Manufacturers See E-Commerce As Transformative Yet Some Still Lag Behind

Posted by on Mar 7, 2018 in Uncategorized | 0 comments

Ran into a great article from Manufacturing.net by Michiel Schipperus

The article considers the relationship of manufacturers to e-commerce technology, and the adoption of that technology.


To compete in a global marketplace, manufacturing firms are augmenting their e-commerce strategies with new technologies, such as predictive ordering and artificial intelligence (AI), to make it easier and cheaper to do more business, with more customers. But, for every manufacturer on the cutting edge, there is another that is lagging far behind its peers when it comes to e-commerce.

We recently undertook  research of over 220 global manufacturers and found some stark contrasts between those who are forging ahead and those who have yet to recognize the need for change. While many manufacturers are already implementing digital strategies centred on improving the customer experience as a way to grow sales and streamline operations, others are not. Fifteen percent have been using an e-commerce solution for more than five years, but 13 percent still don’t yet use e-commerce at all.

E-commerce improvements are typically part of a wider digital transformation program: manufacturers see e-commerce as playing a vital or very important role in digital transformation. The top reason given for e-commerce adoption by those already up and running was to increase sales volumes (60 percent). Other important reasons included to offer a 24/7 self-service portal (46 percent), to improve sales processes (41 percent), to be able to share all product and price information online (40 percent, to keep up with competitors (38 percent), and to drive global export sales (36 percent).

Those that have implemented e-commerce are seeing results in both their bottom line, businesses processes and the quality of the customer interaction. Ninety-one percent reported that they saw a financial return on investment in fewer than two years with ten percent seeing a return in as little as two months, and 21 percent in two to six months. Eighty-eight percent saw profitability improve by at least ten percent, with nine percent saying profits had increased by more than 50 percent. Other benefits reported include improvements in order process efficiency (89 percent), an increase in order processing speed (78 percent), a reduction in order errors (71 percent), and faster inventory turnover (70 percent).

A further driver for investment in e-commerce is the growth in the range of products being sold over the web. Despite the technical and bespoke nature of many manufactured products, 68 percent of manufacturing respondents agreed that 100 percent of the industry’s products will be sold online. This indicates a market readiness, alongside confidence that e-commerce solutions can and will offer the sophistication required to handle even the most complex purchases.

Many manufacturers also believe that ecommerce will help open the business up to new markets. Seventy-one percent of manufacturing respondents believe that they will sell direct to the consumer, cutting out wholesalers and retailers, in the future. This is another huge change, disrupting traditional manufacturing marketplaces and supply chains. Forward-thinking manufacturers will need to choose systems that will work successfully in both B2B and B2C markets and, as importantly, be able to make the best use of the data it already has to offer better customer experiences.

The research also revealed that many manufacturers are moving beyond e-commerce and embracing some of the newest technologies. Seventy-three percent say they use or intend to use artificial intelligence (AI) to enable automated and/or predictive ordering. Similarly, 81 percent already use or intend to use machine-to-machine communication for automated/predictive ordering.

As customer expectations of online speed and convenience continue to grow and competition ramps up, successful business strategies will increasingly depend on using technology in selling as sophisticated a way as it is used in the manufacturing process itself. It’s clear that manufacturers who accept that the market is changing and respond accordingly will be those best placed to succeed.

Michiel Schipperus is CEO of Sana Commerce.

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Why Manufacturers Can No Longer Afford to Wait to Sell Direct to Customer

Posted by on Jan 10, 2015 in Uncategorized | 0 comments

Aug 05, 2014 5:08 PM  By

From Multichannel Merchant

In 1984, CompuServe became one of the first entities to make online shopping possible with its Electronic Mall. Yet thirty years later, many branded manufacturers are still tiptoeing into the ecommerce waters. Why aren’t more brands diving in?

It is certainly not for lack of opportunity. Forrester Research states that 60 percent of all U.S. retail sales will involve the Web by 2017—as much as $370 billion annually. Moreover, a survey by PwC shows that 52 percent of online shoppers in the U.S. are already going directly to brands and manufacturers websites with the intent to buy, driven by a greater assortment, and brand loyalty.

On top of the undeniable growth prospects, direct-to-consumer (DTC) selling offers manufacturers other important advantages. Because many shoppers prefer to make their first stop at a manufacturer’s website when they are researching a product decision, why not capture the sale when they are there?

Adding a purchase capability to their site and taking the sale direct gives the manufacturer, instead of the retailer, the chance to learn first-hand what consumers are shopping for—and why. The business intelligence gathered about buying trends, regional preferences and product positioning can be used internally as well as shared with your retail partners, thereby strengthening the complete channel.

Despite the selling advantages and business opportunities associated with going direct, many manufacturers are still reluctant to jump in for fear of alienating their traditional channel partners. Contrary to the lingering myths, however, DTC does not harm channel partnerships—in many cases it strengthens them. It is not inconsistent for a manufacturer’s website to offer consumers an option to purchase directly as well as a “where to buy” capability that redirects them to a retail partner’s website or local brick-and-mortar store. T

he fact of the matter is that consumers will buy from the channel that best suits their needs and interests—so it only makes sense to make it as easy as possible for consumers to purchase your products according to their preferences.

