Feature article - Digital Rx to elevate the chemical CX
Done the right way, a heightened digital buying experience can strengthen relationships with customers, create new revenue streams, and insulate a company from disruption, say Mark Carlson (above) and David Dunn of SAP
When chemical companies contemplate the future of their business, they would be wise to consider the behemoth in the room — the real possibility that sometime in the not-too-distant future, perhaps even in the next several years, Amazon, Alibaba or some other major disruptor will point its mighty digital platform directly at the chemicals marketplace, and in doing so forever change how those products are bought and sold.
Some companies have decided to beat those disruptors to the punch by giving chemical customers what they increasingly are coming to expect from their suppliers, particularly as more business is conducted virtually because of the COVID-19 pandemic: a smooth, simple digital purchasing journey similar to those most of us are accustomed to as consumers. For a growing number of chemical companies, the entry point for that journey is a digital storefront or even an integrated, multi-vendor trading marketplace like Knowde and GoBuyChem.
In a recent article, consultants from Deloitte posited that the future for chemical companies may well depend on “providing better customer experiences,” starting with “a seamless e-commerce experience that enables customers to complete their entire transaction online.” And they suggest that digital portals and marketplaces are the logical delivery points for those elevated experiences.
The chemical industry has been down this road before, with a variety of marketplace-type ventures (ChemDex, CheMatch, etc.) in the late 1990s and early 2000s, yielding mostly uninspiring results. As Dr Bernd Elser, managing director, chemicals, at Accenture, explained in a December 2020 blog post, “Many third-party digital [chemical] marketplaces were short-lived, unable to scale beyond the very small customer segment or develop a differentiating value proposition. Furthermore, consortium marketplaces of asset-backed chemical companies struggled with a range of issues, from governance and alignment on operative directions to funding.”
Those failures apparently dampened the industry’s enthusiasm for B2B e-commerce — until recently, that is. Chemical sales on US B2B e-commerce websites grew at a 3.7% compound annual growth rate from 2017 to 2020, according to Deloitte. If the current surge we are seeing in new single-vendor digital storefronts and multi-company marketplaces is any indication, chemical producers and companies are now resolved to use e-commerce as a way to improve the customer experience.
In a business that includes tens of thousands of suppliers and distributors competing for market share, companies are realising that providing a top-shelf digital experience can put them on equal competitive footing with much larger enterprises. These new e-commerce forays stand a better chance of thriving than their predecessors of two decades ago, and delivering the Amazon-like experiences that customers expect, if they focus on three digital approaches, as described below.
One-stop shopping experience
One way for chemical companies to differentiate themselves in a crowded marketplace is to cater to customers’ growing appetite for a convenient, one-stop e-commerce experience that includes real-time pricing and visibility into availability/inventory, sample management capabilities, order and contract management capabilities and invoicing, plus easy-to-access compliance information, specs, data sheets and documentation, such as certificates of analysis. I
n a segment like speciality chemicals where highly specialised product and market knowledge is particularly important, a customer’s ability to access expert advice and consulting services, when they need them, via the e-commerce portal is a critical dimension to the buying experience. Essentially, it is about enabling customers to tap the institutional knowledge of a company’s sales and service teams, whereby they can interact with an expert at certain critical moments in the digital purchasing journey to get their questions answered.
This in-house industry expertise becomes a valuable resource for enhancing the digital customer experience, while also giving a company an important edge over disruptors from outside the industry whose marketplaces are more transactional in nature and lack this important dimension.
As part of the digital shopping experience, B2B customers nowadays have a growing appetite for product-and-service bundles that deliver an outcome. So a company could package a finished product, intermediate, or raw material with logistics and technical services, plus, perhaps compliance assistance, then offer those bundled services via its e-commerce channel(s).
These service-based offerings not only provide a company with another point of competitive differentiation as well as a potential new revenue stream, they also help a company to deepen relationships with customers, without incurring the cost to actually send a salesperson to see the customer in-person. The chemicals company becomes a solutions provider rather than just a product peddler.
Linking the digital storefront to supply chain and logistics platforms further enriches the customer journey, giving users an integrated digital experience that extends from pricing to order placement through to shipment. And when they begin to trust the quality, convenience and security of that experience, they’re likely to return for more. Platforms that enable customer experiences such as these are becoming more prevalent across the chemicals industry.
Tokyo Chemical Industry, for example, launched an online global digital storefront for its specialty organic chemicals in August 2020. The site, which pulls together eight independent regional websites to support customers in 20 countries with multiple languages and currencies, “is already delivering value at scale for TCI,” said Jonathan Brassington, head of digital customer experience at Capgemini, which helped the company launch the site.
Seamless digital sales journey
Providing a state-of-the-art digital purchasing journey not only differentiates a chemicals provider in the eyes of customers, it also becomes an equaliser that can put a company on the same competitive footing as much larger names in the industry. So, how to create a state-of-the-art journey?
Elements such as price transparency, streamlined and shortened buying cycles, and a more transparent purchasing process are a good starting point. Robust yet simple navigability and functionality, so users can readily access the information, services and products they seek, are critical to creating a familiar e-commerce experience.
Interactivity is also key. It is important that customers have the ability to engage in real time via automated, machine learning-driven chatbots, and if necessary, connect with a human being (here is where in-house technical and market expertise comes into play), before resuming their digital journey.
Done right, a digital storefront should make it easier for customers to do business with you, while also reducing the cost of sales. What’s more, it frees sales and service employees for the important work of relationship building, supporting high-value customers and generating the ideas that lead to innovation.
Integration with digital ERP, CRM & CX tools
To maximise the operating efficiency of a digital storefront, as well as the quality of the customer experience it delivers, be sure it is wholly and functionally integrated into the business’s ERP, CRM and CX platforms with robust API, so the entire enterprise is connected, communicating in real time, sharing data, collaborating and working in unison to create positive outcomes for the company and its customers. To get you there, you need digital tools that monitor, collect and analyse data about every facet of the customer experience, or as Deloitte puts it, “deep analytics about purchases, customers, and markets, to create better customer experiences and thus more value.”
Your customers are no different than those in other B2B2C markets. They’re more value-driven, outcome-oriented and digitally focused than ever. So the better equipped your company is to deliver high-quality digital buying experiences, the better positioned it will be to meet a disruptor’s challenge. Because in case you hadn’t noticed, Alibaba now has a chemicals ‘showroom’ that lists more than 400,000 products.