Future-Shock Cloud Ecommerce is Here
In 2018, well over $100B will be spent on digital cloud ecommerce capabilities. Even the large public distributors are spending 10’s of millions on upgrading digital-selling capabilities.
The telecommunications companies have started, in parallel, a race to build out 5G wireless bandwidth starting in major cities. By 2021, Best B2B customers in top 50 cities will…
- Be increasingly digital-buying Millennials who don’t want regular rep calls.
- Have 5g phones providing 100-fold increases in bandwidth. 15 to 90 second augmented video infomercials will be prevalent.
- Be starting their product discovery journeys on Amazon (if vertical marketplaces don’t emerge).
Manufacturers will have to advertise on Amazon to be where the eyeballs are. If an end-user wants 24/7 real-time e-help, brands will provide it. If end-users want to spot-buy something direct from the factories, then new Omnichannels will deliver. (Some dis-intermediation for distributors?)
Channel selling will shift significantly from reps pushing products to end-users, to end-users pulling information and products to them digitally. Most non-spot-buying, sales volume will still go through traditional distributors. But, these trends will combine to pressure traditional, bundled, selling-service (rep) costs, covered by traditional product-markups.
The Three Steps to Winning at Cloud Selling
Most distributors’ Step One has been to bolt on better web-selling capabilities to their highly-evolved business model. But, more small orders with a high fulfillment-cost structure yields modest sales growth and shrinking profits.
The combined strains of the Big Switch to Cloud Ecommerce ‘21 on selling models will force many into Step Two: Transition Chaos.
Some will either make it to or jump directly to Stage Three: invent new, “from-scratch”, separate Cloud-Ecommerce business models aligned with serving targeted, digital end-users. Warehousing may be outsourced to robotic facilities. The digital service models, prices, and terms will vary with end-users’ choices.
And, in parallel big-volume accounts’ replenishment systems, services and selling must be rethought and digitally assisted.
Analytics For The Big-Switch Challenges
If suppliers and distributors have shared SKU-profitability analytics, then they can co-create win-win Omnichannel solutions. The same analytics can guide distributors in rethinking their sales force – skills, assignments, and compensation – to sell better replenishment systems to bigger, best accounts.
For more, on analytics for Cloud Ecommerce ’21:
- Request my “Core Renewal Roadmap” document and/or a virtual visit/demonstration ([email protected]).
- Attend my one-day seminar (www.merrifieldseminar.com). (Or, help me get it to your city in ’19)