The Amazon effect on B2B – what should your e-commerce strategy be? Top 5 Considerations

Posted by Pat Clusman on August 23, 2018

E-CommerceWe’ve been receiving more and more inquiries lately around e-commerce for B2C and B2B. For consumer-facing companies the online imperative and path are clear: strong searchability (Amazon presence is key), ‘frictionless’ commerce, competitive pricing, benefit-oriented product listings, fast delivery, and positive customer reviews all matter. Though implementing B2C strategy is not easy, there are many good examples to learn from.

B2B e-commerce is far less mature. Amazon is the online shopping behemoth and its B2B offerings are rapidly expanding. According to a recent survey, 8 out of 10 (78.4%) business buyers use Amazon to research and make a corporate purchase online. But for manufacturers selling to businesses, the decision to list on Amazon is not entirely clear cut. Only 40% of those surveyed currently list on Amazon and of those that don’t 50% have no plans to do so. In fact, the benefits at this stage may not outweigh the risks – especially when it comes to your valuable customer data and direct relationships.

Here are the top 5 considerations to think about as you define your B2B e-commerce strategy:

1. Amazon’s wealth of consumer data 

Amazon certainly has consumer data, but B2B e-commerce is more complicated than B2C. It requires complex product configuration, pricing, discounting and bundling features that go beyond basic consumer e-commerce sites. Amazon excels in products that ship “off the shelf” and do not require specialized knowledge. Its logistics infrastructure may or may not be right for your products. Ultimately service will set you apart, along with deep customer insight vs ‘big data.’ Technical advice, the ability to deliver quickly, respond to specific questions, and other ways you serve your customers are most important.

2. Competing on price

There are many ways to avoid becoming a commodity and competing on price. The key is to add value beyond Amazon’s delivery speed. In fact, it may be better not to get caught up in the Amazon pricing game which is geared to commodities. Reward loyalty and volume buyers with attractive pricing, but more importantly offer solutions and services that show you understand their business and their end-users. Collaborate with your biggest customers to define new offerings. Your distributors may understand and cater more to the B2B buying process than Amazon does currently. Their websites might be a better fit than Amazon – an example is Cesco.com which was recently redesigned based on customer feedback. Now customers can search by specific keywords and filter results by criteria including category, finish, manufacturer, style, and product length, width, and height. Site search also now serves up pages with stock availability and product specifications.

3. Marketing approaches

It depends on your industry, but the overall trend is toward a B2C approach for marketing. It is important to understand that B2B embraces B2C as well. Competitive pricing, benefits, and on-demand delivery are important factors across the board. But if your direct customer is in procurement and buying in volume and you meet their specific needs (bundling, etc.), ultimately you will maintain their loyalty. In terms of marketing trends, many B2B trends mirror B2C: millennials are the biggest buyers; they are using mobile devices to make purchases, they watch videos (educational, not just sales) during the path to purchase, they expect personalization, and they expect fast (even immediate) delivery. On Amazon product listings that look like B2C listings (i.e. ratings, descriptions, videos, etc.) will likely surface to the top.

4. Impact on brand

Brands are about trust. You need to be careful to maintain and extend whatever built that trust in the first place. Brands have name recognition advantage at the beginning, but make sure you can deliver, both quality and quantity, as you expand. Monitor your competition, follow up with customers for feedback (and reviews to post!) – it is very easy to be disrupted online by startups.  Brand value should not be taken for granted.

Also bear in mind that brands are not usually what people search for, the generic product is.

71% of B2B researchers start their research with a generic search. Research shows that those involved in the B2B buying process are already 57% of the way down the path to a decision before performing an action on your site. As B2B brands seek new customers, it becomes increasingly important to understand what’s happening during this time.

5. Resource allocation

First, being online is necessary to compete. Surveys indicate that 69% of manufacturers without a B2B e-commerce site expect to launch one within the next year. Building your own site may be the best overall, though presence on Amazon is still a good idea in terms of search functionality, and the fact that Amazon capabilities and market reach are continuously expanding.

