Implementing e-commerce presents many challenges for distributors, including frustration with low adoption from customers, but taking time to measure the return on investment will show that it's a worthwhile endeavor, say Robert Kelley and Dean Mueller in The ROI Case for B2B E-Commerce.
"Distributors that have a strong digital strategic plan have a much higher probability of achieving the best return on investment in their digital channel transformation," Kelley and Mueller say. "Many distributors have very good expertise on the operational and financial side of the business, but little or no experience on the digital side. If that describes your organization, you will likely benefit by finding an experienced third-party resource that can help your company navigate through the digital waters."
Research from the previously published annual 2015 State of E-Commerce Study indicates that more than 41 percent of distributors are generating less than 5 percent of revenue through e-commerce. Only 4.3 percent of distributors obtain 40 percent or more of revenue through an e-commerce channel.
Commitment to an e-commerce strategy will provide returns on investment in both hard cost savings and revenue gains.
Hard cost savings are what a company gains by reducing the cost to serve. There are many areas where e-commerce generates hard cost savings, such as: decreased cost of order entry, reduced mailing costs and reduced errors.
In addition to hard cost savings, implementing the right e-commerce strategy and platform can improve the top line in many ways, as well, including increased customer retention and increased average order value (AOV).
When evaluating which e-commerce solution is best, a distributor should consider several cost-benefit areas, including whether or when to pursue an e-commerce strategy. Many companies focus initially on cost comparisons for acquiring a solution, while more experienced organizations have a deeper understanding of the types of business improvements they want to achieve.
Read more about the need to adopt an e-commerce strategy in The ROI Case for B2B E-Commerce.
