Manufacturers eCommerce Playbook
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It amazes me how so many manufacturers have not figured out how to leverage eCommerce to grow their business. Many of them are still scared about hurting their distributor and retailer relationships, or losing sales people so they just keep their head in the sand. However, if you look at the top manufacturers & brands, companies like Apple, Nike, and many others have a strong eCommerce website and heavily sell direct to consumer. Selling direct to consumer is the most efficient way to maximize profit, and thus companies that figure this out will be most successful and profitable.
I strongly believe that the manufacturers that keep their head in the sand and don’t innovate with eCommerce will eventually suffer or literally die out to competitors who do. The fact of the matter is that buyers want ease of use. Whether you are a franchise owner or 18-year-old consumer, buyers want to be able to buy easily, and eCommerce offers that.
If you run your business in fear of innovation killing your existing sales you will most likely struggle to grow. No business that runs itself and makes decisions based on fear of losing distributors and retailers or losing sales people to eCommerce will grow easily in the increasingly digital 21st century.
Thus, I think it is imperative manufacturers invest in eCommerce for either automating business to business purchases or direct to consumer purchases. Yes, you can sell to retailers or Amazon and give up huge margins to sell to customers, but you can also build the infrastructure yourself to go directly to the consumers.
I think a great example of this is Casper. You can find them in other places like Amazon, but their site is the best place to buy and is really easy to use.
- Invest in a scalable B2B eCommerce platform that can also handle B2C: You need an eCommerce platform that can handle direct to consumer sales and B2B sales to distributors or retailers. Probably the best way to do this is to leverage Magento which is a very cost effective Enterprise grade B2B and B2C eCommerce platform in one software. This is the only way to scale operations. Having people manually take orders over the phone is not an efficient use of man power. This can, in almost all cases, be automated, with the exception of very large complex sales. However, even those will soon be automated more and more with eCommerce. Even Tesla is handling major sales online and even houses are becoming available to be purchased online.
- Invest in a great design: As the manufacturer, you are the original brand of your products. Yes, most people might buy them at Walmart or Amazon, or some other channel, however when they come to your site, they should see a design that makes them want your products. In 2017, people judge design quickly and can tell if you cheaped on a bad design, potentially costing you sales. You don’t really need to reinvent the wheel here. There are plenty of high-quality designs, templates, and ideas you can find online to create a great design for your brand.
- Integrate with your ERP & Back Office Systems: This can get expensive if there is not a pre-built connection with your eCommerce platform. Thus, if you need to save money, perhaps look into a solution that has a prebuilt option like an extension or third party middleware integration platform. However, if you can afford it, invest in the custom integration that leverages something like JitterBit or Mulesoft.
- Invest In High-Quality Product Data: A site without high-quality product data will not sell. Why do people buy in store? They can touch and see the product and learn as much as possible about it compared to buying online. Having high-quality product data such as videos, images, technical data sheets, etc, offers the closest thing to that. I would also look into a system like Salsify or Sales Layer to manage such data.
- Shipping, Shipping & Shipping: Shipping is incredibly important and Amazon has made the status quo two days at no cost. Ideally, you want to get shipping to be zero to the customer, even if that means raising your product prices without killing your competitive advantage on price. I would try and have shipping options that are both effective and fast, perhaps offering multiple options such as flat rate, pick up in store, multiple carriers, and even freight if necessary.
- Order Tracking & Returns: Customers should be able to easily login and track their orders as well as return and print shipping labels for returns if possible. If they are concerned they won’t know where their order is, or that they can’t return it if it isn’t what they want, they will certainly be less likely to buy.
- Go Omnichannel: Start selling everywhere. The best way to get more customers is to be everywhere. When a customer shops on Amazon you’re there, when they go to Walmart you are there, when they go online, they might find your website via Google or Facebook and buy directly from you. They can go to your stores in person if they need it right now too! Start leveraging solutions like Channel Advisor or Skubana to sell on marketplaces, in store, directly on your website, and at retailer locations.
- Reviews: People don’t trust products no one else has bought before. Thus, reviews, are the best way to show prospective customers other people have bought and enjoyed your products or services. Solutions like Yotpo can help make this a better experience.
- Reward Loyalty: Find ways to reward customers with a rewards program that is unified across channels if possible. Customers that come back for more should be rewarded via reduced pricing or other incentives. You can also leverage credit systems like Apruve that can act similarly to rewards.
- Personalize: There is a huge trend of personalizing products to your liking among manufacturers going direct to consumer. It’s impossible to manage these kinds of programs via an in store model, thus eCommerce is how companies like Nike and others are doing it. Although perhaps in the future you can go to a store, customize your product, and have it 3d printed on demand!
- Start Thinking Agile: Once you launch your new eCommerce site, you should be constantly improving your site and having a dev or staging site to make improvements. Ideally, you should have an infrastructure you can improve for years and years that will eventually look like an entirely new site with all the improvements you make each month. Notice how the big guys rarely completely redesign their site? It’s all minor improvements that eventually lead to a whole new site, that’s how it’s really done. Google has some great resources on design sprints to accomplish this.
- Strong Social Media and Branding: Manufacturers should strongly consider utilizing social media platforms to grow their brands. Facebook, Instagram, Twitter, LinkedIn, and Google+ are just the main platforms companies utilize because they can reach large audiences for a low cost and can build their brand quickly and efficiently.
Manufacturers doing it right:
I think Casper is one of the best examples because they are a new company that exploded due to their efficient direct to consumer business model. By manufacturing and selling directly to consumers, they are able to offer a competitive price to a premium mattress competing with more expensive brands like Beauty Rest and offer free shipping. This is a great example of what new manufacturers will start to do. Older manufacturers need to take a page from this book so they don’t get lost in the dust.
Of course, Nike is one of the biggest brands in the world and is obvious to point out but they truly mastered direct to consumer. They have an incredible website that makes you want to buy Nike shoes for 200 dollars. Who buys shoes for two hundred dollars! Well, Nike has found a way to make you want to by building an incredible shoe customizer experience.
Cuyana specializes in women’s clothing and accessories and is selling direct to consumer online. They do an amazing job of offering simplicity and quality online, as well as personalizing your products similar to Nike.
The 5th is an innovative new watch company that sells directly to consumers online. They are starting to sell other accessories and items but mostly focus on watches. As an easily shipped item, they make buying a high-quality watch both affordable and easy.
Burton is the leader in snowboards and other snowboard-related gear and outdoor wear. They are synonyms with the idea of snow boarding due to their dominance in the category. You can easily go online and buy directly from Burton at a reasonable price making it an enticing offer to buy directly from them rather than a cheaper used offering.
There are many many more examples of other successful brands doing this. Identifying what other companies are doing to stay ahead of the curve with eCommerce as a manufacturer / brand may you help you catch up in the eCommerce world if you feel you have already fallen behind.
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