“Manufacturers have compelling reasons to build a B2B e-commerce site—or expand their existing site, per the B2BecNews survey. Among the objectives of manufacturers planning to sell online, according to the survey, are:

  • New sales channel: 71% of manufacturers list generating more sales as their top priority for building or expanding e-commerce.
  • New customers: 54% of manufacturers want to sell online directly to consumers.
  • Diversified sales: 45% of manufacturers see B2B e-commerce as a new way to sell over the web to retailers, dealers, wholesalers and distributors.
  • Better branding: One in four manufacturers sees B2B e-commerce as a tool to build broader brand recognition.”

Strategic questions that should be answered:

As you define your e-commerce and Amazon strategy, we suggest you ask yourself the following questions:

  1. How specialized are your products? Do your distributors sell to end-consumers or is it all B2B? The more specialized you are, the less you should focus on Amazon and instead build your own capabilities (alone or with distributors).
  2. Are your distributors large or small? Are they already selling on Amazon? Do they have their own websites? Do they have major competitors on Amazon? How sophisticated is their technology/data capture/marketing? Choosing the right distributors is key.
  3. Do you have repeat business/loyalty factor, customer relationships? If you want to go global then Amazon is fastest route (or Alibaba) but loyalty and local relationships need the human touch – along with convenience and 24/7 access, of course.
  4. What is your geographic coverage? Is Amazon operating in your area? B2B can be regional, is Amazon B2B presence strong in your region?
  5. What are your growth and strategic objectives? Look at the integration of your capabilities with your resources and goals. How much of your company’s competitive advantage is product innovation versus delivery/service innovation?

These are complex decisions that go beyond e-commerce strategy, and Amazon is a factor not to be ignored. We will continue to share our insights and findings, please feel free to contact us with any specific questions you may have.

E-Commerce Growth: Kroger Enters the Fray

Posted by Cheryl Perkins on August 13, 2018

Fresh FoodThe online shopping fray, that is. Kroger just announced its new e-commerce and home delivery push, Kroger Ship, which puts it squarely in the competitive race with Amazon, Walmart, Target,  and just about every other large US retailer.

Its offering is necessary but seems a bit late and may not be enough. Their prices are relatively low and no membership is required. Delivery speed of two days is decent. But Kroger Ship is based on its own brand and non-perishables only.  Can this really compete against the others — and Amazon most of all? They need ‘delighters’ to break people’s Amazon habit, especially Prime members. Plus, Amazon keeps raising the bar.

While Kroger has to be online and offer home delivery (cost effectively, quickly, and easily), the real question is how they will differentiate. Kroger’s other recent moves are far more powerful. Restock Kroger, the company’s strategic plan to redefine the food and grocery customer experience, includes Kroger Ship but goes further. They also:

Now, these are innovations!

The move into meal kits and fresh prepared foods is a smart one – with much higher margins than the center-aisle goods it is selling through Kroger Ship. If Kroger can combine the insight into customer preferences it gains from the lab with the convenience of meal kits and home delivery, they’ll have a winning formula. They still face competition, particularly from Aldi who just announced its launch of a fresh food home delivery service, but they’ll have an edge with the lab.

The Ocado Group and Nuro deals are also smart. Automated delivery, driverless trucks, and seamless online ordering will help make Kroger a one-click auto-decision for consumers.

Couple these innovations with Kroger brand loyalty, local appeal, and personalization, and they could easily pull ahead of the pack.

Innovation and Growth Leadership Summit: What’s uppermost on leaders’ minds

Posted by Pat Clusman on August 7, 2018

 

The Innovation & Growth Leadership Summit (IGL), held in Phoenix AZ, brought together a dynamic group of innovation leaders. Responsible for defining and executing growth strategies, participants shared many similar goals and challenges.

Key takeaways:

Differentiate by offering products that are personalized, premium, and make life better. Whether it’s multi-sensory, intelligent, or ensures health and longevity, innovations that go beyond what’s expected can break the commoditization mold. Sometimes the innovation is not the product, it might be the service, convenience or experience it offers. Product differentiation is not about features, it is about how products and services make life easier, more enjoyable, and perhaps even healthier.