More often than not, “channel conflict” is an objection raised by internal sales organizations rather than by the retail partners themselves. Many industries—consumer electronics and apparel manufacturers chief among them—learned years ago that DTC commerce can co-exist with retail partnerships. Now, dozens of other categories, including hobby and toys, power tools, home and personal appliances, health and beauty, and sporting goods are learning from their predecessors.

Establishing a robust and competitive DTC presence, however, does involve effort. Sufficient resources must be allotted to support not only the operational aspects of the ecommerce site, but also provide a solid marketing foundation.

Manufacturers’ ecommerce sites must play well with their brand identity as well as the native demands of the Internet; e.g., SEO, social media and so on. Of course, reliable supply chain logistics and customer service capabilities are essential as well. The manpower and expertise required for these functions are why many manufacturers often choose to partner with an outsourced ecommerce services provider.

Regardless of whether internal or external capabilities are brought to bear, perhaps the most difficult question about DTC e-commerce involves how to price your products. Many manufacturers assume they must publish full MSRP pricing in order to protect their channel partners. There are risks to your brand to pursue such a strategy.

Consumers go to a manufacturer’s website for a wide range of reasons. While they may only be conducting research or searching for the latest product information, many want to buy directly from the manufacturer and often are willing to pay a slight premium to do so. However, if your retail partners sell the same item for 20-40 percent less than the price on your site, your customers are likely to feel insulted.

If you’re lucky, they might go on to purchase your product from one of your retail partners. But they’re just as likely to abandon the sale altogether—or worse, buy your competitors’ product. Think of it this way: your website is a direct extension of your brand. Damage your visiting consumer’s experience and you damage your brand.

On the other hand, pricing that meets or is only slightly above the average retail price gives the consumer options. They can choose the channel that is most convenient or attractive to them at the time, which supports your entire channel ecosystem.

Manufacturers have inherent advantages that consumers are drawn to. It’s important to leverage those opportunities in order to offer buyers options that no retailer can match. In addition to accurate and timely product information, manufacturers can deliver an “endless aisle” of product assortment or include unique bundles and closeout items.

Retailers have only so much shelf space – where you are competing with other top selling brands as well as the retailer’s in-house brands. As a manufacturer, you have many more options with your ecommerce site.

DTC selling is clearly going mainstream and offers the ability to forge relationships, gain important customer insights, increase channel revenue and protect brand loyalty. By providing a complete and fulfilling experience, product manufacturers can better serve their customers’ long-term interests—as well as their own.

Alex Becker is Global Vice President & General Manager, Branded Manufacturers for Digital River.

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FTC: State Bans On Tesla’s Direct Sales Model Are Hurting Competition

Posted by on Jun 6, 2014 in Uncategorized | 0 comments

The Federal Trade Commission is now supporting Tesla’s Direct Sales Model.  The government agency is arguing against the state bans on Tesla selling direct to consumers.

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Richard Branson Reveals His Customer Service Secrets

Posted by on Apr 26, 2014 in Uncategorized | 0 comments

From Forbes,

 Forbes.com contributor and communications coach, Carmine Gallo, learned 7 valuable customer service lessons in a day with Richard Branson and the Virgin America team.

Article: http://www.forbes.com/sites/carminegallo/2013/05/09/seven-customer-service-lessons-i-learned-in-one-day-with-richard-branson-video/

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Sharing the Story

Posted by on Dec 31, 2013 in Uncategorized | 0 comments

Potential customers in today’s world are bombarded by unmeasurable amounts of technology and noise.  But they are still humans (so far).

And humans love a great story.  Storytelling is one of the age-old experiences.  It is how we know our history.  Our ancestors shared stories among the generations, through speaking and the written word.  Newer technology allows for storytelling via audio/video recording, photography, and the internet.

The entertainment industry still draws a lot of viewership in books, television, and movies.  All are a means to tell a great story.  The so-called reality shows have generally been a huge hit as viewers see the story of supposedly real people.

The same applies in business.  Potential customers care about the story.  The marketing department at Apple has grown their brand with the sharing of the story of their founder (Steve Jobs) and create buzz stories with each new product launch.  (They mostly manufacture overseas, and work hard to suppress that story.)

Today’s customers still love a good story about how the company was founded, how it gets materials, where it operates, etc.

A good story builds trust for the brand.

Trust is important as a customer exchanges money for value.

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Direct Mixers & Tanks

Posted by on Dec 21, 2013 in Uncategorized | 0 comments

Mixer Direct is a company that manufactures and sells equipment direct to the end user.  They work directly with these end users to design and manufacture large industrial tanks and mixers customized to a customer’s application.

Working direct ensures that the customer has good communication on project details and requirements.  Efforts are streamlined when it comes to designing and building the equipment.


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