E-commerce has achieved 10 years of growth in just 3 months back in 2020. And it has continued to grow this year as well, with the global e-commerce market anticipated at a total of $4.89 trillion in 2021. The reason e-commerce significantly skyrocketed over the past couple of years is due to the mass transitions to online sales in both the B2C and B2B landscapes.
But with more and more sellers transitioning to online sales, competition has become stiffer. Additionally, sales cycles are now starting to settle in the aftermath of the market volatility created by the pandemic, which makes many service businesses wonder if an e-commerce platform or strategy can truly help them drive profitability.
After all, adopting the marketplace model and partnering with online third-party sellers involves investing resources into supply chain optimization, product selection, pricing, marketing, digitalization, and customer acquisition and retention. And although this sounds like a lot of effort and involves a considerable degree of uncertainty, the benefits far outweigh the risks.
The state of the industrial services landscape
Over the past year, more and more service professionals have started to explore and appreciate the value of the online marketplace business model as it helps them create new offerings and deliver their services to the increasing number of buyers who prefer to shop online. According to McKinsey, approximately 2/3 of buyers now prefer remote human interactions or digital self-service instead of traditional, in-person transactions. But are service professionals ready for the shift from traditional sales to predominantly online sales?
According to the Digital Transformation Within Aftermarket Services survey report, the industrial services landscape is prepared for the big change. In fact, up to 65% of the aftermarket service organizations surveyed for this report have already poised their organization for digital transformation and are focused on delivering the most comprehensive solution possible to their customers.
Implementing an e-commerce strategy and leveraging an online sales platform can help them achieve that. For example, a trusted one-stop-shop platform that provides access to a broad selection of curated sellers is a convenient option for both sellers and buyers. It makes it easy for sellers to build a stronger presence with minimum effort while buyers have an easier time making informed purchase decisions.
That is the reason why more than half of the participants in the survey are already planning to expand traditional sourcing to a new breed of vendors and nearly a third of them are already planning on adopting the marketplace model to give more responsibility to third-party vendors.
The benefits of leveraging an e-commerce platform
E-commerce platforms help service professionals build resilience, which is important for any business that wants to ensure continuity in an otherwise disruptive landscape. E-commerce platforms also help service businesses boost customer satisfaction and meet ever-evolving demands by enabling them to create new product and service offerings. But beyond that, e-commerce platforms help businesses boost profitability by enabling them to cut down costs on obsolete stock, optimize their inventory management, and address unprecedented logistical challenges.
- Inventory management risk: Optimizing inventory management for online sales reduces the risk of inventory stock pilling up and decreasing in value. To prepare for unprecedented demand changes or avoid being out of stock, businesses can rely on online third-party sellers or platforms, which will also enable them to increase agility and responsiveness.
- Logistics: From shifting tax policies to global events such as the COVID-19 pandemic or Brexit, there’s no shortage of logistical challenges for service professionals. To overcome these challenges and ensure online orders are fulfilled, businesses create contingency plans around third-party sellers.
- Inventory costs: To mitigate inventory risk and reduce costs, service professionals are looking to slim down on-hand inventory, leveraging third-party sellers to fulfill demand on long-tail or slow-moving items. Some businesses have already built dropship and marketplace partnerships with key sellers in order to achieve this.
Whether they need support regarding inventory management or logistics, e-commerce platforms enable service professionals to save resources, increase the agility of their value chain, and respond faster to customer or market demands in order to drive revenue. But the benefits don’t end here. A reliable e-commerce platform also optimizes the buying process, making it easier for B2B shoppers to quickly decide which supplier and service or product they want to invest in.
It also creates an opportunity for affordable advertising and marketing through functions that allow businesses to show off their products in a way that’s visually impacting, either through videos or high-quality images. Some e-commerce marketplaces also allow users to gain insights into customer behavior so they can optimize their marketing practices.
Driving profitability with e-commerce
Based on the insights revealed in the Digital Transformation Within Aftermarket Services survey report, it’s safe to say that e-commerce platforms are becoming the preferred way for service professionals to reach their customers. And that’s because the freshly discovered convenience of B2B online shopping is here to stay.
That’s why most service-oriented businesses are continuing their digital transformation efforts and striving for customer excellence. After all, customers are at the heart of any business, but this is particularly true for service enterprises.
On their continued digital transformation journey, many professionals are targeting areas of investment such as e-commerce and service platforms, focusing on expanding into new product categories and creating more data-driven aftermarket services. Likewise, within the next five years, many of them are looking to improve their bottom line by adopting a platform business model and leveraging online ordering channels.
In doing so, they will be able to deliver superior customer experiences. E-commerce platforms can enable them to personalize their offerings and pricing which are essential for B2B customer satisfaction. Personalization alongside intuitive navigation, self-service tools, comprehensive product information, and easy checkout are the ingredients of a successful and profitable e-commerce strategy.