The Unique Challenges Of Distributors Adopting Ecommerce Strategies

For decades, the retail sector and technology have worked together to address the ever-increasing and dynamic needs of consumers worldwide. The eCommerce wave brought in a paradigm shift to the way people shopped. Businesses quickly spread their focus to enhancing their online presence. In 2020, when the COVID 19 pandemic wreaked havoc globally, eCommerce became the preferred mode of shopping for a good majority of the world in some form of lockdown. But all the tech-driven buzz around eCommerce today is not just restricted to the B2C segment. The B2B sector too is cognizant of the opportunity to make an eCommerce impact. In fact, the global B2B eCommerce market is estimated to be worth around USD 20.9 Trillion by 2027 according to research. In fact, according to Forrester, nearly 17% of all B2B sales will be done online by 2023. This means that no segment in the B2B ecosystem can afford to ignore eCommerce.

This brings us to distributors. Distributors are a major driver of sales in the B2B business segment and in recent years have upped their investments in eCommerce as they know that they simply cannot afford to miss out on a huge opportunity to stay competitive in the digital era.

So, what does the market expect from distributors that incorporate eCommerce in their sales?

The typical online B2B buyer journey is more complex than that of a B2C buyer. A Google study found that a B2B buyer does an average of 12 searches online before deciding to engage with a particular brand or business’s website. A holdover from the times when salespeople used to move the buyer journey forward, buyers today expect the same level of personalized support as well as custom content marketing strategies to be used by distributors to influence their purchase decisions. The same degree of integrated automation between processes such as checkout, payments, logistics, and delivery is a critical requirement for B2B buyers. But ensuring that B2B buyers get a great experience is a huge challenge for distributors to tackle.

Why is eCommerce for distributors a challenging affair?

Diverse Product Portfolio and Scale

While distributors do not cater to such a wide audience as with B2C eCommerce websites, they have to deal with more variations and diversity in product brand selection. A distributor may deal with sales of a particular item from multiple brands or different items of the same manufacturer brand. They will have a huge portfolio of products that would have to be defined, described, categorized, analyzed for demand, and organized for better purchase experiences. The volume of items too will be a constraint. B2B distributors need to leverage powerful digital platforms to manage the entire length and breadth of product information to ensure products can be found and information provided as required.

Supply Chain Constraints

Distributors may have to associate with multiple partners and vendors for maintaining a steady flow of inventory to their warehouses. Besides, there will be a huge need for custom shipping and logistics options for bulk purchases or purchases of heavy machinery which will further put the onus on supply chain optimization practices within a budget. These challenges are not common in B2C environments.

Pricing and Payment Complexities

B2B distributors support all common modes of payment that any eCommerce platform offers. But then comes the unique requirements of a B2B purchase order. There may be a need to offer customized or itemized splits, integration with ERP solutions for holistic data robustness, and custom input fields required for bill generation. Also, there will be multiple legal and regulatory compliance needs that may vary across customers, industries, regions, and product categories. Payment modes too are diverse and include online real-time payment settlement, invoice settlement, credit lines, and much more. There are complex backend relationships that distributors maintain with their customers in the offline world. For a shift to eCommerce, the exercise requires innovative technology integration and workflow automation. This is why distributors are looking for powerful integration between highly-functional ERP solutions like Prophet 21 and eCommerce.

Existing Technology Integration Issues

When considering an eCommerce strategy, B2B distributors will need to onboard a powerful B2B eCommerce platform tailored specifically for the business challenges of distributors. As we have seen, the needs of distributors are unique, and addressing them with generic solutions will provide sub-optimal outcomes. To meet the rising expectations of the modern-day B2B buyer (referenced in the first point), distributors would need to fold a slew of digital enterprise applications ranging from marketing automation to CRM, ERP, and Analytical Engines into their eCommerce strategy. Delivering a successful outcome and a great customer experience every time may come down to the robustness of the integration.

Technology will become a driving force in ensuring a sustainable business outcome amongst popular B2B distributors when they take the eCommerce dive. Having the right advisory and the aptest technology platform that helps distributors to leverage the full set of capabilities to attract and retain B2B buyers may well be the best way forward.

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