Sharpen your e-commerce and online sales strategy; an Amazon presence is key. This means re-thinking how products are produced, priced, packaged, and marketed. Whether B2C or B2B, your online success will impact long-term competitiveness. Summit attendees heard about projections that indicate doubling of online procurement over the next decade. The time to move is now!

Have a focused vision and communicate it clearly. Share it with employees, partners, and customers; let them know the “why’s” as well as the “what’s.” Be an effective change agent, emphasizing the need for inclusion, collaboration, diversity, and an outside-in perspective. Make sure actions follow words. Too often leadership creates obstacles; be consistent and make people feel secure, confident, and supported.

Leverage your strengths and core assets. This means going beyond adjacencies, it means stepping back and seeing the big picture. What can your company do that is unique? Can you take your business to the next level by combining strengths as Amazon does regularly? Can working with partners further differentiate the value offered?

Others discussed operational excellence and enabling front-end tools and processes, as well as the changing role of R&D. Innovation requires leaps of faith; success is a mindset. When setbacks occur, try re-framing problems – often much larger opportunities emerge.

Since the Summit, we’ve been further exploring the topics of e-commerce, leadership, long-term vision, and game-changing growth strategies. Sign up to be an IE Insider to receive exclusive updates and special invitations. Be on the lookout for 2019 IGL Summit news – exciting plans are in the works!

Grow like Amazon: Key Steps Any Company Can Take

Posted by Pat Clusman on March 28, 2018

Learn how Amazon decides where to expand, focuses on customer happiness, takes the long-term view, leverages core strengths, doesn’t fear big bets, and more; how you can adapt these approaches to fit your organization. Amazon’s 20-year record of double-digit revenue growth is unmatched in industry. While much of its success can be attributed to CEO Jeff Bezos’ leadership, Innovationedge has identified key strategies that any company in any industry can adapt to accelerate growth – even without Bezos.

To learn what these are, download your free copy of Innovationedge’s exclusive white paper How Amazon Achieves & Sustains Record Growth.

Having a personal innovation strategy in a time of change

Posted by Cheryl Perkins on June 27, 2017

Do you have a “personal innovation strategy?” Do you need one?

My friend Robert Tucker recently published a Forbes article on disruption, and why we generally associate it with companies rather than our own careers. He notes, “in a time of exponential change and dislocation, with job functions being automated and algorithms doing more of the work humans used to do, it’s more important than ever to develop a personal career road-map that keeps you on course, no matter what comes at you.”

I wholeheartedly agree that we all need to develop our own written plan to keep us on course through good times and bad, and to help us roll with the punches. Robert suggests six ways to get started on your personal innovation strategy. I’ve shared a snippet here, and encourage you to read the rest over at Forbes:

1. Take time to develop your strategy.

A Personal Innovation Strategy is a well-conceived and written set of goals, habits, and daily actions that alert you to threats, helps you seize opportunities, and insures your viability over time. Whether you’re an independent contractor (part of the “gig” economy), or a corporate employee, think of yourself as You, Inc. Since the likelihood is almost 100 percent that you’ll be independent at some point, think of yourself in this context already.

Action step: Take at least fifteen minutes daily to strategize and invest time in contemplating your future. Make it a point to learn something new every day about the changing fortunes in your profession or industry. Collect articles, ask questions, read books, do research, and take notes. Lifelong learning begins here.

Continue Reading

 

Filed Under: Strategy

Google’s 9 Principles of Innovation

Posted by Cheryl Perkins on June 23, 2017

Google is one of the most innovative companies in the world, because it actively pursues a culture of innovation. Google for years has worked to ensure that innovative ideas are continually flowing in order to position the company for success well into the future. What is Google doing, and how can we learn from their innovative culture?

