B2B buyers are more open to making purchases via digital platforms.
FREMONT, CA: Direct commercial interfaces—or digital platforms—are growingly favored by B2B buyers. Chemical companies that expect to win in this space must move fast.
A growing number of chemical companies are using digital approaches to marketing and sales. One way that's embodying itself is by creating direct commercial interfaces or digital platforms. These platforms provide chemicals, plastics, and synthetics over two customer bases: manufacturer-to-manufacturer (B2B) and manufacturer-to-consumer (B2C).
B2B buyers are more open to making purchases via digital platforms.
From the customer viewpoint, digital platforms in chemicals can be classified along two dimensions: 1) a single manufacturer versus an "open platform," which incorporates numerous manufacturers, and 2) a standard transactional platform versus one geared toward industry expertise. Generally, standard products with fragmented customer bases, like polyethylene, have the maximum possibility to sell through digital channels. Products with high-cost volatility can be sold via the e-auction model. And predefined products can enable more flexibility and thus increased options for consumers.
For such platforms to succeed, three criteria must be met (chemicals lend themselves to all three). First, transparency of product costs (opacity inaccessible product stipulation); second, greater inefficiency (a platform could make selling meager and leverage advantages of scale); and third, dissociation of manufacturing and market matching (the manufacturer isn't inevitably the one that markets the product). For these grounds, no single player can win the digital platform game. Fairly, a joint venture among numerous chemical companies could demonstrate success (to bring product and data at scale and share market know-how) in cooperation with an e-commerce start-up (that contributes to speed and agility).
Chemical companies that hope to initiate a thriving digital platform must move fast. They must understand customer needs, pain points, and the necessary investments. Precedence can be decided once success factors have been found. For example, is it significant to reach other manufacturers? Or a broad customer base? In this regard, partnerships (both inside and outside the value chain) are important, comprising those with logistics companies (for shipping goods), banks (for financing goods), insurance (for protecting goods), and packaging companies (to repackage or label goods).
What will it take to win? First, building an ecosystem should be considered a means of identical supply with demand. One major success factor will be changing the organization's operating model to consider these new priorities. Advanced analytics can also leverage recommended-product algorithms. And omnichannel orchestration can help identify customers, keywords, and phrases entered into the platform's search operation. Such details will allow the sales account manager to investigate potential prospects.
