The majority of manufacturers understand the importance – if not vitalness – of digitalization.
The problem is that the majority are also aware of the steep challenges involved in implementing digital sales channels, which hold them back when it comes to implementing a wholistic ecommerce strategy for their business.
All this helps to explain a plain fact: ecommerce accounts for just 10% of manufacturing revenue.
Separately, of 50 B2B manufacturers that pull in at least $272 million, the amount of them increasing their digitalization budget by 20% stands at 83%. Additionally, 41% of them agree that digitalization is an important part to expand into new revenue streams.
The source of most revenue, 54%, continues to come from direct sales and sales reps. After that, distributors make up 26%. Below distributors and direct sales, ecommerce and electronic data interchange generates 10% of revenue.
Customers, however, are becoming more and more used to doing business digitally. In addition to this, B2B customers also prefer self-service, digital interactions, and making online purchases for big transactions as well as complex products.
And so for manufacturers, selling more complex products through ecommerce channels is going to open up greater opportunities to boost customer lifetime value.
The problem is that despite the positives, there are challenges inherent in them. In fact, just over 1/3 of all B2B companies (34%) are not implementing ecommerce solutions due to them not understanding the value of it.
Then there are 30% of manufacturers in which channel conflicts are holding them back when it comes to fully implementing ecommerce solutions.
There are other challenges that are also holding back manufacturers when it comes to implementing strong ecommerce solutions. These challenges include a lack of regional market knowledge, which is a concern of 38% of them.
Channel conflicts appear when distributors are alienated by digital solutions. Yet these conflicts can easily dissipate if channels are integrated into software. And to create deeper regional market knowledge, manufacturers could develop their brand based on a specific region’s demographics.
In terms of ecommerce software that manufacturers can implement, they should go beyond a simple functional ecommerce store. They need to be able to rise to the elevated standards of consumers. An organization’s ecommerce platform today needs to include mobile touchpoints, easy integrations with marketplaces, management for reselling and distribution, and an omnichannel customer experience… Is that too much to ask for!?