We are living in unprecedented times with never-before experience disruption in ecommerce. Governments worldwide are asking people to stay home, businesses are forced to change their business models, global supply chains are experiencing a bi-polar effect of too much inventory or too little inventory, marketplaces are dealing with third-party seller fulfillment challenges, and overall spending is down as consumers cut back spending. B2B ecommerce is witnessing a transformation. Merchants are coping with rapid shifts across every category that will define the “new normal” of consumer spending.
Consumers are expecting a long-lasting impact on their routines and finances. With brick-and-mortar shops rapidly moving online, it’s evident that COVID-19 has accelerated digital commerce transformation – and the pace will only increase. In fact, according to Forbes, there has been a 129% YoY growth of U.S. & Canadian ecommerce orders as of April 21, 2020. One of TA Digital’s clients realized more direct-to-consumer (DTC) sales by April 2020 than their entire 2019. An April 2020 McKinsey survey revealed that 40% to 60% of consumers intend to continue spending on digital and low-touchpoint solutions – the rapid shift to digital commerce will become permeant across all channels.
According to Forbes there has been a 129% YoY growth of U.S. & Canadian e-commerce orders as of April 21
Less discussed is the impact of COVID-19 on business-to-business (B2B) merchants who realize a need to reconsider the traditional selling approach to a more digitally focused buying experience. Equally challenging to B2B companies is that COVID-19 arrived as the traditional B2B strategy focused on building and maintaining personal relationships is being augmented with a digital-based approach.
During this time, B2B leaders must lead their organizations with a goal to maximize the inevitable economic rebound that comes with each economic downturn. According to a Harvard Business Review (HBR) article, slowdowns bring opportunities after a decline. Successful organizations act early or predict the decline, take a long-term perspective on growth (not just cost-cutting), and they focus on technological competitiveness through innovation.
To help address the current disruption see below, my top B2B recommendations:
It is critical that organizations embrace employees’ concerns and anxieties with a high-trust culture that will ensure long-term benefits and business growth. Top employers are ensuring their workforce is well protected with enhanced paid sick hours, extended paid-leave time, and increased communications with employees (e.g., weekly messages from the CEO, challenges to employees to boost morale, employee pulse surveys). It’s essential to have a communication strategy to reinforce transparency and foster trust.
Every company recognizes its long-term advantage resides with its employees and that employees are the most critical asset. The benefits to the long-term are apparent when considering the cost of turnover to an organization can be as much as twice the employee’s salary.
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It’s essential to recognize that buyers are dealing with difficult decisions and will need additional time across the buying cycle. Your goal is to ensure your current clients and customers remain engaged and healthy during the slower sale cycle. To ensure our clients’ needs are understood and to recognize we are living in unusual times, TA Digital created a service portfolio of COVID-19 offerings from a no-cost digital strategy for organizations needing to assess their digital ecosystem. On a need basis, we offered extended payment terms, quick-start accelerators and worked with our clients to manage unprecedented traffic loads on ecommerce sites.
Our goal is to deliver improved shopping experiences and demonstrate that we are an enduring partner to our clients and to help clients navigate COVID-19 successfully. For example, I’ve assisted a manufacturing company in strategies for improving their distributors to go from “bricks-to-clicks” to increase inventory turns.
Recognize that businesses are a vital component in helping society cope with COVID-19. From large to small, there is a role for private enterprises to contribute and affect positive change. A client of TA Digital donated hundreds of sewing machines directly to hospitals and organizations to help sew face masks, gowns, respirator covers, and other PPE (Personal Protective Equipment). It is helping consumers directly by providing sewing instructions, patterns, and videos for masks, mask covers, and gowns. Helping your community will only pay dividends in the long-run and demonstrates that everyone, including private enterprises, has a decisive role to play in combating COVID-19.
69% of US B2B buyers reducing spend said that they plan to return to previous budget allocations for software purchases
Digital Sales Strategy
B2B businesses should adopt a sound digital sales strategy. Enable sales teams to conduct business remotely and through digital means as much as possible. The shift to digital sales had already begun; however, COVID-19 is accelerating the transformation. Customers have taken control of the search and discovery process and will continue to expect a more B2C-oriented approach. More frequently, buyers are searching in a dual model (B2C and B2B) to learn about your product details and pricing. Consumers seek out reviews and listen to recommendations and advocacy from influencers rather than exclusively rely on business development.
The accelerated “new normal” includes sales teams collaborating with customers and potential customers across their digital buying journey focused on the buyer’s needs. Business development leaders must understand the buyer’s digital expectations and meet them as they interact across multiple touchpoints.
Solve The “Now Problem” brought by COVID-19
With COVID-19, many B2B businesses face supply chain challenges resulting in fluctuating delivery dates. Some brands deal with “second-tier” fulfillment and delivery regiments as the supply chain focus on critical COVID-19 related items.
