Are B2B food and beverage companies at risk of taking their customers for granted? By Michiel Schipperus
Commentators have long regarded the food and beverage (F&B) industry as one of the most recession proof sectors around. People will always need food, right? Yet it’s also one of the most dynamic and diverse sectors, with a short time to market and rapid flow of products, setting it apart from other industries. For B2B organisations operating in such a fast-moving environment, ensuring that they’re able to meet customer demand accurately and in a timely fashion is key.
Yet, recent research suggests that F&B businesses may be in danger of taking their customers for granted. The research, which surveyed over 300 global organisations, found that only a low number of F&B organisations consider the customer experience to be very important to their business growth strategy – just 54 per cent. As many as 18 per cent said that customer experience was not important to their strategy. In comparison to other sectors in the survey, (nine per cent in automotive and ten per cent in construction for example) for F&B companies this figure is nearly double the industry norm.
On top of this, 32 per cent thought e-commerce was the focal point for the customer experience and should be at the heart of digital transformation. Only 24 per cent said that e-commerce was vitally important to their digital transformation strategy, and only 11 per cent recognised the importance of e-commerce in delivering customer insights that can help determine business priorities.
In the B2C world, competition to improve e-commerce customer experience has been heating up in recent years. Retailers are recognising that when a competitor website is only a click away, every tiny step you take to smooth the customer’s path is a step towards winning a new customer or tempting a previous one to return.
Is B2B so different?
B2B customers are busy people. They generally have a choice of who to buy from. Familiar with fast, simple and friction-free B2C experiences, they want the same in the B2B environment. They don’t want to wait to talk to a sales rep; they want to know what’s available, how much it costs, when it can be delivered. They want to be able to place orders quickly and easily 24/7, from wherever they happen to be. B2B F&B businesses who can rise effectively to the challenge of delivering a successful e-commerce system have everything to gain. Yet currently, less than half (44 per cent) of respondents have their own webstore.
The research also found that F&B organisations are employing technology to create an environment that will provide a strong competitive platform. The results revealed that the top driver for optimising IT infrastructure is competitive pressure (from existing companies, new market entrants or cheaper overseas suppliers). This makes it all the more surprising that a greater number of firms aren’t placing more emphasis on improving the customer experience as a way to gain a competitive edge.
Amongst firms who have not yet adopted e-commerce, the top two reasons to get started were given was to increase sales volumes (56 per cent) and to keep up with competitors (44 per cent). The customer-focused objectives of improving customer experience and sharing product and price info were much less popular, with each being chosen by only 22 per cent of respondents. 24/7 ordering was chosen by only 11 per cent.
The research highlighted a number of perceived stumbling blocks to e-commerce project progress. These include the need to upgrade IT infrastructure (80 per cent of F&B respondents), alongside integration issues such as getting the right and complete customer data into the system (82 per cent), product information not being available in a single system (76 per cent), and availability of real time inventory (72 per cent).
It’s certainly true that the starting point for any effective e-commerce system is a solid ERP system, providing a central hub for data and processes. Once this is in place, however, it’snow possible to buy plug-and-play e-commerce platforms that integrate fully with the business’s ERP system and allow data to flow seamlessly between ERP hub and customer. This in turn allows firms to develop a truly customer-focused webstore that could prove a critical differentiator.
Encouragingly, 56 per cent of respondents who already use e-commerce are planning to upgrade their system within the next two years. This suggests a widespread recognition that current approaches are inadequate and that it is time for change.
Equally encouragingly, 88 per cent of F&B respondents agreed that it was very or somewhat important for e-commerce to be able to personalise the customer buying experience. However, only 64 per cent thought it was important that systems should be able to connect to other marketing platforms and only 42 per cent that it was important to have an omnichannel strategy giving customers the same experience across all sales channels. This compares with 59 per cent of respondents from other sectors. Worryingly, 19 per cent of respondents didn’t know whether their company had an omnichannel strategy or not.
A further consideration for firms making decisions about e-commercesystems is that an increasing number of F&B businesses are now selling online to both B2B and B2C. Seventy per cent of respondents agreed with the statement ‘F&B companies will eventually sell direct to the consumer, cutting out retailers and wholesalers’. A platform that can handle both B2B and B2C sales could therefore be vital sooner rather than later.
There is little doubt that the future will continue to bring great changes to the F&B industry. As competition intensifies, the winners will be those businesseswho are able to deliver the online speed and convenience customers now want and expect.
Michiel Schipperus is CEO of Sana. Its innovative approach and strong partner network makes Sana the driving force behind over 1200 web stores worldwide. Sana has been cited in The Forrester Wave’s B2B Commerce Suites for Midsize Organisations (Q3 2017) and recognised by Inc. as one of the 5000 fastest-growing privately-held companies in Europe for 2018.