There are so many different ways to reach your customer nowadays—whether it be by brick-and-mortar stores, websites, mobile apps, social media, catalogs—the list is ever-growing. All sources seem to say that e-commerce is experiencing double-digit growth without any indication of slowing. What also is changing is the face of the retailer, the consumer and distribution. No longer is e-commerce relegated to business-to-consumer (B2C) sales; business-to-business (B2B) retail is gaining popularity as well, including both manufacturers and warehouse distributors.
According to Ranga Bodla, director of industry marketing for manufacturing and wholesale distribution at NetSuite, “As high as 85 percent of distributors are looking at revamping their website for e-commerce. I think the most important thing for preparing for e-commerce growth is you can’t put your head in the sand. You have to make sure that you’re focused and paying attention, because whether or not you change your business to adapt to e-commerce, the industry is changing.”
Your Customer Base Is Evolving
Even if you’re not 100 percent prepared to take on the challenge of e-commerce now, it is important to have a plan, so you can eventually meet the demand of expectant online consumers. While there are plenty of customers willing to pick up a phone and loyally rely on their already established supplier relationships, there is a small yet increasing amount of customers who are more comfortable online. If you’re not there, you could miss myriad opportunities.
“It’s not to say that you have to suddenly stop everything you’re doing and suddenly put all your efforts into e-commerce, but what you do have to do is have a road map for how you’re going to attack e-commerce, and best make it a part of your overall strategy and competitive advantage because it’s not going to fall in your lap. It’s going to bypass you,” Bodla comments. “We did a Webinar with an organization called Unleash and it was specifically geared toward competing with the big dogs—how to prepare for Amazon and Google to come into the distribution market.”
On the Webinar was one of NetSuite’s customers, Monterey Lighting, which recently entered the e-commerce market. Bodla says the company doesn’t know when e-commerce is going to burst onto the distributor scene, but it wanted to be ready because when it happens, it’s going to happen rapidly. As Bodla aptly put it, “It’s almost like when a stock market rally happens—80 percent of the gains happen in the first part. You want to be ahead of it, not behind it.”
Moreover, Bodla believes that there are two schools of thought in regard to Amazon and Google entering the distributor e-commerce marketplace: “They’re going to be a freight train that is going to transform this industry, and we need to be prepared for how we’re going to effectively remain ahead and use our knowledge as a competitive differentiator.” Then there are those who say Amazon and Google can never provide the kind of information manufacturers and distributors can, so they’re not a threat.
With all that being said, if customers want to buy a product when a supplier is unavailable, whether because it doesn’t have a solid online presence or it’s closed for the weekend, they’re not going to wait for you to present yourself unless you offer something more than those suppliers who are available everywhere and at any time. That means you must provide the utmost in customer service, product availability, market knowledge, aftermarket service, etc. that actually makes the wait worth their while.
Rick Chavie, vice president of omni-commerce, hybris software, warns, “Consumerization of B2B is a hot topic in 2013 as companies struggle to move from traditional sales representative/catalog interactions to convergence with digital commerce.”
The first thing to grasp about e-commerce retail is that customers do not think in terms of channels. They care about overall customer experience, and that product is available in various ways that are easy to navigate and access. Retailers must improve the commerce experience, according to Chavie, no matter the channel and make it consistent: “Companies need to embrace the seamless mindset across digital and physical commerce in their communications (brand consistency across email, website, direct mail, TV, catalogs, etc.); the ability for customers to buy and return anywhere using their own device; offering a single view of customer, product orders and inventory; and interactive engagement with customers.”
He also suggests retailers should: “Recognize that mobile is both a commerce extension, as well as its own channel, and support both roles. As a commerce extension, mobile needs to support all phases of the customer journey. A complex website that is simply degraded to support mobile is less effective than designing your commerce experience around a user-friendly mobile asset that is leveraged broadly.”
The Back End
Many retailers forget about the back end once they amp up their online and mobile shopping functionalities. Once you have your user interface and channels seamlessly working together, however, you need to integrate the horsepower to back it up because now that you’re meeting your customers’ expectations on the retail side, you better deliver. According to a Voxware survey of consumers, “Nearly 30 percent of respondents would abandon shopping with a retailer altogether if they receive an incorrect order just one time, while 62 percent are much less or less likely to shop with a retailer for future purchases if an item they purchase online is not delivered within two days of the date promised,” explains Keith Phillips, president and chief executive officer of Voxware.
If you have a brick-and-mortar-only retail model, in which distribution basically caters to order fulfillment, you may need to update to keep up. Phillips details, “The vast majority of inefficiencies and errors occur in the distribution center at the moment of order selection, or when an item is picked from within the warehouse to be shipped to the consumer.”
He continues, “Most organizations still use paper to pick orders in the warehouse, requiring workers to hold a document at all times, and move their heads as they read and look for items. Not only is this tedious, but also inefficient and can even be dangerous. Unlike other solutions, voice technology allows retail warehouse workers to remain hands-free. In addition to creating a safer working environment, a hands-free voice solution allows workers to move more quickly and process more orders.”
Voice not only increases accuracy, but can also reduce the need for auditing every order to auditing a sample. Besides cost savings, you can save yourself some customers because what they want is their product on time—no matter the channel—and that means a repeat customer if you fulfill that expectation.
In conclusion, Chavie says, “In five years, industry leaders will embrace a ‘commerce’ view and ‘e-commerce’ will be absorbed into all areas of the business. Customers will routinely start in your digital channel, switch to your physical channel and return to a digital channel. Channel breakouts will be less important as channels blur. Customers will continue to have a wealth of online comparison options, so you must be competitively priced, but also offer services and a great experience to retain your customers.
“Mobile crosses back and forth from personal to business use, and customers are using the same mobile device at home, the office and selling locations. Your tablet or smartphone apps must compete with the best user interface experiences that will set the standard among tens of thousands of apps that will rise to the top.”