E-Commerce Heats Up Discrete Manufacturing -- A Gartner Report
A new report from Gartner indicates that e-commerce is the hot new trend in discrete manufacturing. The report says that, “E-commerce can be used for the direct sales of new products, services, digital goods/ content, replacement parts, accessories, entertainment, travel and much more.” Three items stand out in this list: services, replacement parts and accessories. Each of these items represents a new sale related to an existing product or piece of equipment (already owned by an end customer). In other words, e-commerce is changing the aftermarket.
Manufacturers typically start down the e-commerce path by implementing a few limited, tactical projects. Once there has been some success, initiatives get bigger and more strategic until e-commerce is ultimately viewed as a “mission critical” component for the entire business. According to Gartner, e-commerce is now viewed as an imperative for discrete manufacturing and to meet corporate expectations a consistent approach, across all departments, is required.
For discrete manufacturing, the Gartner report describes two business opportunities that are driving e-commerce: 1) create direct sales to counteract competitors and private labels; 2) reduce the cost of sales and marketing activities/ materials (printing and distribution). Gartner says, “…interest by both groups [revenue and cost] in online selling may have started with the sale of spare parts or accessories, and the groups are now moving on to selling the products.” In other words, allowing dealers and technicians to place online orders for service parts has proven to be so efficient and so valuable that OEMs are now opening up e-commerce to more products and additional customers. Gartner’s findings reflect a similar trend that Enigma sees where customers follow a multi-phase approach to making product, service, and parts information available online, offline and mobile.
The Gartner report tries to measure the interest in e-commerce for discrete manufacturing according to three different dimensions of business impact:
- High heat—reflects the level of interest observed during client inquiries and market analysis
- High rate of change—described as, “how fast organizations are changing their websites to improve the amount of sales coming through the websites”
- High customer-facing business potential—described as, “the degree to which an organization’s customers expect a company’s website to offer online transactional capabilities and their willingness to buy through the Web”
As the report from Gartner clearly indicates, more and more industries (like discrete manufacturing) are turning to their websites for increased revenue, reduced cost and better customer support. Enigma has 20 years of experience helping companies turn the promise of e-commerce into a reality and a recent webinar on electronic parts catalogs (EPC) freely shares the lessons we’ve learned over that time.