Recently, DCKAP had the opportunity to sponsor and participate in the P21 WWUG CONNECT 2017.
CONNECT is where P21WWUG members come together from all across the world to learn, socialize & make connections with each other. CONNECT is an annual event organized by Prophet 21 World Wide User Group board. Presentations are provided by the user group members and sponsor vendors.
This was our first CONNECT conference. We were excited and ready. Distributors visited the booth during their session breaks. There were a lot of interesting talks, exchange of ideas and insights from the distributors. Soon, a pattern began to emerge. Most of them had an eCommerce solution but were not happy with it. Some knew Magento, and some did not. Some were considering Epicor Commerce Connect. A few did not have an eCommerce site and were looking for a suitable solution.
This article is for those distributors who still do not have an eCommerce solution and why it is important for them to go online now.
eCommerce In Distribution
In a research conducted by CEB Marketing Leadership Council in partnership with Google, the survey revealed “that the average customer had completed more than one half of the purchase decision-making process prior to engaging a supplier sales rep directly. At the upper limit, that number ran as high as 70%”.
- 57%—that’s how far the average B2B buyer is through the purchase decision before engaging a supplier sales rep.
- 12%—that’s how much of your customer’s total mindshare of you as a supplier have across the entire B2B purchase path.
Distributors who do not have an eCommerce platform face competition from
- Traditional competitors who have an omnichannel and multi-channel presence.
- Marketplaces such as Amazon Business, Alibaba or thomasnet.com
A few insights from a Real Results Marketing survey…
Distributors Need To Take Bold Action
- Manufacturers are clearly and aggressively embracing the e-commerce channel.
- Manufacturers clearly see the need for e-commerce and are advancing toward growth and maturity. This e-commerce offensive by manufacturers could be a disruptive change for distribution.
- Distribution respondents lag manufacturers respondents in the maturity of their e-commerce journey. They are shifting their journey from nascent to more mature stages, but are doing so at a slower pace than manufacturers.
- The differences in manufacturer and distributor respondents point to a bold action needed by the distributors.
- Distributors that are not aggressively embracing e-commerce face a quandary; get on board quickly or manufacturers may go around them.
- Manufacturers indicated that a key factor when adding new distributors is evaluating how robust is the distributor’s e-commerce channel.
- The intimation is that manufacturers know the path to more sales resides in offering products in multiple channels, with e-commerce driving the change and intend to succeed with e-commerce.
- Manufacturers added clarity to this idea; they don’t have time to nurture distributors without solid e-commerce options and will more aggressively secure and support distributors that do offer a strong e-commerce channel.
B2B Buyer Behavior
- For B2B buyers, word of mouth and web searches are the best ways of finding info.
- Twenty-something B2B buyers are TWICE as likely to use social media as 31-40 year olds.
- B2B buyers find most whitepapers and blogs via Google, but find out about most seminars by email.
- 21% of B2B buyers use social media at some point in the buying process.
- 22% of buyers are ready to move to a new distributor (supplier) that could provide a better eCommerce experience. For a $100M revenue stream with 25% gross margin, that means up to $5.5M of gross profit dollars at risk.
- B2B buyers are far more likely to use LinkedIn for conversation than for just finding articles. This is less true of Twitter.
- B2B buyers see Twitter as more useful at the later stages of the buying process.
Why Distributors Must Go Online NOW!!!
When talking to distributors in the CONNECT conference, it was clear that some of them had frustrating experiences while implementing/using their ERP and/or eCommerce solutions.
However, moving online is not an option anymore. A research report, reveals that at the zero moment of truth, that is, when the buyer is shopping (finding, researching and evaluating products, she does an online search or visits the manufacturer’s website or the distributor’s website.
Today there are many popular eCommerce platforms, like Magento, that offers native B2B features. Magento is a leader in B2B ecommerce, powering 41 merchants on the Internet Retailer B2B eCommerce Top 300 list.
Watch out this space for more articles on eCommerce in Distribution.