This week, almost 400 professionals, experts and vendors in the Manufacturing and Distribution space met at the B2B Online 2016 conference in Chicago at the Loews Chicago Hotel. The show, put on by Worldwide Business Research, is in its fourth year and has almost doubled in size since last year alone. Attendees learned from three jam-packed days of sessions on digital innovation and disruption; customer-centric digital best practices; and internal best practices for a digitally-focused enterprise.
Four51’s CMO, Chip House, spoke on Tuesday afternoon on the topic of “Manufacturing and Distribution 2020: How your business’ unique needs will be met by the platforms of the future.”
If you missed the presentation, here are the 3 things you need to know about the future of B2B eCommerce for manufacturers and distributors:
Digital Self-Service is the Expectation.
House started his presentation by asking the audience, “Okay, how many of you bought your plane ticket by walking up to the counter at the airport?” After no one raised their hand, he continued, “And how many of you purchased your ticket over the phone?” Again, the room was silent. That’s because most people probably booked their ticket online or using an airline’s booking app. This phenomena of digital self-service, a type of electronic support that allows customers to use technology to access information and perform routine tasks, is popping up in many aspects of our lives:
- Instead of waiting in the rain to hail a cab, you request a driver through your Uber app.
- You book through the Open Table app or the restaurant’s online reservation system, instead of calling a restaurant to make a reservation.
- Even at McDonalds, you’re now able to place your order on a screen, instead of waiting in line to give your order to one of the staff members.
- With the click of a button, you can reorder Tide right from your laundry room when you run out, thanks to the Amazon Dash.
From a B2B standpoint, it’s becoming customers’ expectations that they can order online in the same way that they can in all other areas of their lives. It’s important that we continue to evolve in this space, just as we have and continue to in many other aspects of our lives.
Manufacturers and Distributors aren’t prepared for how commerce, mobility and big data will affect the industry by 2020.
In a recent survey conducted by Four51 to over 200 North American manufacturers, nearly 25% of these manufacturers cited that they don’t have a business plan to get to 2020. 75% of manufacturers sell direct today. 54% still use offline methods, with the primary order management method today being Sales Reps at 33%. “You can’t expect someone who’s used to ordering their lunch from Bite Squad, streaming their home entertainment through Netflix, and telling Amazon Echo’s Alexa to ‘add butter to the shopping list’ when they run out while cooking dinner, to call a sales rep to order parts needed to run their business,” House said. But by 2020, 56% of manufacturers think they’ll be doing more than half of their orders via eCommerce, with offline methods like fax and phone decreasing in use. Businesses who haven’t developed this mindset of digital transformation need to shift their focus now, if they are to keep up their competitors over the next 5 years.
Developers now have a seat at the table, and they’re choosing PaaS over SaaS and On-Premise software options.
During his presentation, House released new research commissioned by Four51 and conducted by Forrester Consulting. An online survey launched in March, 2016 asked 150 software development and software architecture professionals in the US with experience in B2B development projects to share more about their involvement in and preferences for different eCommerce development options. The study found that 58% of developers surveyed report an increased role in the evaluation and selection of B2B eCommerce solutions. “This is important,” Chip explained, “because when paired with developers’ disappointment with current B2B eCommerce deployments, businesses realize they need to start considering better technology options for B2B eCommerce.” Only 36% of the respondents said their current solution was excellent at delivering various qualities. Because of this, Developers are increasingly choosing PaaS because of a more modern development environment, framework, or APIs, better support for mobile devices, and improved security of data and transactions. PaaS-based systems are posed for the largest increase in B2B eCommerce deployments. The rate of increase in PaaS solutions over the next two years is twice the amount as SaaS. Developers are more comfortable using PaaS environments.
House challenged B2B Online 2016 attendees to rethink their company’s approach to B2B eCommerce, to ensure the right stakeholders are at the table when choosing a solution, and to get moving now, before it’s too late.