Economists have a split decision on 2023. Their prognostications could be summarized as 60% predicting a recession, many calling for a major slowdown resembling a recession, and a few foreseeing more turmoil with a fancier name.
It is safe to assume this year will put a few new lines on our already wrinkled brows, and quite possibly add a richer shade of gray to our hair.
During times like this, many business leaders become conservative in their cash outlays, putting off investments they feel are important but not critical for the immediate future. This works well with things like trading in vehicles, acquiring new office furniture or other expenses. On the other hand, investments in things expected to enhance productivity, bring in new business or improve market share are continued and sometimes accelerated.
eCommerce belongs in the second category because it provides all three of those important drivers during a slowdown.
Our industry is on the cusp of a phenomenon, the same disruption that made the local mall obsolete.
The Distribution Strategy Group’s 2022 State of Distributor Sales reported a record 56% of distributors have some form of ecommerce platform. While the report did not delve into the quality of the webstores provided, the consensus is most distributors are still in the early stages of web-based sales and still investing. Only 45% of those surveyed indicated they were satisfied or very satisfied with their current sales efforts. Most were looking to web-based technologies as a tool for improving their status.
Another Distribution Strategy Group report, The Manufacturer Omnichannel Index, outlines some glaring holes in the web strategy of a group of manufacturers. According to the study, only about 50% have a Search Engine Optimization (SEO) rating of good or great. This means the other half may face the reality that customers cannot find their offerings, thus crippling their efforts to sell products.
The report also outlines issues with proper product data, workable product selectors and even a massive 77% deficit in page-loading times, meaning customers find themselves waiting too long for answers and “surfing” off to other websites.
The Importance of eCommerce During Recessionary Times
Regardless of whether you are a distributor or manufacturer, ecommerce is one of those must-have investments. To further illustrate the point, we have gathered some important points for your consideration.
- A report released by the CMO Council states that 87% of B2B buyers say online content has a major or moderate impact on vendor selection.
- A Salesforce study stated 89% of these buyers expect content to be delivered to them in even easier ways in the future.
- A Digital Commerce 360 study found that 90% of B2B buyers who use the internet for research visit from two to seven websites before they make a purchase.
- A Convince & Convert survey found that 80% of B2B buyers expect the same buying experience as B2C customers and, if they desire interaction, they expect it in real time.
- Another Salesforce Report said 57% have stopped buying from a company because a competitor provided a better online experience.
Capping this off, a McKinsey and Company report indicated the combination of traditional selling with online sales, which they call hybrid selling, would drive up to 50% more revenue by “enabling broader, deeper customer engagement and unlocking a more diverse talent pool than more traditional models.”
Clearly, the use of ecommerce will improve sales, but that is only one factor.
eCommerce lowers the cost of sales.
Experience dictates sales and customer support teams spend a substantial percentage of their time on routine tasks. In post-pandemic years, one of those tasks centered on delivery and availability. What’s more, customers tell us they feel many of these transactions take frustratingly long to accomplish.
Freight costs, when charged, are another timewaster for both sellers and potential buyers. A robust ecommerce presence allows customers to answer these routine questions in real time via the web.
Another way ecommerce saves time: It allows customers to easily find and compare products required for their application. Products can be selected automatically by allowing the customer to enter in specific application needs. For example, in the selection of an electronic sensor, the customer would interactively enter in voltage, current, sensing distance, operating environment and physical dimensions required to arrive at a part number.
That saves time for both the seller and customer.
Many customers (for example, contractors, systems integrators and panel shops) have discovered that creating bills of materials required for their proposals can be done via ecommerce as an alternative to their old methods that required multiple interactions with the supplier. One such customer went on record 70% time savings. This points not only to an improvement in customer satisfaction, but also a savings to his supplier.
Sales and customer service team members are a costly resource. Automating a portion of their tasks allows them to be more productive and to better channel their efforts toward more important activities. This directly affects the organization’s bottom line.
eCommerce helps new customers find you.
One striking point from the 2022 State of Distributor Sales Report was only 34% of the sales leaders surveyed were satisfied with their efforts in finding new customers. Currently, traditional salespeople are viewed as a primary source of new customers for distributors; most executives feel this is a dead-ahead failure. Yet, new customers are the lifeblood of a growing sales organization.
eCommerce is a rising star in the world of new customer identification. It radically changes the way new customers are identified in that they find the seller rather than the other way around.
A webstore with the right SEO tools helps customers find you via search. A Salesforce report states ecommerce has surpassed in-person methods as the single most effective channel for new sales.
A happy buyer from the webstore tends to stick around once they sample the service and offerings derived from a web-based experience. Selling organizations that personalize the experience after a web-based sale are very likely to continue to move forward in the sales experience and bring the customer to the point of buying more products and services.
The bottom line: Don’t skimp on ecommerce
eCommerce is necessary for distributors today. And the investment is a fraction of the costs of just a few years ago. The benefits are too big to ignore:
- Expanded customer service
- Improved productivity
- New customers
- Increased revenue
Our conclusion: eCommerce is terrible place to skimp in both bad and good economic times.