APICS is the premier professional association for supply chain management.

Gearing Up for Omnichannel Commerce

By Sean Cook |   2014 | 9 | 6

This is a great time to be a consumer. Ours is a world of total access and instant gratification. We are connected everywhere, all the time—whether in a store, on a laptop, watching TV with a tablet in your hands, or perhaps using the brand new Amazon Fire phone. Specifically designed for shopping, one can point the Fire’s camera at just about any product, and the phone will identify the item and sell it to the user almost instantly. With technologies such as this one, it’s no wonder that some industry experts believe mobile devices may become greater resources than salespeople.

Since e-commerce emerged in the mid 1990s, it has been increasing exponentially. Many companies serving this huge market are business-to-business (B2B) manufacturers that are being led toward multi-channel selling by their omnichannel customers. With a new customer expectation for seamless commerce, convenience, value, and personalization, the success of such organizations will be determined by how well they integrate their supply chains with their e-commerce businesses.

Understanding omnichannel

Omnichannel, the evolution of multi-channel retailing, makes shopping available through online and offline channels and devices. Consumers demand omnichannel support from first consideration to final sale. They have low thresholds for frustration when it comes to search, navigation, ordering, and tracking and have come to expect a custom-made total shopping experience. As a result, support for omnichannel shopping has become a competitive differentiator among brands—not just who can deliver the best product, but who can offer the best user buying experience.

Unfortunately, manufacturers historically have been behind the curve in terms of customer experience. Many B2B manufacturers still use only live service channels for procurement, even if these experiences require significantly more time and effort. And many individuals still thumb through a printed catalog, pick up a phone to place an order, and truly enjoy their relationship with the sales rep at the other end of the line. However, the work styles of these B2B holdouts don’t match the habits of today’s consumer. According to Forrester Research, nearly 50 percent of B2B companies selling online expect that half or more of their total customer base will be buying online from them within three years. As younger, more online-savvy B2B customers replace older B2B customers with a preference for offline buying, the shift will only accelerate.

Some manufacturers are responding. Job titles are emerging, such as director of customer experience and chief customer officer. Brands and manufacturers are leveraging all possible buying paths and opening up new revenue streams. The number of B2B customers and websites are increasing dramatically. Meanwhile, traditional sales channels are undergoing radical transformation. The ecosystem has become hyper-connected, and the B2B sales channels increasingly overlap with

  • manufacturers selling products directly to consumers
  • manufacturers entering the distribution space (by selling online)
  • distributors, under increasing pressure from all sides, entering the manufacturing space (by selling private-label products)
  • manufacturers and distributors selling products on marketplaces and portals to other businesses
  • consumer companies that have mastered the art of selling across channels and fulfilling in the new hyper-connected model that supports distributor accounts and selling direct to businesses.

Considering self-service

Amidst all this chaos, B2B influence and buying channels are becoming more diffuse and fragmented. In response to this, some companies are choosing to provide more self-service opportunities for their customers. By automating processes and connecting omnichannel capabilities to their supply chains, many find that they can more affordably address direct customer buying. Online self-service also enables a business to maintain relationships with low-volume purchasers more affordably and to spend less time on tasks such as basic reordering. This can free up salespeople to spend time building relationships, prospecting, or pursuing other higher-value activities.

B2B buyers respond positively to self service for many reasons. Some benefits include greater interaction efficiency, customer satisfaction over being more in control, the ability to fit the customer’s schedule, avoiding the potential of high-pressure sales tactics, and the reduced importance of the “relationship” over the “experience.”

The inventory management piece

Consumer expectations for omnichannel also are raising the bar for fulfillment. B2B shoppers are accustomed to rapid, if not free, shipping and faultless inventory and delivery information. A key challenge for manufacturers will be providing a clear picture of inventory requirements across the enterprise. B2B sellers are expected to ship from anywhere, enable in-store pick-up of online orders, and accept returns anywhere. As such, fulfilling omnichannel customer orders demands that every warehouse, distribution center, and retail location is a component of a single, tightly integrated, enterprise-wide inventory.

Even companies with a great deal of experience in retail and wholesale channels often underestimate how difficult it is to efficiently fulfill customer demand from any location and any channel. Successful retailers have made the commitment to ensuring superior order management is in place to align their channels of commerce and provide a consistent brand experience across all customer channels. B2B manufacturers must adopt the same philosophy.

Learn all you can

There are many challenges facing manufacturers as they adopt an omnichannel strategy. Critical factors include organizational preparedness, technology synchronization, and competition from previously unseen players. To succeed, supply chain professionals should educate themselves about e-commerce as much as possible—sooner rather than later.

Sean Cook is cofounder and CEO of ShopVisible and author of Evolving Commerce. He may be contacted at seanc@shopvisible.com.

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