The 2020 Mid-Year Economic Update_long

The Invisible Solution

Distributors dont need to imitate Amazon Business, but they do need to think like them.

Over the past few years, we’ve been hearing more and more about Amazon Business from distributors and manufacturers. A jump of $1 billion to $10 billion in record time will tend to do that. Distributors now recognize that businesses are buying online, and they typically respond in one of two ways. The first is to bury their head in the sand and say, “Amazon Business isn’t a threat to our business.” The second is to say, “We need to build an experience.”

The catch is that Amazon Business isn’t building an experience. 

Instead, they are taking a customer-centric approach that is hyper-focused on solving their customers’ needs. Let’s look at one example. Amazon Business grasped that many (if not most) large companies and organizations purchase through online procurement systems, or what is commonly called e-procurement, as a way to manage internal spending. So they invested in creating integrations to over 50 of the leading procurement systems; that way, when businesses want to buy via a procurement system, it’s already connected and ready to go. Amazon Business didn’t create an Amazon experience – they created an invisible Amazon solution.

The takeaway? Distributors need to think like Amazon and figure out how to make their customers’ lives easier.

Amazon Business has been customer-centric from the start. Most distributors build their processes, and at the end — if they’re lucky — someone at the table will say, “Hey, I wonder what our customers think about this?” Thinking like Amazon Business means first listening to your customers, identifying their pain points, coming up with solutions and thenworking on processes. This is a relatively straightforward but brilliant approach that distributors can apply to their own e-commerce solutions.

Once distributors start thinking like Amazon Business, focusing on the customer and wrapping that focus into the company DNA, the technology becomes secondary. The buzzwords in e-commerce are “digital transformation,” but it’s ultimately about change management: “How do we go from where we are to where we need to be? How do we make not just a technical shift but a cultural shift?”

Legacy organizations need to rethink their legacy processes and retrain their legacy people to put the customer as the focal point of everything they do. That kind of thinking is what enabled Amazon Business to create solutions that worked for big business customers, who are a very different type of customer than an customer. 

If distributors can get past these hurdles (being business-focused rather than customer-focused, legacy thinking and change resistance) they are uniquely positioned to compete. Your customers are already buying online, or they want to. We are constantly interviewing distributors’ customers and, of the over 3,500 we’ve interviewed so far, over 65 percent say they want to buy online. Plus, your business has a depth of product knowledge and customer knowledge that can translate to a vastly better online experience for your customers than Amazon Business can achieve. In short: You know your products better than Amazon. You know your customers better. So think like Amazon and create an experience that works for your customers. Use your knowledge of your customers and your products to differentiate your company. Create a more streamlined, educational and easy experience. Focus on making your customers’ work, and lives, easier.

Justin King is President of B2X Partners and the author of Digital Branch Secrets: eCommerce Playbook for Distributors, which outlines a systematic approach for distributors looking to grow their online business.


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