Digital transformation is an inevitable part of any industry at present. The best example of the smoothest digital transition is Yellow pages. Who could have guessed back in the 19th century that the invention of the Yellow Pages, a book full of company contact information, would end up being a global business-to-business electronic commerce. The legend about the Yellow Pages says that the printer ran out of white paper and the yellow paper was the only one left in the office. As Frugal Marketing states, the combination of yellow page with black text was found more effective to read than black and white. The development, from 19th century to present, has had an important impact on selling chemicals in the B2C, but as well to B2B. Due to the advanced digital opportunities, it is much easier to find new chemical business partners and maintaining already existing customer relationships than ever before. Shopify Plus diagram below indicates the global power of B2B e-commerce, including marketing, selling, and distribution between the companies, shows the huge power of B2B was expected to have over B2C by last year “While B2C e-commerce is expected to hit $2.4 trillion worldwide by the close of 2017, it’s less than a third of B2B’s $7.6 trillion”.Starting from the Yellow Pages and ending up to e-commerce worth of 7.6 trillion dollars, what the future holds and what needs to be taken into a consideration?
As discussed previously about the Digitalization in the Chemical Industry, due to the huge size of the chemical industry, it takes time to implement new strategies to chemical business practices. Back in the days with the help of the Yellow Pages it was possible to find contact details and make a phone call to other companies, which is still an important customer touchpoint nowadays, but it is slowly shifting to more effective ways, such as the cloud services. For example, nowadays the buyer can find the chemical supplier contact information from the internet to contact them via chat. For the buyer, having the information easier accessible saves time to focus on making the sales instead of putting too much effort on to expand the network even more, buyer or supplier can connect by using the digital platform, such as PINPOOLS where it is possible for the buyers to look for specific chemical products and find the best supplier.
Digitalization along with the concept of Industry 4.0 has definitely created new channels to develop the way of doing business, but there are existing challenges from the development. Especially the younger generation and millennials, born between 1980’s and early 2000, who strong believes in IOT (Internet of things) have set high standards for the future of chemical B2B. As Ed Hawes on Red indicates, there are two important reasons why the impact of millennials having the power over digitalization should be taken into account:
- Just in 7 years it is predicted 80% of the workforce to be millennials. If it will occur, it is going to have an effect on both sides, sellers and buyers. In the chemical industry, most of the company CEOs are still part of the older generation but there is going to be shift in the next decades. The future decision makers are used to the use of digital services, so they are going to be more open minded to implement faster digital solutions to the practice.
- The Millennials have the largest purchasing power of any other age group, which means they invest more money. This means in the future millennial CEOs want to get quick solutions to make purchasing process easier and prevent wasting time on unnecessary matters, so they can focus on more important parts of the company operation
It is often assumed that with the amount of information available, B2B sales should be easier than back in the days when the potential customers were found only from the Yellow Pages. It has definitely made staying in contact with current customers and reaching the new ones much quicker and efficient. However, the biggest problem for convincing the customers is the overload of the information that they have, because it leads to having second thoughts. It means people are overwhelmed of all available options and do not know how to make up their mind. For instance, buyer finds several chemical suppliers and do not really see the difference between them, so it is more likely for the buyer to choose the supplier they already have done business before or heard positive feedback. Especially the millennials, who are taking over the working life, are used to taking an advantage of digitalization 24/7 and IOT, so they have high expectation for the service level and assume the company puts an effort to come up with a way how to stand out. As it is stated on The Digital future of B2B sales by Ronald Berger GmbH “They would rather gather information by "googling" than personally contacting a sales team or leafing through catalogs.” and “Their experience of shopping for consumer goods (via the likes of Amazon and Zalando) means that they already expect purchasing to be very convenient”. For chemicals suppliers this means shifting their product selection available on an online platform, in order to attract buyers with more efficient way of purchasing.
Despite of the challenge of information overload and finding the way to stand out from the competitors, the future of B2B digitalization promises new opportunities for sales team. As stated by Roland Berger GmbH “Sales also benefits from a series of new devices and applications that allow customers' preferences to be identified much more accurately – using tracking technologies and algorithms, for instance. These tools show the exact channels via which potential customers arrive at a company's website, the form in which they prefer to consume information and what contact channels they use (e-mail links, search engines, social network referrals)”. With the information of buyer behavior, the supplier is able to improve the online platform and modify it to the way it attracts more buyers. For instance, the supplier sees what are the buyers’ browsing history and uses the knowledge to place relevant information to easier approachable location on the website.
The digital transformation of B2B sales and procurement has made a huge shift because of advanced technology and it is going to be interesting to see what innovative ways are created in the future to make the business grow even more. IOT is an integral part of life on a daily basis and the new generations are born to use it from the early stage of their lives, which needs to be taken into consideration by decision makers when applying new practices for doing business. The Millennials, who are the future leaders of the chemical companies, want to implement more technology to the sales to make it quicker and easier, since they are already using digital tools every day. Big challenge to B2B chemical sales is the information overload and companies needs to find a way how to cope with it before the competitors come up with better solutions. With extensive market research of chemical company behavior and taking an advantage of new technological innovation it is possible to make the most out of the digital tools and increase e-commerce sales between chemical companies.
Other news
