Post summary

• The current state of the world urges traditional businesses such as manufacturers to consider e-commerce.
• Implementing e-commerce on a global scale is complicated.
• According to our research, the top challenges are integrations, business model complexity, and channel conflicts.
• Centralisation improves internal efficiencies, provides consistent brand identity, has a lower cost to serve, and easy to adapt to market changes.
• No, centralizing does not limit the optimization for the local market. In fact, localization is encouraged.

The world is engulfed in a state of uncertainty

The manufacturing sector is significantly challenged by the changes. Our pre-pandemic report in 2019 found that 80% of B2B decision-makers agreed that “if [their] organization doesn’t start to digitize their sales and services processes now, they will be going out of business in five years.” That timeline is accelerated 5 folds. If no actions are taken, the risk is now.

In the months following the pandemic outbreak, businesses were charged with a new air of change. The global lockdown forced organizations to rapidly rethink how they interact with employees, suppliers, and customers in a remote setting as they deal with the impact of a worldwide pandemic.

When your organization decides to invest in an e-commerce solution to help enable remote digital interactions in the sales or after-sales process, a few key points should be considered as manufacturers embark on their e-commerce journey.

The risk of soaring cost without significant business outcome

The last thing any businesses need in a time like this is to burn through money without any result. Anticipating potential risks could help mitigate and reduce cost when implementing any digital solutions when time is critical. According to our research with Copperberg and Evident, the 5 most significant challenges to executing e-commerce for manufacturers are integrations, business model complexity, channel conflicts, insufficient budget, and digital skills of the task force.

The five biggest challenges to achieve eCommerce ambitions

Integration struggles
59%
Multiple business model complexity
51%
Channel conflicts
36%
Lack of budget
29%
Lack of digital skills
24%

Source: The State of International E-Commerce in Manufacturing, 2021

The key is centralizing the infrastructure for local deployments.

74% of all manufacturers we have spoken to operate on a centralized commerce platform and plan to stick with this approach in the foreseeable future.

Manufacturers shared that the inconsistency of regional commerce expertise is the number one driver. But having a centralized platform also improves internal efficiencies, provides consistent corporate identity, has a lower cost to serve, and faster to adapt to market changes.

The following are the most common types of supports that corporate headquarters provide to local subsidiaries.

Support provided by HQ to subsidiaries

Commerce solution
64%
Core back-end applications
55%
Product content
54%
Pricing of products
38%
Corporate identity
36%
Promotion campaigns
36%
Online marketing
30%

Source: The State of International E-Commerce in Manufacturing, 2021

On the other end of the spectrum, marketing is where most local teams spend more time optimizing for the target audiences. Specifically, the following:

• Search engine optimization and search engine marketing (41%)
• Local promotions (39%)
• Language and translation (36%)

This leads me to my final point.

Centralization does not limit optimization for the local market

B2B eCommerce platforms built for manufacturers, wholesalers, and global enterprise corporations will provide most of the features out-of-the-box. Organizations can customize the platform to align with their business processes and optimize for local audiences.

I like how my colleague Nils Breitman, the Principal Enterprise Architect at Intershop, explained this:

“modern commerce platform should provide at least 80% of the global requirement. About 15% will be business-specific requirements that will apply across organizations. The remaining 5% is to make each online customer experience unique for each country – like languages, country-specific functions, user journey, and third-party integrations like payment.”

The time to act is now but do it wisely, learn from other manufacturers that have embarked on the same journey to anticipate potential challenges to avoid wasting time and money. As a starting point, centralize your infrastructure, product information management, consistent customer segmentation framework, and core user experience features. Localize your marketing efforts, messaging, and offerings.

For more insights, I recommend reading The State of E-commerce in Manufacturing report that Intershop, Copperberg, and Evident published in April 2021. We surveyed key decision makers in the manufacturing industry about their global digital transformation experiences