We were recently asked by the trade journal acquisa why more and more B2B companies are heading in the direction of direct sales (e.g. via e-commerce) - even those that have worked with indirect partners for decades. This often leads to major problems. For example, with pricing, when the goods are suddenly offered cheaper in your own online shop.
Editorial staff acquisa:
Why are some companies even switching to direct sales?
Mischa Wolfframm/communicode:
In many sectors, consumers expect direct sales from manufacturers. In any case, the manufacturer is one of the first points of contact for obtaining information as part of the customer journey. Here he not only expects the best first-hand information, but also the direct purchase option from the brand or product he trusts. If these features are missing, this irritates the consumer and makes the brand unbelievable and ultimately interchangeable. Direct sales, in turn, enables companies to have the “direct line to the customer” that is important today, which promises more customer insights, more brand loyalty, reputation and profit margins. Furthermore, manufacturers can - far more and better than retailers - implement new and unique content, shopping, service and support, as well as product experiences, which additionally increase brand attractiveness and awareness and offer opportunities to stand out from others. This starts, for example, with personalized products and product configurators and does not end with augmented shopping and curated shopping.
Editorial staff acquisa:
Where are the problems? A) For the companies themselves? B) For the partners?
Mischa Wolfframm/communicode:
Of course, companies need to make necessary adjustments to processes and the organizational infrastructure. Some manufacturing companies also have little experience in direct customer contact - but there are also service providers like us who actively support companies in these areas with advice and technology. In many cases, of course, sales partners are not enthusiastic when manufacturers set up their own direct sales and fear a decline in sales of the manufacturer's products. On the other hand, the additional associated marketing and the option to buy directly from the manufacturer could also encourage purchases via other channels, because ultimately the price and a large selection of different brands within a shop are also decisive for the consumer. In any case, integration into the overall strategy and a high level of communication skills and transparency between both parties are required in order to benefit from these steps for everyone involved.
Editorial staff acquisa:
What consequences does the orientation towards direct sales have for the company?
Mischa Wolfframm/communicode:
In many cases, manufacturing companies already have to have their product and marketing information under control for their sales partners, which often means that this information is no longer unique via the channels and thus offers little added value for the consumer. This is where the manufacturing companies should start with product information management first. The necessary own advertising is also made considerably easier from the ground up and further corporate decisions and orientations are made possible - for example the gradual international orientation in several languages. Changes in delivery logistics, such as smaller delivery sizes and higher turnover, are also consequences that the company has to adjust to.
Editorial staff acquisa:
How do companies approach such projects? What do you have to pay attention to etc.
Mischa Wolfframm/communicode:
Companies should set themselves realistic goals in stages. It's better to implement big ideas in smaller steps and not get distracted along the way. The route is the goal. So that the path does not become an obstacle course for the entire company, operating concepts must be set up and processes defined. Full-time internal resources need to be allocated and involved users need to be trained on the new processes and software. Then, of course, the appropriate selection of service providers and systems is also an important point.
Editorial staff acquisa:
Do you see this trend increasing in the future?
Mischa Wolfframm/communicode:
Yes. Brand companies recognize the need to gain more control over customer information, product data, processes and channels as part of their own digital transformation and to strive for more. The sooner the better. At some point, the learning curve will become too steep for the company.