By Anna Wells | April 15th, 2021
The pandemic has galvanized a “new normal” that’s been years in the making.
We talk a lot these days about what the “post-pandemic workforce” will look like. Will we recede back into our old habits or are some changes, implemented by necessity, simply here to stay?
For many organizations, the telecommuting trend was already used as a way to provide soft benefits for talent acquisition. Workers were already demanding flexibility in some sectors. We’ve already seen evidence that this trend will likely persist where there are investments in culture and retention.
Likewise, in distribution, e-commerce is more than just a cresting wave. The impetus for robust online sales functionality has been accelerating for years, but it was the pandemic that removed the last training wheel and sent it speeding off into the distance. There’s debate over whether distributors are completely ready, but even B2B consumers spent the last year adjusting to the new normal and some industry experts say there’s no turning back.
Is It a Win-Win?
Analyst firm McKinsey & Co. says COVID-19 has changed B2B sales forever and one of the reasons is that e-commerce is good for everybody. According to a recent report published by the firm, “More than three quarters of buyers and sellers say they now prefer digital self-serve and remote human engagement over face-to-face interactions — a sentiment that has steadily intensified even after lockdowns have ended.”
One reason cited by the report is safety, but there are others that suggest the e-commerce trend will endure beyond the present health and safety risks: most notably, it’s easier for buyers to get information and place orders. In fact, says McKinsey, “only about 20 percent of B2B buyers say they hope to return to in-person sales, even in sectors where field-sales models have traditionally dominated.”
Ready or Not
From a seller side, where sales practices tend to be entrenched, are distributors ready for this shift?
“Wholesale distributors are laser-focused on customer service, but during the pandemic, their ability to interact with their customers changed overnight,” says Kelly Squizzero, Senior Director, Industry & Solution Strategy, Infor Distribution. “For some, the methods they had relied on for ages were no longer adequate.”
According to Squizzero, the shutdowns forced salespeople to find new ways of engaging. “Buyers were not necessarily working in their office with all their typical resources. Distributors needed to find ways to make more product information available, quickly and easily, to help their customers make buying decisions.” And besides the more broadly perceived role of e-commerce, which is transactional sales, many distributors see as much, if not more value in providing a portal than can house critical purchasing information. This includes, says Squizzero, installation guides, certifications, product images, and special pricing. Then, she says, “It was up to the distributors to step up and help customers adjust to this new way of doing business, in whatever format, timeframe, and mechanism made the customer comfortable.”
Disintermediation and the Role of E-commerce
As the pressure to adapt or die becomes more intense as the pandemic drags on, distributors have another challenge to consider: will manufacturers make their own shifts to e-commerce in an effort to adopt more direct-to-consumer strategies?
In a recent article for Forbes, Michael Southworth, the CEO of e-commerce marketing firm Elemerce, explores this further, suggesting more benefits for D2C are emerging. Advantages like the ability to fully control the sales process and the way your product is marketed are nuanced; some suppliers want to offload these efforts. Yet some other aspects are more universal: any manufacturer, for example, would be glad to give up sharing space with a competitor.
But the reality is there’s little value to be derived from the above if a manufacturer’s website and marketing efforts can’t offer their products as much exposure as they would get from a distributor’s e-commerce efforts, which is why it’s all the more important for partners to step in show what they can offer in this regard.
An Existential Threat?
“If distributors don’t develop their e-commerce capabilities and thought leadership, it poses existential crises for them,” says Sam Gupta, Principal Consultant at ElevatIQ, a digital transformation consulting firm.
And with each supply chain link changing shape, will they continue to fit together? “Traditionally, manufacturers worked through distributors to access regional markets, as serving these markets directly would be more expensive for them. With pandemic, the ‘local’ factor has been deemed irrelevant,” Gupta explains. “Also, with the threat from Amazon, SMB distributors can’t compete solely based on price due to Amazon’s economies of scale. This factor is especially relevant for distributors that sell high-volume consumables.”
With these added pressures, the solution lies in distributors taking a very focused approach. According to Chris Grainger, Engineering Manager at electrical distributor EECO, “if you look at the industrial market, there’s a lot of information out there that you can get straight from manufacturers, but we’re the distributor, we’re the middle guy. So we need to be the ones leading the message for our customers and serving them the best way we can with the thought leadership.”
He also suggests that the distribution market has changed entirely in the last few years: “With dropping revenue levels due to the pandemic, manufacturers had to seek new ways to sustain. This trend has accelerated manufacturers considering D2C as their primary revenue channel or mixing it to compare both channels’ performance.”
The Best Foot Forward
In other words, adapt or face the consequences. And for a software solution provider like Infor, the best way is to take a nimble approach to customer service by way of technology, specifically by offering powerful self-service capabilities through a robust e-commerce platform, at which point placing orders becomes simple. Investments in an e-commerce platform should prioritize two key areas, says Infor’s Squizzero: the platform and the experience.
The e-commerce platform must:
- Make it easy for the marketing department to manage e-commerce content
- Be in the cloud to enable automatic updates and ongoing innovation
- Be tightly integrated to your ERP system to ensure accurate and timely information
The e-commerce experience must:
- Be easy to navigate and natively mobile
- Provide a powerful search engine with access to detailed product information
- Offer flexible payment terms and delivery options
- Maintain ongoing communications of the order lifecycle, including confirmations and changes
“These best practices will add value to your distribution business far beyond the challenges faced during the pandemic,” she says.