Digital Transformation & Tomorrow’s E-Business Strategy For Manufacturers

Intelligence and automation not just for the product, but for the content and ordering, are becoming increasingly important. A wonderfully intelligent product that is difficult to order and learn about may lose buyer interest.

I sat down for an enlightening conversation about eCommerce and the changing channels of business with Brian Strojny, the Co-founder and Director of Insite Software.

Insite Software is the Minneapolis-based company behind InsiteCommerce, a B2B eCommerce platform for manufacturing, distribution, and retail, and InsiteShip, a multi-carrier shipping software that extends an ERP system’s shipping capabilities.

Strojny offered advice and addressed concerns about how manufacturers can become more competitive in the growing B2B eCommerce market. The emphasis was that times are changing. Buyers want easier, faster, and more automatic ways to buy, and manufacturers need to adopt. But how?

Strojny asserts that “it isn’t just about building more intelligent products. Buyers expect a level of intelligence in their consumer experience.” He used the apt example of a golf course superintendent:

If the superintendent orders irrigation for the course, he now expects that if the sprinkler head fails, perhaps the irrigation system has the intelligence to register that it has broken and can order a new head. Intelligence and automation not just for the product, but for the content and ordering as well, are becoming more and more important. If you have a wonderfully intelligent product but it is difficult to order and learn about, the buyer may lose interest.

The Alibaba model is also effective for holding a buyer’s interest. Essentially, Alibaba marries businesses to other businesses, or to customers. Buyers looking for products are interested in buying from distributors that they know are easy-to-use, secure, and efficient. Buyers may be more likely to hear about and purchase a manufacturer’s product if the manufacturer is partnered with a trusted distributor that meets the buyer’s preferences.

eCommerce is broadening to include more than just retail—Strojny mentioned that Alibaba’s is now selling the Tesla Model S. He cautioned that American manufacturers should not be threatened by this news, but rather, consider it the opening of a new channel for business.

Borrowing eCommerce strategies used by retail companies may stand to benefit manufacturers greatly. Buyers are always looking for easier, faster shopping. Manufacturing is behind retail in the eCommerce world, and interacting with the buyer online is a good step forward.

For example, if you are looking to buy a pair of shoes from a shoe store website, you can click on the shoe and see multiple views, read about the materials used to make the shoe, read a full description of the shoe’s merits, and read reviews from other buyers.

Some sites have begun exploring other methods for showing off the product., for example, now features short videos of the product “in action” and paired with other products from the company. You can now see your potential future shoes as a part of a complete outfit—in addition to making the shoes look better, this strategy also exposes the buyer to new products they may not have seen. Some sites have a team of employees available online to answer questions via chat. This kind of interaction with the product and with the company makes for a better user experience online.

Some manufacturers may want to sell directly, but Strojny advocates for the value that distributors can add. But buyers are interested in buying from distributors that are online and easy to use, so manufacturers should partner with distributors that have adopted ecommerce strategies to meet the growing demand for more mobile, digital, and automatic shopping.

Strojny also addressed concerns that come along with eCommerce. A major concern is security. A more digital manufacturing and commercial space introduces new security concerns, but manufacturers can limit their risks by ensuring they are compliant with the Payment Card Industry Security Standards Council.

Strojny pointed out that the main offenders in security breaches are credit cards—the recent major breaches, including Tuesday’s data breach at Staples, have all been B2C companies using credit cards as the primary method for transactions.

B2B companies, however, are more likely to use purchase orders, which are much less risky. 
Strojny noted that without a credit card number, the worst that could happen would be a leak of level 2 information like order history. By following the PCI Standards, manufacturers can limit security concerns.

The manufacturing space is undergoing a digital transformation, and the shift to eCommerce is a major aspect of the transformation. Strojny asserts that manufacturers need to adapt to eCommerce strategies or partner with distributors who have adapted, as buyers favor intelligent and easy shopping over more traditional channels.

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