Amazon: Alliance or Adversary? Why B2B companies are on the digital fence.
Manufacturers and distributors can learn a lot from Amazon’s successes. Developing a sound marketplace strategy can be an important piece of the puzzle. B2B companies just have to decide if Amazon is their friend, or their foe.
Episerver recently conducted research by surveying 600 B2B leaders about how Amazon is impacting their B2B company. The majority of companies are losing revenue to Amazon – with distribution companies being some of the worst hit. Sixty-five percent of distributors surveyed said they are losing money to Amazon and 53 percent of manufacturers said the same.
However, Amazon is perceived less as a threat and more as an opportunity -- and in many cases as both. Forty-six percent of distributors considered Amazon an opportunity, 18 percent of them said Amazon was a threat and 33 percent said Amazon was both. Manufacturers had a similar breakdown with 57 percent/13 percent/23 percent, respectively. Even though it may seem counterintuitive, I do believe that Amazon for B2B is both a threat and an opportunity for B2B companies.
In fact, from a certain perspective, every threat also presents an opportunity. A chance to address it creatively and strategically. It’s the other side of the coin. Even the current pandemic and economic crisis presents both a threat and an opportunity.
Strategically, B2B companies are aware of the need to move to digital. Forty-one percent of B2B leaders even say that ”selling direct” to customers online is their biggest opporutnity this year.
The pressure to implement that strategy has been accelerated. Amazon announced on April 13, 2020 that they were hiring 75,000 workers, in response to increased demand. With limitations on human interaction, we are all leveraging digital more than ever before, and some of us will continue the patterns we are learning after the pandemic passes.
Both Amazon and the current environment are creating more motivation for B2B companies to improve digitally. Here are some ways to look at Amazon in order to both overcome the threat and leverage the opportunity.
Amazon B2B as a Connector
The majority of product searches online start on Amazon across the world (download Episerver's survey of 4,000 global online shoppers). The amount of traffic on Amazon can be seen as an opportunity (and a threat). How can you strategically use Amazon to connect with more customers? A great strategy is to sell a strategic set of products on Amazon, but not all of your products.
Use Amazon to get noticed and develop a reputation. Be sure to serve your customers well. Consider following up to make sure they are happy with the order.
It is important for manufacturers to enroll in Amazon’s Brand Registry to give you greater control over your product listings on Amazon and protect your brand from counterfeits, even if you are not selling directly through Amazon.
Amazon offers a high level of functionality for B2B sales and is making significant investments in that area. Amazon offers features integration with a customer’s procurement system, gives companies the ability to setup budgeting, enables ordering on terms and provides a powerful search and personalized product recommendations.
Amazon’s budget is bigger than yours. Your goal should not be to offer every feature they do, but rather to offer features that will be the most important to your users and then to show why you are more valuable than Amazon (more on that later).
Episerver offers strong core B2B features and functionality to help you keep pace. Episerver’s recent acquisition of Insite Software, a leading North American B2B ecommerce provider, further demonstrates Episerver’s commitment to helping B2B companies go to bat against Amazon. Here are few ways:
- Foundational to B2B features online is the concept of multiple users logging in within a single account, and yet this functionality is lacking in many ecommerce systems. Episerver provides a framework that supports multiple users per account, and we built an accelerator called Catalyst for Episerver that enables us to deliver this functionality quickly and cost effectively.
- Integrating with your customers’ procurement systems is available through Shopspray Punchout for Episerver.
- Episerver content and product recommendations enable you to leverage machine learning technology to personalize your customer experience.
- Integration architecture that connects with your ERP, PIM and other enterprise systems
- Robust product management that’s fully branded for your line of products or organization
- A fully functional mobile app to help drive the eCommerce experience anywhere, anytime
Leverage the strength of Episerver’s framework to meet expectations set by Amazon.
Amazon B2B as an Adversary
With a competitor like Amazon in the marketplace, it’s especially important for your digital experience to differentiate and provide added value. Amazon’s convenience and breadth can’t be beat (so don’t try). However, they are trying to sell everything to everybody and are highly impersonal, which is leading to a growing anti-Amazon sentiment.
Your customers need more than just your products, they need advice, information and service. This is where you can compete. Identify your team’s subject matter expertise and the ways you add value that are unique to you. Create content around your expertise – articles, videos, how-to guides – the possibilities are endless. Across verticals, your B2B company’s website is where B2B decision-makers most want to learn about you – use it to your selling advantage.
While Episerver is now known for their strength as digital experience platform, they were originally known for the strength of their content management system. They are strategically investing to empower marketers and merchandisers to create digital experiences that put customers first. This includes a recent acquisition of Idio, that leverages machine learning technology to recommend the content of most interest to your visitor.
Leverage the content capabilities of Episerver to provide added value that Amazon can’t compete with.
The Amazon B2B Opportunity
Competing with Amazon and surviving the challenges of the pandemic both point to making changes that set your company up to thrive in a digital business landscape and withstand economic changes in the future.
Episerver is a great platform to build that future on because:
- Easy upgrades allow you to stay agile and invest in value-added features rather than keeping your platform current.
- Episerver’s commerce, content and personalization tools provide you with a foundation that you won’t outgrow.
- Cloud hosting means easy scalability - when supply and demand change, you can adjust quickly.
Whether your company is still new to the digital space, or if you are working to improve your digital results, look for ways to leverage your platform and better position your company to thrive against any threat – or capitalize on any opportunity.