Manufacturers: eCommerce Will Replace Your Sales Team

March 8, 2016

Category: Best Practices

Manufacturing is changing, and the pace of change is accelerating. The latest set of disruptions; the internet, mobile, big data, modern APIs, robotics, 3D printing, and more were all recent changes manufacturers had to grapple with, and will need to conquer to move forward. How can manufacturers prepare for the next set of changes? How can they best anticipate changes in technology and customer buying behaviors? What type of planning, R&D, and investment are manufacturers considering for the future? More importantly, as a manufacturer, what can YOU do now to prepare for the brave new world of 2020?

These are the questions we set out to answer in our new piece of research we call “Manufacturing Commerce & Technology 2020.” This January we surveyed 200 large and mid-sized North American manufacturers and asked them how they are preparing for the digital future of 2020. The findings are fascinating, and are a must-read for anyone in the manufacturing space.

Here are some of the key findings for manufacturers from the survey:

Many manufacturers are not prepared for the digital future.

Greater than 22% of US manufacturers do not have, or don’t know if their business has a 5 year business plan that contemplates the year 2020. 28% are investing less than 5% in R&D spend or don’t know what it is.

Orders will shift from sales team to eCommerce.

Sales reps are the top way US manufacturers take orders today with 33% of companies reporting this. In year 2020 eCommerce will replace sales as the primary way in which orders are managed. In fact, 56% of organizations believe eCommerce will be number one.

Mobile is key today, and will become even more critical.

Nearly 38% of companies don’t have (or don’t know if they have) an eCommerce site which is optimized for mobile devices. Manufacturers expect to be investing more in mobile app strategies, with a 23.5% change in the number of them expecting to invest in by 2020.

Big Data, Online Commerce and Mobile Commerce drive investments.

Big Data, Online Commerce and Mobile Commerce top the new technologies driving manufacturing investment in 2020. Themes of automation, internet of things (IoT) and other technological advances are top of mind for many of the respondents.

Security is one of the biggest concern of threats in 2020.

Many of the manufacturers are looking for new ways to protect their data from external threats.

The biggest takeaways for us is how impactful online and mobile commerce will be to manufacturers over the next 5 years. Much of the benefit comes from the lower cost of eCommerce – especially when done via the cloud. As indicated above, there is a 55.8% positive shift toward eCommerce by 2020. The shift comes at the expense primarily of the expensive sales and call centers, which show a 38.6% decline and 31.6% decline, respectively.

My take, is manufacturers can’t afford to wait to adopt eCommerce, as it is just too good for their bottom line, especially when cloud-based solutions are chosen. Forrester Research indicates 47% of B2B companies believe profitability per online order is increasing and that B2B companies can slash the costs of serving and selling to customers by 90% via self-service eCommerce (Forrester Research. Benchmarking B2B eCommerce Performance, 2016).

So let’s sum that up equation: Lower cost + Higher transaction size = Happy Manufacturer.