Following a yearslong stretch of supply chain and market disruption, distributors are sharpening their digital commerce growth strategies, adapting to new ecommerce demands in the manufacturing and distributing world. In doing so, they’re working to provide more value and a better customer experience choosy and careful buyers.
That’s one of the chief digital takeaways from news and analysis in the newly published 2024 Ecommerce in Manufacturing and Distribution Report from Digital Commerce 360.
With once-severely disrupted markets back closer to normal, suppliers are back to providing reliable product flows. They are also allowing buyers to be selective regarding products and pricing. For the distributors in the middle, the return to normal often means a digital commerce upgrade to capture and retain loyal customers.
Importance of ecommerce for distributors
“Customers have access to plenty of inventory, whereas a couple of years ago they did not, and it seems they’re now focusing on price probably more than they ever have,” says Barry Litwin, CEO of Global Industrial Co, which does more than half of its more $1 billion in annual sales transactions through digital commerce.
He adds that buyers’ demand for value pricing coincides with their expectation of a helpful online and omnichannel purchasing experience.
“Companies need to be focused on price management, price intelligence, and, if you’re like us, you’ve got to make sure that your online pricing is competitive in the market,” he says, adding, “Making sure your website is easy to buy from is going to be key.”
Global Industrial finished off last year with a 22.9% year-over-year surge in fourth-quarter sales. That total reached $320.1 million. That was driven by “ecommerce and broader digital sales,” chief financial officer Tex Clark said on an earnings call. The milestone brought full-year 2023 total sales up 9.3% to $1.27 billion.
Ecommerce’s growing role
Litwin said in an interview that ecommerce continues to increase as a percentage of total sales transactions. As it does, the company is taking several steps to maintain digital growth.
“We’re going to continue to leverage growth in our ecommerce platform,” he said, adding, “We continue to invest pretty significantly in the site navigation and online product experience.”
That means “looking at all the website data, where conversions are occurring, where customers are entering and landing on your site, and making sure we’ve got good controls in place to be able to make adjustments to optimize the customer experience,” he explained.
In addition, the distributor is expanding its product lines, including new products available online in its floor-care line of Caterpillar, Global Industrial and other brands of ride-on floor scrubbers priced from about $6,400 to over $50,000.
Other distributors of all sizes across various industries are also expanding their ecommerce and overall digital operations.
Check out the 2024 Ecommerce in Manufacturing and Distribution Report for more data and analysis on the impact AI is having on all aspects of digital B2B commerce and transformation.
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