Why manufacturers should shift to a B2B2C model to capitalise on the COVID effect on eCommerce

Opinions expressed in this article are those of the author.

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Rob Stummer, Asia Pacific CEO, SYSPRO
This article is by Rob Stummer, APAC CEO at SYSPRO.

The global pandemic is having significant implications for many industries that will last well into the decade. One of the ways people have approached this period of isolation and uncertainty is in huge changes to the way they buy goods. From bulk-buying to online shopping, people are changing what they are buying, when and how. Global online sales went up 71% year-over-year for the second quarter of 2020, according to data from Salesforce’s Shopping Index.

If recent experiences have taught manufacturers anything, it is that a spirit of resilience and the ability to adapt are keys to operating in the new world. Now more than ever, digital tools such as B2B eCommerce are playing an instrumental role in enabling manufacturers to sell their goods and services in the new smart normal.  latest report But how does the manufacturing sector sustain this new B2B procurement behaviour in a more profitable way?

Getting reverse logistics right

Whilst the increase in B2B online sales is amazing, the cost of eCommerce should not be underestimated. Apart from sales, marketing, picking, packing and delivery costs, returns can be a real financial and operational burden. They are not referred to as the billion-dollar problem for nothing and according to a report by KPMG, returning an item can cost up to twice as much as it does to deliver it. Getting the reverse logistics process right can be complex, challenging and costly.

The benefits of B2B2C eCommerce

Those manufacturers that have taken the plunge and launched their eCommerce shopfronts have had the chance to increase their sales through access to new markets, new segments and new customers in different locations nationally and internationally. They have also seen an increase in profits as dealer and distributor commissions have reduced or been eliminated altogether. They have also been able to defend and grow their market share directly with their end customers, rather than depending on their increasingly busy distributors to handle the outbound marketing.

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The benefit of the shift to B2B2C eCommerce to the end customer is a significantly improved customer experience that the brand is in 100% control of rather than trusting a third party. The customer is happy as they get the product potentially faster than they would usually and can even result in lower prices due to reducing the middleman’s role.

Digitally advanced manufacturers have been able to achieve more efficient and profitable operations by integrating their online stores with their Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) platforms. These link to their fulfillment systems, which can also incorporate bots and automated warehousing to reduce human contact and improve both the speed and accuracy of deliveries to customers.

Overcoming the complexities of B2B eCommerce

B2B sales tend to be quite a bit more complex than a typical B2C transaction. Often there is customer-specific pricing, whether based on a tiering system or specifically negotiated deals, and bulk pricing. There may be customers that do not have access to all products. Assigning customer catalogues to specific customer segments is a way to personalise the B2B customer shopping experience for end users.

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