B2B Distributors Continue to Explore the New Frontier of E-Commerce

Over the past 24 months, the dynamic between B2B manufacturers and distributors changed in a major way. Since COVID-19 caused some extreme disruptions in the supply chain, it’s difficult for both manufacturers and distributors to keep pace with shifting consumer demands. Now more than ever, B2B distributors need to create a new business model that upholds comprehensive online shopping experiences on their websites.

Even before 2020, digital commerce showed tremendous traction with a historical growth rate of 15% year over year. This is why many tech experts consider the pandemic to only be a catalyst in expediting the adoption and acceptance of e-commerce on a mainstream level — B2B commerce just needs to get on the same page as B2C retailers and wholesalers.

There is no going back to “normal,” either. The challenges of the pandemic, coupled with extreme shifts in customer expectations and demographics, mean that manufacturers and distributors will continue to face disruption to their traditional business models. But, technology feeds on disruption, and B2B distributors can use tech to their advantage, evolve their fulfillment workflows, and unify the customer’s online and offline experiences.

B2B distributors need to start with their business’ website and focus on constructing an end-to-end shopping experience for users. Since these particular users tend to be Millennials or one of the many Zoomers now entering the workforce, it’s crucial to offer the right contactless tools that appeal to them, specifically.

Time Is Up on the Lack of Digital Processes for B2B Distributors

For years, B2B manufacturers focused on building the best possible products and kept the in-person aspect of the business going strong with all of its luncheons, handshakes, and paper trails. The right channel partner could take care of the more nuanced pieces of the sales pipeline. The pandemic made these in-person practices obsolete, however, and now, manufacturers rely upon their distributor partners more than ever. This massive deviation from the traditional model begs the question: How can B2B distributors sell products more effectively online and relieve the new stressors they and manufacturers face?

“All steps of the sales cycle need to be examined,” explained Randy Higgins, Chief Strategy Officer of Shift7 Digital. “There is a lot of pressure on the supply chain and fulfillment piece for manufacturers. Many of them are having to figure out new ways to pick, pack, and ship at much smaller volumes. It has rippled through every functional area of numerous organizations.”

To relieve the excess pressure on their manufacturer counterparts, B2B distributors are ultimately taking on added workload by prioritizing the “digital-first” mindset seen across B2C. Higgins added, “We are seeing a lot of investment on the ability to promote products digitally, and also to facilitate the sales cycle from a commerce perspective.”

With B2B distributors pivoting to provide top-notch user experiences, they aim to go beyond simply standing up a digital storefront and improving “findability.” B2B manufacturing products are often so complex and multi-faceted that it presents a unique challenge to marketers and merchandisers alike. A B2B e-commerce strategy needs to bridge the gap and build solid pathways for customers to easily find a part, piece, or even an entire item in an online setting.

Think of it this way: Equipment sold by B2B manufacturers is very specific, whether it’s being installed or repaired, and consumers of these products don’t always know what they necessarily need to solve their particular problem. It’s up to the distributor to create and maintain a digestible online shopping catalog with all of the correct information in one place, from the item number and product name to the descriptive details. If these items aren’t properly organized and optimized, customers may become frustrated in their search and look elsewhere to make their purchases.

Before the pandemic and the rush to digitize, the distribution industry was described by insiders as “very big, very old, and heavily fragmented.” Unfortunately, the needle to change is moving slowly, and all B2B distributors need to implement a self-service model that fully automates the customer’s online journey as soon as possible. While manufacturers are digitizing at a rapid rate of 70%, distributors are lagging behind and only conducting 40% of their business online. This is bad news for manufacturers hoping to create another competitive online channel with their distributor partners.

However, 56% of distributors claim that they are underway with digital transformation. The ones making the jump are already experiencing positive results: higher conversion rates, larger order values, increased brand loyalty, more customer data, and accelerated revenue growth. With such promising outcomes in plain sight, B2B distributors need to not only keep pace with these efforts, but also must strategize on competing against Amazon Business.

Amazon Business Is Booming, but It’s Also Undisputed

In 2020, Amazon Business reached $25 billion in worldwide annual sales. To give this number a bit of context, the offshoot of the popular Amazon Web Services (AWS) hit $10 billion in 2018. Growing more quickly than AWS at 44 percent year over year, Amazon Business was leveraged during the first year of the pandemic by more than five million companies to stay afloat.

