Getting on Board with E-Commerce

Many manufacturers continue to resist, but a viable e-commerce platform could become vital to staying competitive now and after the pandemic.

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The world exists online now more than ever as humanity combats the COVID-19 pandemic. People are purchasing everything from groceries to pet supplies on e-commerce platforms. Consumers and businesses have been forced to adapt to this rapidly changing online landscape, and manufacturers have to be ready to do the same. 

The good news? Your customers are ready.

A 2019 report found that less than 6 percent of manufacturing sales came through e-commerce channels in 2018, which was only a modest increase from the year before. We know that the future is digital, and innovative companies have driven this change over the past few decades. 

Although many of the B2B experts I know stand firm in saying e-commerce will power the future, manufacturers have been slow to adopt this mindset. Why? The dealer networks and purchasing intranets are already in place, and those systems work — at least for now.

The shift to e-commerce is reminiscent of the early days of the telephone. In 1878, New Haven, Connecticut, became the site of the first commercial telephone exchange. While the telephone industry boomed in New Haven, plenty of people outside the area still weren’t on board. Eventually, telephones became universal. Communication by phone became the expectation. 

E-commerce will have a similar tipping point. Customers will demand to see the systems that are being used in every other industry. People won’t bother with old or outdated processes if they can instead go to a manufacturer that has a modern e-commerce system in place.  

Setting Up for Success 

To harness the power of enterprise-level e-commerce in your manufacturing business, look for these five components:

  1. Enterprise resource planning: Any company looking to transition fully to e-commerce solutions needs to have an ERP that integrates data from all of your most important departments - accounting, human resources, manufacturing and distribution. This should have a direct impact on sales because ERP data can suggest new pricing structures tailored to specific customers. Data from the ERP can also be used to influence future deals based on past interactions, payments, and product interest. Integration can be tricky, so pick the right platforms and the right team to make this happen.
  2. Data repository: The ability to store vast amounts of data is a key piece of the e-commerce puzzle. The problem is that too many manufacturers don’t have modernized methods for doing this. Many times, I’ve seen manufacturers store critical information in spreadsheets or text documents that can’t easily be translated as data. For manufacturers selling replacement parts, the data problem is compounded. An enterprise e-commerce system and data architecture that has data attributes can handle this information, so make sure that your systems and teams understand those complexities. The kind of repository you’ll need could be its own system or a new component of the ERP or e-commerce platform. For your e-commerce operations to thrive, you’ll need a place to save all sorts of detailed information about your products — parts, fits, images, marketing descriptions, and more. Traditional ERP systems often don’t store this information.
  3. E-commerce platform: Whether you develop a custom platform or adopt an existing e-commerce solution, you need a system that provides the shopping features your customers demand. Before you get lost in all the bells and whistles, remember that design and usability matter. An easy-to-use portal not only streamlines the process, but it also points to a well-run company behind the screen. Make sure your platform allows for customization, integration, on-site search (capable of tracking what people searched for and what matches were made), product attributes, and good reporting.
  4. Digital marketing system: Many e-commerce systems provide digital marketing features. That’s because these capabilities are an absolute necessity for serving both new and existing customers. But watch out for low-functioning add-ons that take away from your ability to maximize the platform’s potential. Leverage sophisticated features like AI-generated insights about customers’ browsing and shopping habits, automated email outreach templates and abandoned cart reminders. If your e-commerce system doesn’t include a digital marketing component, invest in a separate digital marketing system and sync it to your e-commerce platform to get those features in place.
  5. Reporting: Everything we’ve covered is pointless if you don’t look at the story your data is telling you. Reports from your platforms can tell you about real-time inventory levels, customer purchasing behavior, and sales by product, channel, and season. With this information, develop strategies to spur future growth. Does your e-commerce platform show that most of your sales come from repeat customers? If so, leverage your digital marketing capabilities to scout for new ones. Sales reports by country can alert you to new markets that are ready to take off, while your ERP will say whether you have the inventory to meet the new demand. Robust reporting capabilities help you identify and seize new product, sales, and market opportunities.

Manufacturers have been reluctant to adopt new ways of operating. If the old ways are working, why change? But manufacturers that wish to stay competitive can’t afford to wait to make e-commerce part of everything they do — especially considering the current economic climate.

 

Michael Bird is the CEO of Spindustry, a digital agency focused on eCommerce, SharePoint portals, and enterprise websites. 

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