With the ongoing trials of COVID-19 vaccines, governments continue to fight back the coronavirus outbreak with multiple measures to flatten the curve. Once the health care system copes with the pandemic, trade and commerce will evolve through serial disruptions across all business processes. It is truly an unprecedented instance as online sales witness an all-time high while closures for physical stores continue. Amazon stock surged about 70% percent since March 23, owing to higher sales. On the other hand, an estimated 15,000 brick and mortar stores are likely to go out of business while a considerable portion of temporarily closed stores might also meet the same fate.
Major changes in the customer behavior patterns, evolving situations in the supply chains, and liquidity force businesses to change their operating models completely. This article addresses the SMB organizations’ concerns in the B2B eCommerce sector, focussing on the brick and mortar stores. We will also discuss the challenges in reopenings and how technology can play an essential role in pivoting the industry. Buckle up to explore how you can steer your business amidst pandemic waves towards new horizons:
Short Term Measures to Handle the COVID-19 Effects on B2B Commerce
It is necessary to take measures to help you solve the existing bottlenecks with the infrastructure and workforce available to you in the short term. Here, we are listing the four most accessible approaches for containing the backlashes arising out of the prevalent situations:
- Maintain Hygiene and Disinfection Measures: Whether you are a brick and mortar store or an existing eCommerce store, the first step should be to maintain the hygiene and disinfection measures recommended by medical bodies and your local government. For items like food products and medicines, you should provide the relevant studies from trustworthy authorities to your customers in case of typical products. If you are a physical store planning to move online or an existing web-based store, you should mark their safety measures for consumption on your website. Sending out a clear message regarding the hygiene and disinfection measures makes the purchase decisions prompt.
- Convey Stock Availability Properly: Naturally, all items won’t be in stock, and replenishment rates will differ as compared to the past. Make it a point to accurately convey the stock availability to your customers and let them know if a product isn’t going to come on the shelves any time soon. This will also result in lesser customer conflicts and help save time for both parties. In the latter portion of the article, we will also discuss how to convert stockouts into sales opportunities through upselling and cross-selling.
- Community Approach to Fulfillment: Most of the B2B products are used in combination with other suppliers’ items. If possible, try to pool resources with the providers of items used with your products. This will also decrease your dependency on current third party logistics to some extent.
- Keep the Customers in Loop: Keeping your customers in the loop is extremely important for all the previously committed sales and the orders you are taking at the moment as backorders. In case of any change in the situation, keep your clients informed to continue enjoying their trust.
COVID-19 Implications for B2B Commerce in The Long Term
For B2B eCommerce, the situation is extremely challenging. Many producers hold large amounts of raw materials, vendors continue to run short of inventory, and stores sit on huge piles of unsold stocks. With these circumstances adding pressure to the already estranged supply chain dynamics, the entire B2B eCommerce ecosystem is witnessing an unparalleled transformation. The following factors will play a vital role in transcending the industry:
Customers Will Have New Value Systems
Despite the arising situations like unemployment and cash crunches, the customer sentiment will shift from discounts towards factors like reliability and value additions. Extending additional benefits in the worst affected areas and prioritizing your stock’s delivery will receive a positive reception. Supporting the community initiatives, providing convenient return options, and accepting delayed payments/ payment in installments will help your brand adjust according to the new customer values. In the longer run, these aspects will have a significant impact on brand loyalty for physical stores. For instance, if you don’t have your product available, recommending or even helping in getting it’s alternative from your competitors will improve your reputation as a brand contrary to the old scenario.
Repurposing and Mobilizing Employees for New B2B Environment
Downsizing the workforce can have many long-lasting negative impacts on your organization. Repurposing and mobilizing your existing human resources for the new B2B environment will prove to be more rewarding in the future. This will also require businesses to restructure their organization and carry out skill enhancement drives. For instance, the trade exhibition industry can benefit from using AR/ VR solutions aggressively. This will require them to train their sales representatives to use such sales applications instead of conventional methods.
Learning and development activities will include provisions for ‘work from home’ policies. Adding a pandemic force majeure clause in service contracts will also become a new normal even for smaller firms.
Digital Sales Strategies Will Take the Front Seat
For the B2B sector, the digitalization drive will become even more aggressive. Brick and mortar stores will be required to digitize their service base and expand their presence to new markets. People will prefer digital interactions over walk-in purchases for a considerable period.
Naturally, digital marketing activities will take the front seat. As the situation continues to challenge businesses, Instagram has also launched a marketplace for conventional stores in many new regions. With the increased number of sales channels, companies will be required to adapt better and advanced inventory control systems. Digitally enabled sales interactions are already the current sales for most businesses.
