E-commerce in B2B markets – fundamental change for business
Online shopping has triggered profound structural change in consumer goods markets and has fundamentally altered customer purchasing behaviour. A similar development is under way in business customer markets. What does e-commerce mean for procurement in the industrial sector? E-business expert Thomas Lang discusses the opportunities and challenges.
Mr Lang, what are the benefits of e-commerce for decision-makers and purchasing managers in companies?
Interaction with suppliers can take place around the clock, 365 days a year. This massively increases flexibility in procurement. Digitalisation gives the customer direct access to the latest information and data on product range, stock, availability, terms and conditions, etc. Another effect of digitalisation is that the customer is able to access design data and process it further in their own CAD systems.
How does e-commerce affect the structure of procurement markets?
By shifting market activity on to the internet, suppliers are suddenly up against competitors from all over the world, and the customers have total market transparency. Also, with market players acting as intermediaries, new forces are entering the market which further intensifies the competitive pressure on traditional sales and distribution companies.
How can the traditional, technically-oriented sales and distribution company hold its own under these conditions?
Besides expanding services and taking on logistics functions, sales and distribution companies must strengthen their presence in the digital space. They must present their competencies and their ability to provide solutions in a credible way on digital platforms and through the professional use of digital media. As in the private consumer sector, when procuring industrial products purchasing managers also
start by seeking out information on the internet and making preliminary decisions. Suppliers without a presence on the internet are not even in the running.
How does e-commerce in professional procurement differ from private online shopping?
The mechanisms are the same. Success factors in online business are transparency of the offer, cross-references to complementary offers, online advice and services and, last but not least, net prices. Market transparency also means price transparency. Market prices have long been the norm in online shopping. These will also become established in the B2B sector.
What does a technical sales and distribution company have to deal with when developing an e-commerce strategy?
It’s not just an IT project. It’s a change project initiated by the company management that affects the entire organisation. Gaining a foothold in the digital space requires a cultural change. Employees must acquire digital know-how and redefine their roles.
What does that mean specifically?
The office staff must develop new competencies in terms of consultation. For example, they must help customers to find their way around the digital space and they must learn to communicate professionally via electronic media. For field service staff, solution-oriented consulting is increasingly taking the place of selling focused on quickly closing the deal. The focus of their work becomes tailoring the customer dialogue for digital interaction.
Tablets are therefore increasingly being used in field service …
This only makes sense if the tablet isn’t simply used as an electronic order pad. It becomes a valuable tool if it is used as a portal for directly accessing all of the data and information relevant to the customer dialogue, and if it provides a clear overall picture of the client history.
How does a supplier develop a close relationship with customers in the digital world?
With digitalisation, there is a new quality to customer contact and it makes it more intensive. In addition to personal or telephone contact, dialogue occurs via a variety of touchpoints such as e-mail, chat, social media, etc. with the customer choosing the preferred form of communication.
The editorial team of Bachofen’s Digest asked the questions to Thomas Lang.
The company name Carpathia AG is taken from the legendary Cunard Line passenger ship which once sailed on the transatlantic route. Nomen est omen: For around seventeen years, Thomas Lang has been a strategically skilled helmsman, keeping companies on course during their journey through the digital world and successfully avoiding all the pitfalls.
Thomas Lang studied business administration and business informatics, spent three years in Los Angeles and, over a number of years, gained practical experience in online sales. In 2000, he founded Carpathia AG which specialises in digital business, e-commerce, omni-channel/cross-channel and digital transformation. He was ten years ahead of other companies which would follow his lead.
For Thomas Lang, digitalisation is not about yes or no, but about when and how. He encourages companies to change and invest in their digital futures, and does so according to the principle he himself also adheres to: «he who wants to reap must first sow».
E-commerce strategy at Bachofen: full speed ahead
With support from Carpathia AG, Bachofen set up an e-commerce strategy back in 2015, and this has been gradually implemented since 2016. By developing a comprehensive innovative online platform, the aim is to play an active role in the digitalisation of the industry sector and also to be an effective supply partner in the digital world. The first sub-project was successfully completed with the launch of the newly designed website in the autumn of 2016. The implementation of an up-to-date online shop solution is currently under way and will be available to customers before the end of 2017.
