When Success Thwarts Innovation in B2B Companies
Digitization in B2B does not only bring technological challenges. The organizational consequences can also be drastic, not to mention the disruptors that are lurking. Three B2B commerce experts from ZAMRO, Akzo Nobel Paints & Coatings and Würth Nederland share their experiences at the invitation of Evident and Intershop.
How can an organization prepare itself the for digitalization?
Eric Croon, CCO and co-founder of ZAMRO: "I think, the successes of your past are the biggest enemy of innovation in your future. After all, who wants to throw away a successful formula? All your existing processes are geared to past successes. I come from the Eriks organisation, a large company with eight thousand employees, two billion euros annual turnover, complex processes, critical applications and five hundred thousand articles that we manage and we also want to digitize.
We had set up a large digital project, but it was still far too slow. To drastically accelerate it, we finally decided to set up a new company, from scratch that focuses on a different target group and is completely independent of the legacy, systems and especially the mindset of the existing company. ZAMRO was born".
Winfried Blum, director of Würth Nederland: "We are a classic sales organization with a multiplying model: the more representatives, the greater the success. We have succeeded in digitizing within the Netherlands and in other countries. We try out things that sometimes go wrong, that's possible, we learn from that. Our most important tip is that we have made a good combination of people who know the business and the customers with people who have digital know-how. That is the key to our success.
Dennis van den Hoek, Global E-Commerce & Transformation Lead at Akzo Nobel Paints & Coatings: "We have a digital team that manages all digital assets for Paints & Coatings, whether it's the brand websites or the e-commerce portals and apps. We are active in more than 40 countries, often with local teams, depending on the size and focus on e-commerce. We keep pure development central as much as possible, so the back end, front end, UX, etc. are developed as much as possible from the head office in Amsterdam, or together with a number of partners. The organization is changing rapidly as a result of digital developments -and by bringing all these technologies together we can scale.
E-commerce and the old representative seem to be diametrically opposed to each other. How do you ensure that your salespeople embrace the digital transformation?
Winfried: "The most important point is that we don't see the channels as competitive, but as complementary to each other. We have shops, representatives and the digital world. There is no difference in commission for salespeople. That is important, otherwise the sales representatives see digital as a threat to their jobs and they start working against it. It doesn't matter in which channel you make your turnover, as a representative you have to take control.
Eric: "We are a pure player, while our parent company Eriks works with account managers. We are divided into target groups - Eriks is for larger companies that need a lot of services. At ZAMRO we address the smaller customers who need a technical part or tools. It is a different way of treating them, comparable to B2C sales. Everything that ZAMRO does must be scalable, that is the secret of a pure player. That's why we also choose a target segment that we can easily serve with digital channels. If we needed the sales staff to do this, it would not scale.
Dennis: "We are originally a fairly traditional company. Everyone knows Flexa, but only a small percentage is sold online. Of course, we are busy with direct-to-consumer, building websites, e-commerce portals, but we are still at the beginning of a long journey. When I look at B2B e-commerce, most of it is still sold directly to customers through the customer care center and by the salespeople. But this is where we see great opportunities. We are developing more and more technologies to facilitate our customers and sales agents so that they can place more digital orders. We do this, for example, with various apps that are getting better and better, but are not yet perfect. For the more complex products, the digital tools are mainly supportive while other purchases can be handled perfectly online. So we have to look at both the users and the channel and ensure that we design the supporting technology in such a way that it will actually be used.
There are also some competitive challenges in the digital field. Are you a disruptor yourself or do you fear others?
Eric: "We have brought change and transparency to our market area and respond very agile to what customers want, but have we changed the market? No. We play the same sales game, but perhaps a little better. So we have to make the switch to disruption, otherwise someone else is going to do it. What keeps me awake at night is how we are going to understand what the customer really needs. Our user is a technician who has to replace a machine part. We have a web shop that is mobile but still works more easily on a desktop - however, the PC is not alongside the machine and that person has oil on its hands. We now have to think about working with voice, how to make sure that the person on the machine is helped by us without having to surf to the web shop? That is our biggest challenge.
Dennis: "You see interesting players arise in both coatings and paint. You have the Bol.coms that sell the Flexa products. You could also think of Amazon Business for B2B - how cool it would be if in the future you could have your Echo measure the square meters, which reminds you every five years to give your bedroom a new color, makes color suggestions, at the same time you receive a quote from three painters, and all at a reasonable price. These are possible future models that we will of course keep an eye on. Within our coatings division, there are emerging parties and lead providers who do not think in terms of segmentation as we do, but rather bring customers and suppliers together and can therefore occupy an important place in the value chain. They are still niche companies, disruptors that are not yet very large, but we also keep a close eye on them.