Coronavirus: The Implications for B2B Commerce
First and foremost the COVID-19 novel coronavirus outbreak is a terrible human tragedy, affecting hundreds of thousands of people across the globe. Living in Seattle as I do - perhaps the first place in North America to really experience the outbreak - you understand how interconnected we are as human beings, and the few degrees of separation we all have from each other.
We all need to acknowledge that steps need to be taken to “flatten the curve” anywhere there is an outbreak to ensure our healthcare system can keep up and help those who are impacted hopefully recover. That is at the core of the measures China, Italy, and now even Washington State are taking to try to cope.
And while I know we all hope that these measures - along with treatment protocols and perhaps vaccines - will stem the impact of the virus, unfortunately it appears the impact may be significant and take some time to play out and get under control. Just today the World Health Organization declared Covid-19 novel coronavirus a global pandemic.
And businesses of course need to plan for many different scenarios in times like these.
For business leaders this presents a whole host of important questions ranging from employee health, to addressing supply chain disruption, to consumer trust, to business continuity. The impact on the economy and business cycle is of course unclear and uncertain. Hopefully those challenges are short term, but for businesses, what are the implications for eCommerce in the short-term and longer-term?
Of course, coronavirus will not just impact how we behave as consumers, it impacts every aspect of our lives - including work. Many employees will be working remote or from home, traveling less (or as I am, grounded), people may work in odd shifts to keep large groups from forming, and certainly people are much less likely to ‘meet up’ with a salesperson in person.
Businesses are already advising no visitors to campuses, buildings and factories. And to both drive demand and keep the proverbial machines running, B2B eCommerce will become a very important channel.
Amazon is again a looming threat here, but even for highly specialized B2B manufacturers and distributors online channels and eCommerce is going to play a critical role in the next phase of growth. That was true even before Covid-19 began to have an impact, but is more certainly true now.
For businesses everywhere it is time to gameplan to address the long-term implications of the novel coronavirus, and that is most certainly true for B2B companies where digital commerce channels will be critical moving forward.
Short term ensure your digital channels are up to date and accurate:
For relevant products, ensure your product information and content is relevant, fact-based and accurate. Customers are depending on you to keep their employees and customers safe. Rich content and relevant links to medical and scientific authorities may be an important help, and that is true even if you do not sell and market relevant products. And of course ensure your products are discoverable, both through search, but also via cross-sell and content to let customers who do not typically order in these categories know if you carry these items and are in-stock. Make sure products are attributed correctly so they appear in the right searches.
Ensure out of stock items are clearly marked and can not be ordered. This seems obvious, but not all systems are as well integrated as they should be. Having these products still appear in search and category listings with “sold-out” - and when you expect the back-order or resupply to become available - may be a better service to your customers than simply removing them, as it will save customers time and aggravation. And while it may seem anathema to common business practices, you can also consider the good will of helping customers find these products even if it is from a competitor
Ensure fair market pricing is followed and delivery promise-dates are accurate. This is a particular issue if you run a marketplace or a yield-based pricing system which could bias pricing in a way that is not appropriate now. Not only is this a moral obligation, but also may put you on the wrong side of authorities - lat alone frustrating a customer.
Reassure customers on how products will be delivered or fulfilled. Companies are naturally becoming very sensitive to visitors to their facilities, and this is especially true for factories, health-care and senior living facilities, schools, production environments, or corporate offices with a large cohort of employees or people on site. What precautions are you taking to keep your products, packaging, and personnel safe? What delivery options and flexibility can you offer? This may be important now to your customers to understand up-front. Don’t make them call to find out, they are busy. Auto-replenishment programs may also need to be adjusted. Either due to closures, slow down in your clients business activity - or on the flip side, stepped up demand for some products.
And of course… Consider how your firm can aid in community response.Healthcare and other social services in your area may soon be overwhelmed. There may be ways you can help your communities cope with supplies, technology, expertise, donations, or even logistics support.
However, the Medium and Longer-term implications are even more profound. None of us really knows how long or to what extent this situation may be in effect.
