Economic uncertainty is accelerating the adoption of e-commerce in the manufacturing industry. A new study by Sana Commerce shows that the share of sales from online sales channels is already 50 percent. However, many manufacturers still have difficulties with the change.
E-commerce used to be seen as an additional sales channel; now, it is an absolute must for manufacturers. These are the results of a study on e-commerce in the manufacturing industry, which has now been published by Sana Commerce, provider of an e-commerce platform for SAP and Microsoft Dynamics. Of the manufacturing companies surveyed, 98 percent said they sell through e-commerce or plan to do so shortly.
That is 14 percent more than in 2017. This shift to e-commerce is not surprising because the study further shows that fifty percent of sales are generated through the webshop. This is especially true for large companies with more than a thousand employees (54 percent sales). In smaller companies with fewer than 250 employees, the figure is 38 percent.
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Manufacturing industry: Rapid increase in the use of online marketplaces
The economic uncertainty has caused most manufacturers to change their market strategy and take a step towards direct sales. The study found that 94 percent of respondents change their market strategy due to economic uncertainty. In 2020, 63 percent sold their products through their online shop, 17 percent more than in 2017 and 29 percent more than in 2015. Manufacturers also used online marketplaces as a sales model more frequently in 2020: 37 percent more than in 2017.
E-commerce challenges in the manufacturing industry are affecting the buying experience
Despite the considerable benefits, respondents to the survey stated that they were faced with several challenges, in particular handling complex ordering processes (36 percent), directing traffic to online channels (35 percent), and hesitant customer acceptance (34 percent) Percent) and internal resistance to e-commerce (33 percent).
“Today, manufacturers know that they have to be represented online. Covid-19 was the catalyst for a trend that has been emerging in this area for years,” says Tim Beyer, Managing Director at Sana Commerce North America. “However, B2B e-commerce is complex, and many manufacturers haven’t given much thought to how old business practices need to change.”
Bad buying experiences have a direct impact on sales
According to the survey, a bad online shopping experience directly impacts manufacturers’ economic figures. Fifty-six percent of those surveyed stated that customer service inquiries are increasing significantly, and in large organizations, the figure is as high as 65 percent. In addition, 46 percent said that customers would not come back and order again.
“Manufacturers who are not investing in their e-commerce solutions now and looking for ways to improve their buying experience are undoubtedly jeopardizing the relationship with the customer. One of the main reasons manufacturers are spending more budget on building online sales channels is customers’ changing needs. Therefore, when further developing the online experience, it is essential to take the customer’s needs into account,” explains Michiel Schipperus, CEO of Sana Commerce.
“Research and discussions with our customers show that manufacturers are struggling to create the right e-commerce experience, which leads to more flawed customer relationships and lost sales. To prevent this, manufacturers must integrate their ERP with the webshop. The information from the ERP and the possibilities it offers are indispensable for an optimal shopping experience, better acceptance of the webshop, and ultimately for a better customer relationship. ”
Manufacturing companies are investing in a better online shopping experience
36 percent of manufacturers invested in a new e-commerce solution to meet these challenges, and 35 percent increased staff and resources to strengthen online channels and improve the shopping experience. In response to these challenges, 56 percent of respondents said they had optimized their personalized online experiences and invested in improving customer adoption for online channels.
55 percent of respondents say that they trained their sales team to convince customers to buy online; 49 percent created incentives for customers to order online, and 55 percent have set up an in-house e-commerce team. Only 39 percent of those surveyed invested in marketing activities (SEA, e-mail, and SEO) to increase acceptance and sales.
“It is clear from this study that manufacturers are taking the necessary steps to take advantage of the online presence. But progress still has to be made to exploit all the advantages of e-commerce fully,” concludes Tim Beyer.
Founded in 2007 and headquartered in Rotterdam, the Netherlands, Sana Commerce is a provider of an e-commerce platform that supports manufacturers, distributors, and wholesalers in promoting long-lasting and reliable customer relationships. Sana Commerce is a certified SAP and Microsoft Gold partner supported by a robust global partner network.