Opportunities and Pitfalls in Manufacturing eCommerce

 
 

In the wake of COVID-19, manufacturers are flocking to B2B eCommerce.

But not all strategies (or solutions) are created equal. Here’s what you need to know.

Manufacturing eCommerce | Complete Playbook | Corevist, Inc.

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Manufacturers are discovering the power of eCommerce.

Before COVID, manufacturers were already feeling pressure to get into eCommerce.

Then the pandemic landed.

Now the digital squeeze is hitting manufacturers in all verticals like never before. Supply chain disruption and unpredictable shifts in demand have exposed weaknesses that many manufacturers didn’t know they had.

Wherever manufacturers need to reach customers with less friction, they’re turning to B2B eCommerce.

But not all eCommerce strategies (or solutions) are created equal. In fact, manufacturers face several common pitfalls when they enter the eCommerce game.

In this article, we’ll examine those pitfalls—then discuss the exciting opportunities for manufacturers to interact with customers online.

Let’s dive in (click to jump).

Pitfall 1: Choosing a non-integrated B2B eCommerce solution

DigitalCommerce360 uncovered fascinating data in their 2021 report on eCommerce in manufacturing. According to survey respondents, integration is the #1 challenge that manufacturers face in B2B eCommerce.

This is no small problem. For many manufacturers, ERP data and business rules are essential to each transaction, defining things like personalized pricing, customer-specific inventory availability, and SKU permissions.

According to Forrester, B2B eCommerce platform providers should include prebuilt integration, baking it into their products, rather than leaving it to third parties:

“As monolithic technology becomes outdated and less effective, the providers that lead the pack demonstrate deep, prebuilt integrations and strong business user tooling.” (Most recent Wave Report for B2B Commerce)

In other words, integration should never be an afterthought. Platform providers should build it into their architecture from the very beginning.

(Hint: This is how we built Corevist Commerce.)

Unfortunately, manufacturers are finding that conventional B2B eCommerce solutions don’t follow this advice. Because these platforms were built to provide standalone B2C solutions, ERP integration will always be a bolt-on addition requiring third-party middleware.

Here’s the problem: Third-party middleware, plus eCommerce, plus ERP creates a scenario in which you have to update and maintain data and business rules in three places. That means you’ll need three separate teams (middleware, ERP, and eCommerce) to keep your architecture working.

eCommerce Pitfalls for Manufacturers: Complex architecture creates too many liabilities across teams | Corevist, Inc.

This creates all kinds of opportunities for technical debt. If you need to change the custom logic that governs a customer’s pricing rules, you’ll have to update that logic not only in the ERP, but also in the middleware solution and the eCommerce solution.

In this architecture, it’s difficult to keep B2B eCommerce working hand-in-glove with the ERP over the long term. At scale, this architecture can turn into a nightmare for overworked IT departments.

The alternative: B2B eCommerce that includes prebuilt ERP integration

If ERP data and logic are essential to your transactions, it stands to reason that your B2B eCommerce experience should reflect that data and logic wherever it’s relevant. That’s why Corevist Commerce includes prebuilt, configurable integration to SAP ERP that covers the entire customer journey.

Want to see B2B eCommerce integrated to SAP?

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Pitfall 2: Leaving out the voice of your customer in the project

Who is B2B eCommerce for?

Ultimately, it’s for your customers. For many manufacturers, that means starting with your existing dealers, distributors and channel partners as your target market for B2B eCommerce.

If you’re starting with these segments, it makes sense to give them a voice in defining how B2B eCommerce works at your organization. After all, they know what it’s like to do business with you—which means they’ve got some ideas on how you can improve.

(Note: This thinking is the cornerstone of the Corevist implementation methodology. We involve your real customers in the process, taking feedback and collaborating with you to define your ideal solution. Our methodology works—it’s delivering $2B+ in B2B eCommerce revenue for manufacturers around the globe. But we digress! 😊 )

Of course, involving customers in this process can be uncomfortable. Depending on your organizational culture (and customer attitudes), it can even be downright terrifying!