Channelizing the Flexibility of B2B eCommerce Supply Chain
One of the biggest changes for online B2B stores would be facilitating more options for order fulfillment. They will have to provide multiple delivery options for the same regions and integrate their online B2B stores with more web portals and payment options. Adding flexibility and resilience to the supply chains through channelized efforts will become a widespread exercise across the industry.
However, the major difference for B2B organizations would be the fact that the general sentiment is no longer with the globalization drive. Instead, people are looking forward to localization and even hyper localization of the products and services. To operate efficiently and reliably, businesses would require to make their operating model more dynamic and inclusive for localized operations. This would require them to make extensive use of local infrastructure, data centers, and employees and comply with new laws at the respective market locations. Insourcing might replace a large portion of outsourced activities.
How to Pivot Your Business for Reopening
We are halfway through the pandemic, and most of the surviving businesses have started the process of restructuring themselves. They are modifying their operating models and reinventing their product strategy. Have a look at the list of tactics that will help you in pivoting your business for reopening:
Improvise Your Existing Operating Model for COVID-19
Many healthcare, food, and nutrition sectors are witnessing an increase in sales while the luxury and lifestyle products are seeing a contraction. Depending upon your product lineup, you can add or remove items based on their purchases. Many retail stores are also converting their facilities into warehouses and distribution centers for eCommerce stores. Similarly, you can improve your existing operating model to accommodate additional revenue-generating streams or repurpose your infrastructure temporarily to maintain the flow of funds.
Another measure would be to streamline your returns and inventory management process to make abrupt changes in customer demand.
If you are currently operating through a physical store, only consider shifting to an online eCommerce store as soon as possible.
eCommerce integration providers will play a major role in the survival of brick and mortar stores. You can later switch to an omni-channel model. Moving your customers online should be your topmost priority.
Develop New Channels for Cushioning Business
In these unprecedented times, trying to find new customers isn’t a smart thing to do. Instead, you should develop new channels to provide a cushion for your existing customer base. This will require you to start new sales channels such as DTC (Direct to Customer), DTS (Direct To Store), DSD (Direct-To-Store-Delivery) models. Targeting repeat customers is always cheaper than finding new ones, and this will lower your lead acquisition and overall sales costs. You can divert peace funds into offering additional discounts, free delivery, or additional credit periods. These channels will also help you in running cross-selling and upselling activities. You can train your staff to offer additional products and recommend your customers to buy the optimal amount of goods to support your operations without losing sales.
Community and Innovation
Supporting the community initiatives in these testing times and interweaving innovation in your operating model will go a long distance. This includes repurposing all business processes and optimizing them for client engagement. Around 80 percent of the companies believe that they will experience COVID-19 led disruptions. A lot of businesses are planning to completely overhaul their product line up to keep up with the post-COVID-19 era. They are also adapting to new product designs and fulfillment models. AR/VR applications, drone-based deliveries, and contactless fulfillment are among the trending innovations.
Investment into Safety Measures for Protecting Your Staff and Customers
The hygiene precautions are also playing a major role in changing B2B dynamics. Sterilization has become a widespread practice to decontaminate any item as a precautionary measure, and shipping policies may also require disinfection measures as standard. On the other hand, this would mean that the production facilities and the workers working there would have to follow a new code of conduct repeatedly disinfecting themselves and the machinery. The logistics companies’ employees will need to ensure that the goods transported by them are not contaminated due to any physical or non-physical contact. Frequent health checkups and redesigning facilities for meeting cleanliness protocols will also require substantial funds in the days to come.
Technology will play a larger role in B2B eCommerce
B2B stores will have to accelerate their digital innovation programs to repurpose their business models following their client’s expectations. This also requires a complete makeover of their client engagement order fulfillment and distribution models. Automation and collaboration tools will be at the forefront of rejuvenating businesses.
Technology’s biggest impact will be on the job profiles across the B2B industry, as employees will be required to handle their work in a more independent manner. Person-to-person interactions and traveling will become much lesser than in the past. The use of modern B2B eCommerce automation and business intelligence tools is bound to increase as a huge number of employees will work without any external support. It also means that the businesses will increase the number of integrations and security measures on their B2B eCommerce platforms to cope with the new Work From Home/ remote work culture.
Over to You
Recognizing the evolving demand patterns and customer preferences are the only ways to manage uncertainty. Also, upholding transparency with the suppliers and customers will play an essential role in defining businesses’ success in handling the COVID-19 crisis. However, these arising situations should be treated as opportunities as businesses can now operate from multiple locations and access larger talent pools. The post-COVID era will require organizations to function flexibly and ensure that all localization principles are adhered to properly. Reducing the time-to-market and total cost of ownership for products by vamping up supply chains is necessary for improving profitability.
To know more, contact our integration experts today!
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