Manufacturing: Why e-commerce and D2C are key to sustainable growth

Manufacturing companies and their partners find themselves in an agile, fast-paced, and very uncertain time. The commerce space has changed a lot in recent months and has grown exponentially in the online area. The industry was turned upside down overnight, had to quickly adapt to  new consumer demands and was faced with many challenges – as well as new opportunities for growth.

Source: McKinsey

How can we meet the needs of our customers?

Consumer behavior has changed dramatically over the last few decades, and rapidly in the last 30 months. Today's customers expect a direct, frictionless, and personal approach - whether offline or online. Seamless and consistent experiences drive conversions, encourage repeat business, and increase loyalty. This is not only true for B2C customers, but also for B2B customers.

According to a study by PWC, 32% of all customers would no longer do business with a brand after a bad experience. For this reason, it is important to seek continuous dialog with customers, to invite them to share their opinions and experiences, and to use these findings to constantly improve the customer experience and your brand’s products.  Brands must focus on understanding their customers and their personal interests, and they must do so today.

Personalization done right

Make the ordering process transparent

Transparency is also very important. Today’s customers want to be kept informed about the status of their order after the purchase and during shipping. Your returns policy should also be uncomplicated. Customers want to feel valued and understood before, during, and after the purchase, only then will they become fans of a brand and recommend it to others.  

The manufacturing industry needs to focus on three key strategies to drive growth:

#1 Go-to-market strategies with B2B and D2C (Direct to Consumer) in mind

The manufacturing industry is always experiencing changes in its evolution and needs to respond to them by adapting and expanding their marketing strategies. I see that recently companies are focusing more and more on two issues. On the one hand, B2B commerce is experiencing a push toward having its own marketplace to better communicate with partner companies and distributors to increase profits. On the other hand, we see more e-commerce solutions being used by manufacturers to sell directly to consumers (D2C) in order to benefit directly from the sales.

#2 Involve and support customers

When customers get the information and content that is relevant to them and delivered at the right moment, they are happy customers. One area of the business that has a powerful influence here is service and support. When you provide customers with personalized support and targeted content to answer their questions, you reduce wait times and frustration. Think about a login-protected customer area on your website or portal, where you can serve your customers in a fast and convenient way. The search experience and associated search time for the right content is crucial here.

#3 Automation and Artificial Intelligence (AI)

Speed in every interaction is important, whether you are in direct contact with customers or in the B2B landscape. When customers have problems with products or services, they need a quick and straightforward solution. Artificial intelligence (AI) and automation can help solve customers' problems faster. For example, if you offer them a search that uses AI and machine learning (ML) to identify intent and provide suggestions of relevant content. Solutions such as bots and virtual agents can also take the pressure off service agents and narrow down a possible answer so that agents have a deeper understanding of the query. 

The pandemic has permanently changed online buying behavior across all age groups. According to a study by KPMG, younger target groups have changed their behavior much more than older generations. Studies show that hybrid customer experiences improve the entire customer journey and will be one of the foundations for growth in the near future in order to meet the needs of all age groups.

What are the challenges facing the manufacturing industry?

Many manufacturing companies that did not have a solution for e-commerce and Direct to Consumer (D2C) during the pandemic had to quickly implement solutions and create a direct-to-consumer (D2C) sales channel. From today's perspective, this decision was crucial to ensuring their survival. No question, these "quick" solutions were and are fit for purpose. But how sustainable are these implementations, which were literally plucked out of the ground, and how well do you really know your customers? These are questions that companies must honestly ask themselves if they want to continue to increase economic growth via e-commerce. 

The benefits of D2C

D2C helps you:

• Better understand your customers
• Measure performance
• Adopt an omnichannel approach
• Get faster and more direct feedback on your products

Putting the customer at the center of your strategy

Customer centricity is key to all commerce approaches and the basis of all successful strategies. Firstly, you will need to unify all customer data that is scattered throughout your organization. The next step is analyzing and harmonizing this data so that it can be actioned.  It is also important to consider whether customers have given their consent to use their data— and in light of Google’s plan to phase out third-party cookies, you will need to prioritize first-party data.

Have you ever had a situation where you wanted to implement a campaign at short notice, but by the time you had gathered the relevant customer data, completed the segmentation process, and prepared the content, the right moment to play it out as a “real time experience” had unfortunately already passed? The good news is there are platforms that can help you achieve your goals in a sustainable way, while increasing economic growth, and productivity.

How can you put the customer first and build up or further strengthen your e-commerce results?

You need a vision and full support from the executive management team to realize your strategy. Question your processes and the organizational areas and teams involved — not to save costs on personnel, but to understand whether the different departments and teams are working together and talking to each other in the best possible way. 