However, in 13+ years of helping manufacturers thrive with B2B eCommerce, we’ve found that the voice of the customer is absolutely essential to success. Because your customers come from outside your organization, they have a unique clarity of perspective. They know what matters to them, and they know what value you provide. (They also know everything that’s annoying about doing business with you, and they can help you fix that.)

If you engage a seasoned B2B eCommerce partner to guide you in this journey, you don’t have to have everything figured out. A partner with an intelligent methodology can flush out critical pieces of the puzzle that you haven’t considered—things your customers wish you knew. With the voice of the customer included, you can make the decisions that matter most for B2B eCommerce.

Pitfall 3: Starting with D2C (direct to consumer) when there’s lower-hanging fruit

Some B2B eCommerce providers talk about manufacturer eCommerce as if there’s only one segment to reach—the end consumer of your products. This focus reveals how little they know about manufacturers’ needs.

While D2C eCommerce (direct-to-consumer) may represent an opportunity for some manufacturers, particularly those with consumer products, this model comes with unique challenges that require careful planning.

  • Channel conflict. In a D2C model, the manufacturer essentially acts as their own distributor. This can jeopardize existing distribution relationships. If those relationships are essential to your ongoing GTM (go-to-market) strategy, you need to handle this carefully. Here’s one way to do this: offer a unique product line in your D2C channel that isn’t available elsewhere.
  • Fulfillment and operations. Whether it’s ERP configuration, warehouse operations, or both, many manufacturers aren’t set up to sell product in quantities of “1.” D2C will require not only a mindset shift, but a whole new set of capabilities in fulfillment—or the resources to partner with a 3PL (3rd party logistics provider) to fulfill low-quantity orders.
  • Payment methods. Consumers aren’t going to place orders on invoice. They expect to pay for their order at checkout via credit/debit card (and other modern payment methods). Your finance organization may require some retooling to handle this kind of transaction, and your eCommerce solution will need integrated, self-service electronic payment capabilities.

Of course, these challenges aren’t insurmountable. For manufacturers with a mature B2B eCommerce program, D2C often makes sense as a next step.

However, for some manufacturers, D2C may not be a good candidate for a first B2B eCommerce initiative. Some organizations will find greater success by rolling out to a lower-risk segment first to learn the ropes of B2B eCommerce.

Rather than tackling D2C, many manufacturers choose to start their eCommerce journey with low-hanging fruit: their existing dealers, distributors, and channel partners. These are the B2B buyers who already have established relationships with you. When given an ERP-integrated solution like Corevist Commerce, these customers offer the greatest opportunity for a quick B2B eCommerce win (and future incremental improvement). Because you’ve already acquired them as customers, the eCommerce investment comes at a much lower risk than it does in a brand-new D2C scenario.

Opportunity 1: Leveraging Your ERP Investment for B2B eCommerce

Consider these two statements. Are they true of your organization?

  • Your transactions are governed by complex business rules. There is no such thing as a “generic transaction” like in a B2C scenario—every interaction with your customers is heavily personalized by account-specific data and business logic.
  • Those business rules live in your ERP, and you’ve invested hundreds of thousands of dollars to define and maintain them in that system.

What if you could leverage all that expensive logic for B2B eCommerce without rebuilding it?

Many manufacturers depend on their ERP for smooth interaction with customers. Every dealer, distributor, or channel partner has unique ERP logic associated with their account. This personalized business logic governs every aspect of every transaction—including things like:

  • Personalized pricing (not just by SKU, but also scaled and bundled pricing rules)
  • Personalized inventory availability (called ATP, available-to-promise, in SAP)
  • Personalized picklists (products which the customer is allowed to buy)
  • Real-time credit status (customers need to know if the order will go on credit block)

For manufacturers researching B2B eCommerce, the importance of the ERP can’t be overlooked. One way or another, every customer action, every order, and every product must answer to the ERP. It’s the sole system of truth for your entire business as a manufacturer.

If you could launch B2B eCommerce that automatically reflects your ERP system in real time, why wouldn’t you?

This is the thinking behind Corevist Commerce.

See the power of SAP integration.

Corevist Commerce automatically honors your SAP data and logic in real time.