This article from Robert Brands over at Innovation Coach  is a few months old, but you may still glean some valuable insights:

From the Mind of Google: Google’s Nine Principles of Innovation

  1. Innovation comes from anywhere. At Google, this principle emphasizes that innovation is in nobody’s job title, but is everyone’s responsibility. Moreover, ideas can come from anyone in the organization, regardless if they are top-level executives, employees who work in roles or departments not typically associated with innovation, or employees on the “bottom” of the company’s totem pole. For example, at Google it was their Google Health product manager who suggested that the company optimize information on suicide prevention hotlines whenever a related search was conducted. As a result of this innovative suggestion, Google’s search information results will automatically give a suggestion of where to call for help (i.e., the National Suicide Prevention Lifeline and its free, 24/7 phone hotline) when a user makes a Google search seemingly focused on suicide.[3]

A popular innovation myth is that innovation only happens within a company’s engineering and R&D departments. To the contrary, it is often the employees on the front lines who come up with the most innovative ideas. Professional expertise alone doesn’t lead to innovation and new product development; life experiences are just as valuable, if not more valuable to the innovation process. For example, AT&T’s exceptionally popular Drive Mode app (a mobile app that can be set-up to automatically send a customizable reply to incoming messages when the vehicle starts moving at 25 mph, in order to reduce a driver’s temptation to look away from the road at his or her incoming text messages) was the innovative brainchild of an AT&T call center employee who had been personally affected by the dangers of texting-while-driving.

2. Focus on the user. A long-standing Google principle is that the company encourages its employees to build products with the user, not profits, in mind. By doing this, Gopi Kallayil, Google’s Chief Evangelist for Brand Marketing, said “revenue issues take care of themselves.”[4]

3. Think 10x, not 10 percent. This Google principle is about striving to improve something by a tenfold difference rather than just improving it by 10 percent. In other words, making a revolutionary change rather than an evolutionary change. This innovation driver comes from Google cofounder Larry Page’s preference for radical innovation over incremental innovation.[5] At Google, this 10x principle is what drove revolutionary projects such as Project Loon, where Google used high-altitude balloons to bring Wi-Fi connections to remote areas.Keep in mind that whereas this lofty think 10x principle may be appropriate for mega-companies such as Google, it’s not necessarily appropriate for all companies. Revolutionary innovation is a great thing to strive for, but it’s not the only successful type of innovation. As discussed in a previously published blog on this site, innovation doesn’t always have to be about reinventing the wheel, it can also be about simply improving the wheel. Incremental innovation—small-scale improvements that make a product better or more marketable—can drive successful, profitable innovation at your company. Also, incremental innovation—as opposed to revolutionary innovation and massive step-change innovation—makes the idea of innovation considerably less daunting and more accessible to a wider range of people.Some examples of incremental innovation include Gillette’s razors, which began with just a single razor blade. As time passed, Gillette then incrementally innovated its razors by adding additional blades and different features that better met customer needs and improved the product. Another example of incremental innovation is Coca-Cola’s brand-line extensions such as Coke Zero and more recently, Coca-Cola Life.Most companies stick with focusing on incremental innovation because it requires less risk and less investment. Especially when there is a proven track record of a company’s new product development process working in the market, incremental innovation is the safe choice. However, keep in mind that many companies are potentially missing out on massive rewards because they refuse to innovate beyond incremental innovation.

4. Bet on technical insights. Every organization has its unique insights—and betting on these unique insights can lead to major innovation. It was Google—not the automotive industry—that came up with the idea of the self-driving car. Google was able to make this major innovation because they already had the unique insights and building blocks in place to engineer a self-driving car. Google was able to tie its various information assets (data gleaned from its existing Google Maps, Google Earth, and Street View cars programs) to create the all new product entity of the self-driving car.At your business, think about whether your business has any unique insights or information assets that can be used and combined to innovate something new.

 Read Google’s next five here.

The Next Wave of Innovation in the Chemicals Industry

Posted by Cheryl Perkins on June 20, 2017

New discoveries in materials science will undoubtedly lead to a new era of growth. You may be asking who is best positioned to benefit — incumbent companies or upstarts?

The answer may surprise you.  I found an interesting article I thought I’d pass along, highlighting several new developments that could help the chemicals industry lead a new age of materials innovation, according to Strategy + Business:

The world is potentially on the brink of an age of new powerful materials, ushered in by innovation in the chemicals industry. But to be central players in this story, today’s incumbent chemicals companies will need some vital prerequisites: restructuring of their product portfolios, successful exploitation of digital technologies, and rewriting business models to generate higher returns on their investment in innovation.

