InRiver: B2B digital commerce in manufacturing
A year of disruption…
For the manufacturing sector, the market is ever changing. And while changing customer needs, changing process standards, and changing product demands is nothing more than familiar territory for the industry, “the scale and speed of the change has skyrocketed in recent months and looks to become business as usual going forward,” says in its ‘’ report.
Coupled with external pressures such as political and economic factors, as well as the significant technological shifts that are happening internally within manufacturing, InRiver states that it should be expected that manufacturers will “play a big role in building a better future via sustainability and eco-practices,” and develop “innovative ways of going to market and raises expectations for the customer experience.”
Responding to the industry’s challenges
To better understand the pressures affecting B2B manufacturers, as well as the progress being made in digital commerce and what the most promising routes for future improvements are, InRiver surveyed - in partnership with Vanson Bourne - 200 marketing decision makers in manufacturing in the US, UK, and Germany.
“In what they told us, we found clear areas where manufacturers across the board are unanimous in their outlook. 96% of those surveyed, for example, reported that their organisation now must get products to market faster than it did last year due to the current market situation. Regardless of what they produce, the reality of the pandemic and political upheaval has meant tighter margins and more urgency for manufacturers.”
Digital growth and global challenges
When it comes to international and digital marketing success, InRiver discovered a universal degree of confidence, with 90% agreed that their sales and marketing efforts are successful beyond local markets, and 92% agreed they can quickly update their product information in reaction to changing needs.
In addition, when it comes to more complex digital processes 82% agreed that they can easily identify which product information is affecting sales, with 90% increasingly automating the product information process.
Why is this?
InRiver believes that this enthusiasm could be coming from the industry as a whole becoming more international and digitalised (59% of respondents said they have introduced new product information technology in the last year.)
Other incentives could be the increased pressure to stay competitive, “22% said they are facing ‘significantly more’ competition than they were a year ago. 88% agreed that they have changed their business model, and 96% said that they need to go to market faster due to current market conditions.”
New channels and greater flexibility
“Businesses are moving fast on using innovative technology, rich media, and new channels to bring products to market. None of our respondents said that they are currently working with the same stack of tools for managing product information they were three years ago,” says InRiver.
As production information grows in complexity, so has the use of technology such as automation and artificial intelligence (AI). 90% of respondents agreed that the automation of product information tasks has increased, as well as 94% reportedly using automation and AI to tailor product information for different channels.
Unsurprisingly, those that are leading the way for such technology adoption are the larger organisations, with 98% of organisations with over US$250mn in revenue are using AI and automation, compared to 70% of organisations with less than US$250mn in revenue.
Accurate information and rapid delivery
“The manufacturing industry underpins the world economy: without it, nothing else works. It is hardly surprising, then, that as the world at large accelerates, manufacturers are feeling the pressure to keep pace,” reflects InRiver.
When respondents were asked the three biggest challenges when launching a new product, gathering product information was a popular choice, however at the top of the list 65% stated ‘beating a competitor to market’ was the biggest challenge.
Other significant challenges included:
- The time it takes to create and update product information (51%), with 47% identify that they spend between one and six months on product information when entering a new market or channel
- Product information problems cause delays or product withdrawals (63%
- Customer dissatisfaction because they can’t self-service (51% and 64% in machinery manufacturing)
Customer insights and clearer communication
“While many of the organisations in this survey are finding real success in improving conversion rates with rich product information like videos, these are not one-size-fits-all solutions,” states InRiver.
When asked what would improve their conversion rates the most, respondents identified “knowing what customers expect and how the business stacks up against competitors in this regard” was identified as a top-three priority for 57% and number-one for 21%.
A clear competitive differentiator identified by respondents is trust. , “49% of our respondents agreed that customers are often dissatisfied by products not being as expected. 52% agreed that they lose repeat customers for the same reason.”
Improving trust in products was identified as one of the biggest drivers for maximising conversion rates (28%), which was just ahead of helping people to better see and experience the product.
IMF: Variants Can Still Hurt Manufacturing Recovery
After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022.
Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery.
Lingering Concerns Over COVID
Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high.
Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery?
IMF: Current Boom Could Falter
Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”.
Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”.
Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.