Give that it may be important to consider that:
B2B eCommerce is more important than ever. While salespeople will still have a role to play in B2B - reaching customers, being top-of mind, and capturing demand as it happens will require B2B’s to execute with excellence in their eCommerce channels and digital marketing efforts.
Some B2B’s are poised to adapt and take advantage of investments they have made in eCommerce and digital marketing. However, many B2Bs are going to be caught flat footed, having delayed investments in the past or shying away from eCommerce due to internal channel conflict. It is time to act now.
Be ready for the call from the C-Suite… “How do we double eCommerce and how fast can we do it?”
Time to move on and retire that old customer mythology. Your customers already spend more time on their smartphones than with their laptops, employees, or loved ones. Guess what, you are competing for their attention against a tidal wave of texts from their boss, Facebook, a market alert, a long list of to-do’s they are behind on, and that funny Conan video Mary in accounting sent out over slack.
They would rather text with you than talk on the phone. Email? You sent an email? You want a meeting? It is time to realize that many B2B companies still suffer with a mythology of how their customers want to work with them - face to face.
That is of course suspended now. And when it comes to getting the routine done, we want the same efficient tools we get as consumers, and doing things ourselves. That is even more true in this era of ‘social distancing’
Amazon, aggregators, and large distributors are poised to fill a gap. You are now working from home, you need something for your business, where are you going to turn? You already hate your procurement system, and Amazon - or pick your poison - is just easier.
You know when it will arrive and are just going to expense it. The old policies are out the window, because this is not business as usual. This pattern will be repeated hundreds of thousands of times a day.
If your business is without effective digital commerce channels - and a way to reach those customers and digitally engage them - you have a big problem. And once these patterns are set, it will simply be much harder to get them back.
Make no mistake here, Amazon and others are already all over this. And they can leverage buying power and their marketing engine to respond quickly. They already have a significant B2B business, and their marketplace capability enables them to also respond in ways others will be challenged to in part due to capital constraints and cost of inventory.
These changes in customer behavior will be hard to address later, and winning back the share of wallet you loose, even if you do not lose the account, will be expensive. So don’t let it happen if you can help it.
Your businesses may face a burning platform. If you serve small local businesses such as restaurants, schools, nail salons you may be impacted. If you live in areas already impacted you don’t need me to tell you, this is significant.
If you serve enterprise customers with large considered purchases or capital investments you also likely can see implications as your customers pause to understand the ramifications of this so called ‘black swan’.
We do not know how long that pause will last, but if it is discretionary it is of course at risk. And with the triple-whammy of impacted supply-chains, fluctuating capital markets and stock market gyrations, the thin line many businesses have walked in the 11-year expansion since 2009 is now turning pink, if not red.
For many B2B businesses, the foundations of their business models and operations may suddenly have symptoms from the virus as well. With the changes to come - like more workers working from home for example - some businesses need to pivot. For example, from B2B to B2B2E - business to business to (the clients’) employees.
People will invest in their homes (and home offices) and make them as productive as possible. It may be time to pivot toward new product lines, business model, customer engagement and sales, and naturally digital and eCommerce should be central to that.
More experimentation in innovative digital experiences. With in-person meetings and travel restrictions potentially lasting a while, digital technologies that were largely edge-case ideas may suddenly seem more viable.
There are many emerging digital technologies that may have even more impact on B2B than in the consumer market, and that includes augmented reality (AR) or visual search in a repair scenario where you want to do it yourself versus call in a technician - or they don’t want to come or are not available because they can’t travel or are on quarantine.
Virtual reality (VR) may be a tool for training and ‘walk-throughs’ that can’t take place in person. Group buying and even more marketplaces for gig-workers of all types may become even more prevalent in a down-cycle. Many of these digital experiments may prove to be unsuccessful, but a few may lead to meaningful efficiency gains or growth opportunities as well.
Finally, it is important to realize that there will be winners here too. There is a silver lining there for some to take advantage of - to span the gap and build long-term growth. Those who can adapt fast and leverage digital channels at the core of their business will win.
I look forward to your comments and ideas. Let’s do this together.
Be safe, be well.
Coronavirus: The Implications on eCommerce
To navigate these challenges together and give you and your business a perspective, we’ve created a content hub which will be frequently updated with trends in eCommerce.