To understand the dilemma facing the chemicals industry today, you have to understand its past.

Read the rest here:

Filed Under: Innovators

Running Future Cities on Blockchain

Posted by Cheryl Perkins on June 16, 2017

D!gitalist Magazine is futurecasting about blockchain technology, a trend I have been blogging about more frequently in the past year.  If you can see into a crystal ball, would you imagine that every agency, building, office, residence, and piece of infrastructure has an entry on a blockchain used as a city’s digital ledger?  How will blockchain transform entire cities?

Here is an excerpt:

Some experts say these seemingly far-future speculations about the possibilities of combining technologies using blockchain are actually both inevitable and imminent:

  • Property owners could easily monetize assets by renting rooms, selling solar power back to the grid, and more.
  • Utilities could use customer data and AIs to make energy-saving recommendations, and smart contracts to automatically adjust power usage for greater efficiency.
  • Embedded sensors could sense problems (like a water main break) and alert an AI to send a technician with the right parts, tools, and training.
  • Autonomous vehicles could route themselves to open parking spaces or charging stations, and pay for services safely and automatically.
  • Cities could improve traffic monitoring and routing, saving commuters’ time and fuel while increasing productivity.

Every interaction would be transparent and verifiable, providing more data to analyze for future improvements.

Could this be the next industrial revolution?  It certainly is something we should be keeping an eye on, and looking to the future to see how we can implement and contribute to innovation in the years ahead.

For more info, click on Running Future Cities on Blockchain.

Filed Under: Blockchain

25 Reasons Why Brainstorming Sessions Fail in Your Company

Posted by Cheryl Perkins on June 12, 2017

I love working with clients who value the creative process. I always learn a few new ways to brainstorm on bringing new, innovative ideas to the marketplace. But not everyone enjoys their company’s brainstorming sessions. I cover a lot of this in the book, Conquering Innovation Fatigue: Overcoming the Barriers to Personal and Corporate Success.

Over on the Heart of Innovation site, the authors offer 25 ways companies and participants often kill the creative process, and I thought I’d share. Do any of these sound familiar to you? Do you have any ideas on how you can turn things around to get the creative flow flowing again?

1. Lame facilitation
2. Wrong problem statement
3. Unmotivated participants
4. Hidden (or competing) agendas
5. Insufficient diversity of participants
6. Addiction to the status quo
7. Lack of clear ground rules
8. Sterile meeting space
9. No transition from “business as usual”
10. Lack of robust participation
11. The extroverts take over
12. Habitual idea killing
13. Attachment to pet ideas
14. Discomfort with ambiguity
15. Hyper-seriousness
16. Endless interruptions
17. People come late and leave early
18. Premature adoption of the first “right idea”
19. Group think
20. Hierarchy, turfs, and competing sub-groups
21. Imbalance of divergent and convergent thinking
22. No tools or techniques to spark creativity
23. Inadequate idea capture methods
24. Premature evaluation
25. No real closure or next step

Source

Celebrating innovation in your own backyard

Posted by Cheryl Perkins on June 8, 2017

Have you ever stopped to think your next breakthrough product may be right under your nose? Or that ‘local’ could go very global with the right development support and customer-needs tailoring?

A few days ago I was engaged in a lively discussion with my LinkedIn contacts on the story I posted, Top 10 U.S. Cities for Corporate Innovation. Many were wondering why their cities were left out, and others rightly pointed out (as I did in my article), that innovation happens in both large and small cities; and on campuses from large universities to small technical colleges.  So I thought I’d revisit some of the interesting innovation stories I’ve covered in my own backyard from the heartland of Wisconsin. I hope you are inspired to do the same in your home state. Please share those with me in the comments section below!

I am invited to speak at many conferences across my state, including the Northeast Wisconsin Global Trade Conference in Green Bay. S.C. Johnson’s “Delivering Game-Changing Innovation” event in Racine,

I also gather frequently with leaders from many of our global corporations. Recently in Madison I met with innovation leaders from Motorola, Kimberly-Clark, Rockwell Collins Avionics, Viasys NeuroCare, Cardinal Health, Bou-matic and Applied Marketing Concepts at the PDMA (Product Development & Management Association’s Wisconsin Chapter) event. I also enjoy meeting with entrepreneurs at our annual Wisconsin Entrepreneurs’ Conference in Milwaukee.

