How digitalization benefits the wholesale industry (part 1/2)
According to a study by Forrester Research, two-thirds of all B2B customers expect their interaction with a company to be totally seamless across all channels. Regardless of whether they communicate directly through a salesperson or by cell phone, Internet, or mobile app, they expect to find exactly the same products, information, and services. While providing a consistent offering across all channels is not always easy, it does create some important advantages. Forrester noted that about one-third of all omni-channel customers are ready to spend more, while around half of the companies surveyed stated that omni-channel customers are more profitable overall.
Failure to implement an omni-channel strategy has some obvious negative consequences. If a customer is unable to obtain an item from a vendor via a particular channel, they are more likely to switch vendors than to switch channels. If the channel in question is the Internet, those competitors are just a click away. If a product is not listed on the wholesaler’s website, the customer is highly unlikely to inquire by phone—searching for a competitor’s website is much more convenient.
Historically, wholesalers have pursued a clear multi-channel strategy, using catalogs, brick-and-mortar locations, sales representatives, call centers, and more recently the Internet to interact with customers. The digitalization of multiple channels and touchpoints, along with the resulting harmonization of business processes, data, and technologies across all business areas, are key aspects of an omni-channel strategy. A successful omni-channel strategy supports consistent pricing and branding and provides customer-specific rather than channel-specific income statements. It also delivers a coherent customer experience across all areas and channels.
The transition to a truly enterprise-wide omni-channel strategy often requires a fundamental reappraisal and a new, cross-channel perspective. Wholesalers may be faced with complex change processes as old ways of thinking and areas of ownership are inevitably challenged and transformed. For example, all employees who interact with a customer during his or her journey across multiple touchpoints can be rewarded for their contribution to the long-term loyalty of that individual. This requires new internal structures, e.g., new commission models in sales and customer service.
When customers connect with a company through the various channels, they provide a range of useful information. By merging and then using this information in intelligent ways, it is possible to achieve a better and deeper understanding of the customer’s needs. Based on this understanding, the company can create tailored offerings across all channels, improve its cross- and up-selling options, and generate greater customer satisfaction and loyalty.
If available resources can be shared by multiple channels, this leads to savings, synergies, and increased profitability. By moving simple and frequently recurring services online, customer service staff gains time to concentrate on more personalized and customer-intensive tasks. Distribution costs can be reduced by providing a cross-channel overview of available stock. Going online can also cut process costs and lead times per order and eradicate continuity gaps.
In my next blog article, I will discuss another benefit of digitalization: By moving their sales online, wholesalers provide their customers a quick and easy order process —which in turn adds to customer satisfaction.
You want to know more about the digital future of the wholesale industry right now? Visit www.intershop.com/wholesale.