While Amazon Business has the potential to be a great distribution channel to sell manufacturers’ products, the pandemic, environmental factors, and talent shortages are all signs that distributors should establish a digital shopping experience of their own and not rely on a third-party channel so heavily. Digitizing opens up a new sales channel, and also positions B2B distributors to compete with Amazon Business.

Despite their newfound efforts, distribution companies will likely never contend with Amazon’s fulfillment centers. And that’s okay. Amazon has the money, resources, and capacity to fulfill, ship, and deliver orders in an unprecedented and untouchable way — at least for now. Rather than ruminating on operational excellence, it’s best to think strategically about the user experience as a whole.

​Even though most B2B distributors know their customers well, situational awareness is often stored in the minds of salespeople or the account notes of a customer relationship management (CRM) software. By providing a digital experience, every step taken by the end-user will be aggregated and analyzed to give a full snapshot of each customer’s journey. Once enough data is collected, it is segmented, organized, and easily circulated.

This pipeline is one that Amazon will struggle to replicate because their experience is not designed with product discovery in mind. While its marketplace’s selection is vast, it is still assembled with a variety of different sellers and vendors. At the end of the day, Amazon goes through many fragmented steps to accumulate all of the patchwork detail about a product onto a single detail page that targets its intended viewer.

It’s not a subconscious misstep on Amazon’s part, though. Amazon simply owns the transactional piece of their e-commerce strategy, making their website a great one to visit when the customer knows exactly which screw they’re looking to purchase, for example. But when the customer isn’t sure which screw is best for the job? That’s when things end in disappointment. This issue, not even unique to Amazon, is unlikely to improve any time soon if your business doesn’t have the right digital tools in place.

While customers will undoubtedly have raised expectations for delivery speeds, B2B distributors should see Amazon’s “Achilles’ heel” as an opportunity to capitalize. “I believe the end buyer is now much more trained because of Amazon,” said Higgins. And it’s no longer upsetting to get 10 different boxes from 10 different retailers on our porch on any given day.” These expectations set distribution businesses up to counter Amazon’s tactics with their own approach to efficiency and expediency.

Start with the very beginning of the sales pipeline: product discovery. When distributors give their customers automated tools to find exactly which part or piece they need, the sales process can be expedited without two-day shipping. Pair this strategy with the right informational components via relevant content, and it’s easy to see that shipping policies aren’t always the main deciding factor of a purchase. It’s time to focus on the entire buyer’s journey, not just a fraction of it.

Bloomreach and Shift7 Highlight the Potential in Creating Digital Experiences

Shift7 Digital, a trusted partner of Bloomreach, is encouraging B2B distributors to revolutionize the e-commerce experience for their customers. Backed by a team of experts with deep industry knowledge, Shift7 truly understands both the challenges and opportunities in the B2B market today, and pushes clients and prospects to evolve from a product-centric approach to a customer-centric one.

The Bloomreach Commerce Experience Cloud helps Shift7 in its mission to build a best-in-class e-commerce experience. Paired with Shift7’s thoughtful website design, Bloomreach’s Content, Discovery, and Engagement pillars unite the disjointed steps of the customer journey by implementing a unified solution with full-site personalization capabilities.

For a good example of this unified solution in action, take a look at Global Industrial, a leading national distributor of industrial products and MRO supplies. This B2B client, recently exemplified in a Shift7 case study, combined Bloomreach’s Discovery and Content platforms with Shift7’s site design to take their e-commerce strategy to the next level.

Aside from optimizing their website for product search, Global Industrial’s main intent with the project was to invest in a headless CMS system. With it, they created The Knowledge Center, a content-rich resource designed to empower customers with expert advice on the topics they need to scale and succeed.

“The launch of The Knowledge Center highlights the product knowledge, expertise, and solutions we deliver every day to our customers,” revealed Barry Litwin, CEO of Global Industrial. “This new customer resource will help us further our ‘Accelerating the Customer Experience’ (ACE) strategy, and is part of our efforts to redefine the B2B e-commerce experience and strengthen our position as an indispensable business partner.”

The Knowledge Center now delivers a cohesive user experience by connecting educational content to related product categories on Global Industrial’s website. The result serves over 25 consumer segments with rich, engaging, and AI-driven content, offering value to them as customers and building upon their brand loyalty. Read more about Global Industrial’s win with Bloomreach and Shift7 Digital, and contact us for a commitment-free demo if you’d like to explore similar options for your business.

This article was written in collaboration with our partners at Bloomreach.