Closer to my own town of Appleton, Wisconsin, our entire team cheers when innovation is showcased. We have an outstanding example of that in our local Fab Lab housed on the Fox Valley Technical College (FVTC) campus in Appleton. It was established in the summer of 2007 and the Fab Lab at FVTC  and became the 17th in the world!

I don’t know about your town, but here in my community we have a surprisingly rich history of invention and innovation. Granted, this region is one of the most patent-rich parts of the Midwest largely due to the intense patenting activities of consumer products companies like Kimberly-Clark Corp. (which usually gets more patents each year than MIT!) and Georgia-Pacific.

Still, I imagine that there are many inventive and innovative people working everywhere, but possibly not being recognized. Here are just a few of the innovations that have come from my small region (population under 200,000 people) in the past decade. The important thing to keep in mind is not just how these were patented, but how they were commercialized. Perhaps it will spark some ideas for you, too.

1. Carbonless paper and a host of innovations related to microcapsules applied to paper. Appleton Paper helped lead the way, developing the coating processes that allowed microcapsules to be applied to paper at high speed without crushing them. Recently Procter & Gamble licensed
Appleton’s encapsulation technology to apply long-lasting fragrance in microcapsules to laundry via Downy laundry sheets. Numerous innovative applications remain to be developed.

2. Cellucotton or creped tissue paper: the absorbent paper wadding material used as a wound dressing and then as the basis for Kotex feminine care products, invented by Ernst Mahler of Kimberly-Clark Corporation. This also led to Kleenex facial tissue and numerous related innovations, including anti-viral tissue, many innovations in processing and packaging, and eventually soft uncreped tissue (with about 50 patents protecting this significant advance in technology, the basis now for several leading products)

3. High performance disposable diapers were invented in the Fox Valley. Key innovations include the use of superabsorbent polymers to increase absorbency and a variety of structures for reducing leakage and improving comfort.

4. The world’s first test-tube tree, a triploid quaking aspen, cloned by Dr. Lawson Winton in April of 1969 at the Institute of Paper Chemistry. Genetic engineering of trees is now the basis for some of the world’s largest suppliers of renewable fiber, such as Fibria of Brazil.

5. “Packaging Container for Microwave Popcorn Popping,” by Tim Bohrer, Tom Pawlowski and Richard Brown of Fort James Corp., now Georgia-Pacific. This patent series led to development of the first microwaveable popcorn package which ensured more kernels would pop and that the package would expand to accommodate the popped corn. The invention was a huge success selling over a billion units per year in North America. The chemical deactivation technology also led to patented processes for products used by Kraft, Heinz, Ore-Ida, ConAgra, and others.

6. LiveYearbook. This is a startup company that is inventing new ways to provide long-lasting, dynamic yearbooks at low cost for schools and organizations. They were the first IT company and first Northeastern WI company to win the Governor¹s Business Prize Award (2010). The programming for this concept is being done here in the Fox Valley.

7. The famous enMotion® paper towel dispenser, the one that automatically delivers towel by waving your hands in front of it, was developed in Neenah by a Georgia-Pacific team.

8. A variety of papermaking advances have their origins in the valley, including Georgia Pacific’s foam-based tissue forming technology that was commercialized in France and novel fabrics for papermaking from Kimberly-Clark, Appleton Wire (now Albany International), and Asten Johnson.

9. Some of the most valuable advances in nonwoven textiles and fabrics came from Fox Valley inventors working for Kimberly-Clark Corp. This includes the foundation for many of the laminated fabrics that are used in medical gowns and other health care products, the soft webs used in diapers and many other products, stretchable nonwovens, and polymer-paper fiber composites.

So take a look both inside your company and your community, perhaps sponsor a talent search or innovation challenge. You never know — mining for innovation talent might unearth the next big thing! At the very least you will be giving your local economy a boost by creating opportunities.