Global manufacturers are looking to become more agile and adapt to evolving business models.
Changing consumer demands and digital-first lifestyles mandate manufacturers to rethink the way they do business. This means developing an organizational culture that embraces innovative thinking to rapidly deploy next-gen solutions and adapt quickly to market shifts.
This renewed focus on agility and resilience requires manufacturers to future-proof their value chains. These include leveraging a cloud-native, customer experience-driven digital commerce engine that can evolve and adapt to changing customer needs and developing new ecosystem-centric business models.
To capitalize on the changing market dynamics, forward-looking manufacturers are evolving their digital commerce capabilities with flexible commerce architectures, like microservices-based, API-first, cloud-native, and headless (MACH) architecture, that can deliver personalized omni-channel experiences, at speed and scale. The good news is these architectures easily integrate with core business functions, back-end data sources, and new innovative cloud-enabled functions and capabilities.
We discuss some of the critical aspects to consider in the digital commerce landscape before manufacturers set out on their digital transformation journey. We specifically focus on implementing omnichannel experiences, exploring alternative channel relationships and structures to improve supply chain resilience, and developing a flexible API-driven digital commerce architecture that easily integrates with cloud-based capabilities and back-end enterprise applications.
Exploring omni-channel as a sales strategy
Customers in the manufacturing sector are rapidly embracing digital commerce.
It is clear they want the ability to self-serve – wherever they are, and whenever and however they want. Customers also like to seamlessly pick up where they left off in their buying journey, and that too, on the device of their choice. This is especially true for manufacturing sectors with more complicated configurations and longer buying cycles. To meet these customer needs, manufacturers must move from traditional sales models and invest in next-gen capabilities that deliver seamless and personalized omni-channel experiences. Table 1 illustrates the typical differences between a traditional and next-gen sales experience.
Table 1: How manufacturers are building next-gen digital commerce capabilities
How digital commerce and ecosystem-centric business models play into manufacturing
Supply chain disruption triggered by the recent pandemic have accelerated the demand for digital commerce.
The digital commerce market size is projected to reach $17.53 trillion by 2030. New business models like expanding ecosystems, B2B marketplaces, subscription-based models, and as-a-service models will continue to evolve and offer new revenue streams to manufacturers. Next gen capabilities like AI-driven conversational commerce, phygital experiences, AR-VR engagement, and configurators will play a vital role in keeping up with the shifts in customer behavior and enhancing customer experience. It is imperative that manufacturers build agile processes and IT architectures that can adapt to the rapidly changing digital commerce landscape and evolving business models. Figure 1 illustrates a few key approaches manufacturers are taking to reimagine their digital commerce customer experience value chain.
Figure 1: Reimagining the digital commerce customer experience value chain
Delivering at speed and scale: The role of technology
Manufacturers are looking to dynamically create and manage the customer experience across digital commerce channels.
However, from a technology standpoint, it requires enterprises to de-couple the front-end user experience and move all content management to a digital experience platform (DXP). The DXP allows manufacturers to dynamically assemble, personalize, and orchestrate the front-end user experience by managing a gallery of loosely coupled, reusable, independent components that leverage MACH architecture. This provides agility and flexibility for the business and marketers to manage campaigns without relying heavily on IT or front-end developers.
Enabling new revenue streams
We outline three ways digital commerce helps manufacturers increase revenue growth.
It is important to recognize that digital commerce doesn't replace sales teams, it enables them – now, more than ever. Digital capabilities enabled by 3D technology, VR-AR visualization tools, customer specific pricing, comparison tools, real-time inventory and more, help deliver an on-demand personalized customer experience to support sales teams. The trick is to figure out when digital experiences are more effective than human-driven experiences and vice versa. And this is where customer journey mapping becomes an essential element of a sales strategy. Equally important is considering how to effectively manage this shift within the organization with change management and new governance processes.
The pandemic-induced acceleration of digital commerce, further compounded by the recent spike in inflation, has led manufacturers to focus on agility in their forecasting processes. They are also looking to increase responsiveness to improve their supply chain resilience. Manufacturers who regularly invested in broadening their supplier relationships, developing contingency plans, and investing in AI and analytics to provide real-time supply chain visibility were able to better weather the unprecedented pandemic-induced challenges.
Over the last decade, marketplaces have disrupted and transformed the retail, vacation rental, and taxi industries, to name a few. But most recently, they are reshaping how manufacturers approach their digital commerce strategy, traditional supply chain structures, and channel partner relationships. Globally B2B marketplaces are projected to grow at a whopping CAGR of 20.2% from 2023 to 2030, faster than all
B2B ecommerce channels. Unsurprisingly, manufacturers are eyeing the huge opportunity this presents to develop, own, and operate marketplaces and become the ‘Amazon’ of their sector. Other benefits include gaining valuable insights from operating the marketplace and creating the ecosystem by having partners with complimentary products or service offerings to attract consumers, grow revenues, and impact the bottom line.
Figure 2 illustrates five real-world examples of new digital commerce business models across various manufacturing sectors that have resulted in measurable business value.
Figure 2: Manufacturers accelerate growth with new digital commerce business model – success stories
Enabling future-ready digital commerce: What it takes
By future-proofing their digital commerce strategies, companies can get ahead of the competition.
Here are the key best practices to consider for a future-ready digital commerce transformation:
Customer requirements are changing. Are manufacturers in sync?
Recent global events have forced manufacturers to alter their business models.
Even though manufacturers have had to weather business storms caused by the pandemic-induced supply chain disruptions, geopolitical developments, inflationary pressures, and fears around a likely recession, they are increasingly realizing that change is inevitable. Leading manufactures are using these disruptions to focus their energies on digital business strategies to accelerate transformation and growth as they move into a new era of innovation, evolving business models, supply chain resilience, and new channel dynamics.
94% of manufacturers say that they will change their market strategy despite the economic uncertainty. Forward-looking manufacturers that have already implemented digital commerce are looking to up their game by investing in new technologies such as voice commerce, social commerce (for direct-to-consumer or D2C business models), headless commerce, and more. Clearly, a wait-and-watch approach could prove disastrous for manufacturers. Success lies in striving to lead digital innovation and proactively planning to deliver on the promise of end-to-end digitalization across the value chain.