• Do the different goals flow into a holistic organization-wide strategy?
• Do you have the right technologies in place today? Do they match your strategy for the coming years? 
• Are your current technologies ready to support SaaS (Software as a Service)?  To ensure your business is future-proof, you will likely need to embrace a composable DXP strategy.
• Do you have all the customer data you need analyzed and at your fingertips when you need it? 
• What about first-party data? When it comes to customer data, and with Google's announcement that it will no longer support third-party cookies, you need to adapt your strategy towards "first party data" in order to continue to deliver the experiences your customers expect.
• What about delivering exceptional customer experiences and achieving customer centricity? In the future, you can only achieve these with customer data. With the elimination of third-party data, you will have to collect it on your own, for example through browser or app behavior. 

The role of the CDP

А Smart Hub Customer Data Platform (CDP) helps you to put the customer first and deliver your strategy. Once a CDP is in place, you can add personalization, recommendations, and testing to offer your customers the next best action or offer. Only with this type of foundation can your e-commerce channel continue to grow and prosper in the future.

Which e-commerce solution is the right one and what are the benefits?

In the manufacturing industry, there are many different use cases and target groups. On the one hand there is the classic, usually more complex, B2B business via distributors with many positive aspects, but with the disadvantages of not knowing who you are selling to, prices are harder to control and getting feedback on your own products is also difficult. In addition, the data delivery of product information to merchants can often be extensive and time consuming.

B2C and D2C are still new concepts for some companies— with a steep learning curve and a continuous need for optimization. The difference between B2C and D2C, explained in simple terms, is that in B2C goods and services are sold to the end customer and in D2C orders are processed and delivered directly. As a D2C company, you can make more revenue and pass the savings on to your customers.

Serving both cases (B2B and B2C) well at the same time often takes a lot of effort and energy — that’s before we even consider B2B2C or B2X. Maybe you as a manufacturing company are currently operating B2B, B2C, and D2C - maybe you are already toying with the idea of establishing a marketplace. You will need the right tools to drive your vision forward.

Keep an eye on how well customers can search for and find your products in your stores. A visual "search experience", which recognizes the "intent" of the searcher and offers appropriate suggestions and personalized recommendations by means of AI, will set you apart from your competition. This can maximize sales, increase average shopping cart spend and improve cross-sell, as well as up-sell opportunities.

Build or buy?

When considering the right strategy, you will need to decide whether to "build" or "buy." As consumer behavior is constantly changing, you need a flexible platform based on microservices. Seasonal scaling and speed of the applications are as important as a fast and uncomplicated provision of new functions via APIs. Developers must be able to use these quickly and without much effort, in order to be able to react just as quickly to the needs of the market and their own requirements.

A flexible approach with headless commerce

If you want to map different e-commerce strategies such as B2B and B2C, headless commerce is the right approach. This is the only way to implement them successfully, within a single platform with different user interfaces. But it's not just the front end that has to be lightning fast and designed for different use cases. Just as important is how flexible the backend can be adapted for all your requirements. You will then need to consider whether it is easier to configure and further develop a supplied frontend or to build a modern frontend yourself in the sense of the API economy.

Why choose a composable solution?

Building a bespoke solution is definitely the way to go at least since the introduction of MACH technology and especially in the e-commerce area. As the person responsible for e-commerce, marketing, and IT, you are the composer and conductor and have the task of harmonizing all the individual disciplines that are necessary for success. A composable DXP gives you the freedom to combine functional capabilities from a single source, and where it makes sense, to link technologies across vendors—today's DXP solutions are designed to be "good neighbors" in their existing solution environment, meaning they integrate seamlessly with your existing tech stack. 

Benefits of using a composable digital experience platform:

• Market-leading e-commerce platform
  Combine flexible e-commerce processes with scalable personalized shopping experiences that resonate, persuade, and convert.
• 360° customer insights like never before
  Build your 360° customer profile based on website behavior and other data sources. Leverage anonymous insights or a deep customer view for customized and targeted experiences.
• Hyper-personalization
  Deliver personalized experiences to engage and delight customers. Optimize goals and business growth with each new experience. Benefit from faster time-to-market in your marketing communications.
• Omnichannel management throughout the customer journey
  Create memorable experiences and communicate consistently with your customers across all channels and touch points.
• Centralized digital asset management (content hub)
  Manage all your digital content in a single place and enable it for personalization and omnichannel delivery. Don't waste time searching for the right content. 

Find out more about how manufacturers can deliver value to every buyer — visit our Manufacturing page.