To address the uncertainty, be transparent about inventory levels with out-of-stock notifications and lead times with realistic ship dates. Proactively communicate shipment dates or inventory changes to your buyers with direct emails and banner displays, ensuring your sales teams consistently communicate with their buyers. Simplify pricing schemes and shipping costs to reassure buyers that they are getting the most value during this crisis. Lastly, embrace a data-driven agile marketing approach and advertise across social media as more consumers are engaging social media platforms. Keep the advertisements tempered and compassionate to stay connected without the pressure of buying in uncertain times.
Consider expanding the sales channels. For example, a direct-to-consumer (DTC) strategy by connecting with customers through marketing & commerce content. With a DTC approach merchants can directly connect with shoppers and learn shopper behavior, sentiment, and trends that increase brand affinity and increase your customers’ lifetime value. Going DTC doesn’t cut out the “middleman”; instead, you share what you’ve learned about the shopper across all channels and provide unique offerings such as bundling or product personalization. An excellent example is food & beverage giant Pepsi launched two DTC sites, Snacks and Pantryshop, within 30-days. Also, going DTC could help distributors who don’t have a digital presence go from “bricks-to-clicks” to facilitate the shift to a new distribution model with shared inventory ala omnichannel.
Although not suitable for all B2B organizations, investigate if your company is the right fit to conduct a direct-to-store-delivery (DSD) model. The DSD model allows manufacturers to deliver products directly to the retail store without relying on traditional distribution networks that come with longer lead times. Organizations embracing the DSD model experience greater consumer insight, healthier margins, and a simplified quality supply chain. Regardless of the approach, B2B businesses should strengthen their connection with their core consumers without disrupting the relationship with their distribution network.
48% of manufacturers are racing to build Direct-to-Consumer channels, while almost all of them – 87% – see these channels as relevant to their products and consumers
According to The Forrester Wave B2B Commerce Suite, Q2 2020, B2B businesses seek simplicity, unity, efficiency, and choice from digital commerce platform suite vendors and headless vendors gain momentum as companies find solutions to manage the rapidly changing market. Best-in-breed “fit” commerce solutions are becoming the go-to strategy led by a headless API driven approach to meet buyers across the ever-changing customer journey. As the monolith all-in-one solution becomes too rigid to adjust to the evolving B2B customer journey, brands are rapidly shifting to a decoupled approach to adapt to the growing number of buyer touchpoints. The decoupled method separates the front-end (UI layer) and back-end (core commerce) systems. This approach allows for flexibility, customizations, ease of personalization based on personas, and quicker time-to-market.
Additionally, the best-in-breed approach allows businesses to optimize internal team efficiency with adaptive workflow focused on ease-of-use and simplicity. Leading B2B commerce suites embrace the value of headless commerce; for example, SAP released Spartacus, a free open source web application to create a customized branded storefront for SAP Commerce Cloud.
To quicken time-to-market and reduce total-cost-of-ownership (TCO), it is best to seek a pre-configured decoupled solution like The CommerceFactory.
Merchants must recover lost revenue, find operational efficiencies, and accelerate the digital transformation toward a direct-to-consumer and hybrid retail strategy across all channels. Expect consumers to become more digital adaptive as traditional “in-person” business shifts to online. To meet this paradigm shift, Brands should match the “new normal” post-COVID-19 with digital technology enabling the digital-first economy. The need for digital transformation will only accelerate as these trends continue. B2B & B2C ecommerce companies should formulate a post-pandemic strategy to quickly recover and accelerate out of the sales dip led by a variety of new approaches including moving to a digital sales first strategy, embracing new digital channels to boost customer experience and transform their technology suite to meet consumers shifting digital buying exclusively.
Merchants must recover lost revenue, find operational efficiencies, and accelerate the digital transformation toward a direct-to-consumer and hybrid retail strategy across all channels
At TA Digital, we take a consultative approach to helping digital commerce professionals lead transformation through this unprecedented shift to digital commerce. Our TA Digital commerce consultants are industry experts at building and deploying content-driven commerce solutions in a decoupled, headless approach.
To stay informed, see Salesforce highlights on how organizations are transforming their business into the “new normal”. Focus on brand awareness, identify, sentiment, and overall engagement. For additional insight, read TA Digital’s blog “10 Digital Commerce Strategies to prepare for the Post-Pandemic World”.
Joe Brannon is Vice President, Global Commerce Practice at TA Digital, and faculty member at the University of Washington & University of California. He holds an MBA in Technology Management and a Bachelor of Science in Business Systems (MIS) from the University of North Carolina. He specializes in digital commerce, value-chain, marketing, and merchandising strategies. Joe has helped fortune 500 companies (Abbott, Billabong, Bose, Oakley, Singer, and Starbucks) realize their digital commerce strategies. As an influencer, Joe has authored numerous articles and presented to multiple large audiences on commerce and delivery excellence globally. When he’s not leading digital commerce transformations, Joe loves to travel, watersports, organic gardening, and enjoying time with his wife, Tanya, and his three children.
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According to a recent research, 83% of US consumers have made a purchase on Amazon in the last six months. More shoppers than ever before are choosing ecommerce. Retail has gone online, and ecommerce has forever changed the buying behavior of customers across the globe.
Joseph Brannon 25 min read