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Opportunity 2: Starting with your existing B2B customers

Many B2B eCommerce providers offer grand visions for manufacturers. Capture new market share! Go direct to consumer! Reach new segments!

While these targets make sense for experienced organizations, a smart plan for your first B2B eCommerce program should start closer to home. Most likely, your organization already has at least one committed customer segment—if not several—who offer prime low-hanging fruit for your first foray into B2B eCommerce.

(Here, again, the B2B eCommerce landscape for manufacturers is so different from what we find in B2C. Vendors who primarily cater to the B2C market focus on attracting and keeping customers, whereas manufacturers already have defined relationships with customers—often governed by contracts. The scenarios are entirely different, and manufacturers need B2B eCommerce providers with deep experience in “true B2B” scenarios.)

So who’s your ideal customer for your first B2B eCommerce rollout? Look for segments with these characteristics.

  • Contractually bound (or at least consistent buyers). If you launch B2B eCommerce for customers who’ve already committed to a relationship, you can focus on incremental improvement (increasing average order size, increasing self-service lookups while decreasing phone inquiries) rather than trying to lasso new buyers through B2B eCommerce. ROI from this first phase can fund the next phase when you do go after new market share.
  • Don’t need sophisticated merchandizing. Not every customer wants to browse products. Some customers already know what they need and just want to order it fast. These customers are great candidates for your first B2B eCommerce rollout—particularly if you use an ERP-integrated solution that supports personalized catalogs/picklists, saved carts, and easy reordering. These customers will get immediate value from B2B eCommerce, and as they order more and more through self-service (rather than phone, fax, and email), they’ll help you reduce your cost to serve. You can take these cost savings and use them to fund your next iteration of improvement.

Opportunity 3: Starting with a customer portal, THEN scaling up to B2B eCommerce

When manufacturers look at their B2B eCommerce options, things can get overwhelming. Most vendors pitch glossy storefronts, powerful merchandizing capabilities, and email marketing integrations.

There’s a time and place for all of these things—but many manufacturers struggle to envision this future state when they’re still taking orders (and routine customer inquiries) via phone, fax, and email.

In other words, the market is pushing Cadillacs, but manufacturers should start with daily drivers. Before manufacturers try to launch tricked-out B2B eCommerce experiences, they need to see real value coming through the web channel. That means value from existing customers who’ve adopted B2B eCommerce and stopped ordering via phone/fax/email.

The key here is to find a B2B eCommerce provider who offers iterative roadmaps and scalable products to support them. (Hint: This is the Corevist way.)

Rather than launching a gigantic, groundbreaking B2B eCommerce program all at once, imagine a roadmap like this:

  1. Start with a B2B customer portal. A solution like this empowers your customers to look up orders, shipments and invoices through self-service. With routine inquiries greatly reduced, you can transition your customer service staff to higher-value activities like inside sales. The cost savings of this initiative can fund the next stage in your roadmap.
  2. Add B2B eCommerce functionality to your portal. Once you’ve got customers checking orders and invoices through self-service, you’re in a great place to add online ordering. Customers have already adopted the portal, and they understand the value, which makes it much easier to transition them to web ordering. (Note: This kind of iterative rollout is only possible with a scalable solution like Corevist, which allows you launch a B2B portal first, then add eCommerce functionality within the same SAP integration architecture without reinventing the wheel.)
  3. Roll out B2B eCommerce to additional customer segments. Once you’ve achieved success with one customer segment, sales area, or geography, you can take those learnings and apply them iteratively. If your B2B eCommerce solution includes scalable, templatized SAP integration architecture (as Corevist does), you can reuse your architecture investment to bring these additional segments online without duplicate investment.

The takeaway: Identify your low-hanging fruit

If we could say only one thing about manufacturer eCommerce, it would be this: start with a quick win, then use that ROI to fund expansion.

The technology you choose should support this strategy. It shouldn’t require vast custom integration or duplicate investment—rather, it should leverage your existing ERP investment directly, in real time.

Start there, with a customer segment that’s hungry for eCommerce, and the sky’s the limit on what you can do.

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