at about $6.02 trillion. In contrast, when the U.S. and global economies were still in growth mode, U.S. manufacturing sales grew by nearly 8% to $6.03 trillion in 2018, according to data and analysis in the 2020 B2B Manufacturing Report, a new research report from Digital Commerce 360 B2B.
U.S. manufacturers, a segment that includes about 248,599 companies of all sizes, based on figures from the U.S. Department of Commerce, were bracing for another and more pronounced slowdown in 2020. But then came the COVID-19 global pandemic, a devastating virus that in the course of a few weeks shuttered large parts of the U.S. economy, closed or slowed down multiple manufacturing sectors and wreaked havoc with the supply chains of numerous product makers.
In the process, COVID-19 also created a sea change of B2B ecommerce challenges—and opportunities—for U.S. manufacturers. Last year was another year of modest growth across all digital sales channels for product makers. U.S. total B2B electronic sales, including transactions through electronic data interchange, ecommerce sites, log-in portals, e-marketplaces, e-procurement and related channels such as web-based private networks, grew about 1.4% to about $3.55 trillion. Total electronic sales for manufacturers were dominated by EDI, a segment that grew by to $2.13 trillion and accounted for 60% of digital sales and 35.3% of all U.S. manufacturing sales.
But if total sales and EDI posted only modest to flat growth, the numbers tell a different story entirely for B2B ecommerce. Last year, U.S. manufacturer digital sales that took place on ecommerce sites, log-in portals and marketplaces grew at a record pace. In 2019, U.S. manufacturer B2B ecommerce sales grew by nearly 21% to $430.0 billion. That growth rate is nearly 20 times faster than the growth in total U.S. manufacturing sales.
Investing in B2B ecommerce is becoming a bigger priority for manufacturers of all sizes, particularly as they look at the change in business buyer habits brought about by the ongoing impact of the coronavirus, says Lori McDonald, CEO of Milwaukee-based ecommerce services and website design and development firm Brilliance Business Solutions.
“Digital commerce can be challenging to invest in when your organization lacks experience working with it because hiring an internal team of digital commerce experts is expensive and difficult to create from scratch,” McDonald says. “Organizations are overcoming this by partnering with outside vendors that have teams experienced in B2B digital commerce and creating cross-functional teams internally to work through the cultural shifts.”
The 2020 B2B Manufacturing Report gives all the players a chance to read the scorecard and get into the game in a bigger way—or get left behind.
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