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Preconditions of the chemical industry’s transition to eCommerce
The chemicals sector is experiencing enormous growth and transformation thanks to digital technologies, as well as developed and managed data. Additionally, the necessity for R&D as well as the preferences of many B2B buyers who purchase goods through digital channels are the primary reasons that digitization has become an essential link in the value chain. Additionally, the recent uncertainties (the pandemic and geopolitical issues) have resulted in supply chain restrictions and an increase in material and labor costs, which chemical companies have been able to overcome by moving online and unlocking an additional $200 billion in a new value and 3% or more in absolute earnings.
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55 percent of consumers of petrochemical products would be eager to use digital channels if effective and value-adding platforms were offered, according to a recent McKinsey survey of the European chemical industry. This percentage is much higher for specialty chemicals, where 82 percent of clients are open to using digital platforms.
Actually, a number of fresh chemical online marketplaces and platforms have appeared, offering new chances for market participants to connect with millions of consumers. More than 65% of chemical businesses anticipate that digitalization will have a more revolutionary or disruptive impact on their business, therefore this rate of digitalization is projected to continue. Digital transformation is the second-most important capital issue for chemical businesses worldwide, according to the EY CEO Outlook Survey 2022.
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These potential risks are explored and described in this essay for those wishing to enter the digital platform game. Chemical players can flourish and generate large sales amounts if they successfully transition to and improve their digital presence.
Main advantages of moving online for chemical businesses
Neglecting the digital opportunity puts businesses in danger of being outmanoeuvred by more nimble rivals. Shortly, chemical companies will be able to tap all aspects of digital to increase growth and profitability. This will be made possible by introducing and expanding digital sales channels, utilizing advanced analytics, increasing automation, and digitizing end-to-end processes in commercial operations. Let’s delve more deeply into the primary advantages.
Raising sales by attracting online customers
In order to boost the growth of their profits, many B2B businesses are increasingly embracing digital solutions to support the entire sales process. Digital skills may give a modern sales experience to the appropriate client, with the right message, at the right time, and on the right channel, improving customers’ happiness by as much as 20 to 30%. These capabilities work in conjunction with more effective business processes.
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The most significant initiatives are probably going to be:
1. Customer experience improvements.
By differentiating themselves from their competitors, increasing customer satisfaction can give chemical firms a meaningful competitive edge. Major advancements that could be made include:
- creating consumer channels and experiences that increase average order value, encourage repeat sales, and attract new customers;
- adopting digital and mobile experiences that enable customers to make purchases, request samples, and access order information whenever and wherever they want;
- providing product and regulatory information, allowing self-service research, and streamlining the ordering procedure, all of these actions simplify work for the sales.
Chemical firms can successfully acquire an edge by utilizing these improvements in a B2B eCommerce scenario.
2. Amplification of all business activities based on collected data.
The ability to comprehend data and apply it to enhance business operations and generate value puts chemical eCommerce companies on another level of the customer experience. Customer analytics can benefit businesses in the following ways:
- proactive market trend and requirement identification;
- higher maintenance of current client ties;
- assisting cross-selling, upselling, and product suggestions;
- either producing new items or enhancing existing ones.
As a result, one of the main advantages of enhanced digital capabilities and the consolidated data set that arises from integrated chemical eCommerce software is that it may provide sales teams with insights into the behaviors of their clients. These activities have a big impact on the chemical sector. Transparency at the level of the customer-product segment will undoubtedly be produced through the use of internal and external data sources.
Creating a cost-effective business environment
Cost savings were viewed at the outset of Industry 4.0 as one of the major advantages of digitization. Through eCommerce, the automation of processes, and the allocation of salespeople using big data, the cost to serve can be reduced by up to 50 percent. A normal business may save enough money by taking advantage of this right away to pay for the rest of its digital transformation and generate enough enthusiasm and buy-in to keep the momentum going.
The typical increase in margins for businesses is two to three percentage points of return on sales. Value is mostly derived from:
- eliminating repetitious data entry that is expensive and susceptible to mistakes;
- moving to digitally enhanced pricing and margin management;
- constantly detecting patterns in customer purchases;
- real-time data synchronization with systems that operate simultaneously, such as CRM, HR, and eCommerce platforms;
- lowered labor expenditures related to data self-service.
A few challenges may occur when starting a chemical eCommerce
New difficulties arise as chemical players investigate the full range of digital options for their companies. The entry barriers are simply too high for digital innovators to be able to completely replace existing businesses due to the heavy assets that require significant investments, the lack of private industrial capacity to tap, and the many laws that control manufacture and distribution. Chemical distributors have begun leveraging eCommerce platforms to get over these obstacles in an effort to create an Amazon-like platform for selling chemicals in the future. However, businesses need to be aware of what digital transformation entails.
Although technology is essential to creating a digital commercial backbone, digitalization should be managed as a business priority. This transition entails acquiring new abilities, perspectives, methods, and tools and learning how to use them throughout the entire organization.
As a result, 37% of chemical players would see a lack of digitalization-ready talent in 2020. In addition to the financial requirement, enterprises currently find it challenging to build solid technical infrastructure and secure systems (40%). These are crucial problems when businesses transition to digital operations. Cybercrime risk becomes a fundamental worry for the company.
Furthermore, current channels could be disrupted given the way chemical businesses often enter the market. Since digitalization will result in a significant decline in the salesperson channel and new business models for the distribution of chemicals, each existing channel seems to be on an inevitable course.
Setting and enhancing eCommerce for chemical business
Starting an online store for chemicals might have many advantages and pose a few difficulties. However, developing online sales channels necessitates the acquisition of new information and abilities. The steps that should be taken to create a flawless customer experience and perfect business procedures for a chemical eCommerce store are described in the following material.
Preparing chemical business before moving online
Building and following a step-by-step digitization plan may be necessary to successfully establish an online presence. It is preferable to not feel compelled to start your transformation with a quick shift within a day or week. Additionally, deploying an eCommerce platform without making other organizational changes will not be successful. The business’s operational structure also needs to adapt.
Before creating a chemical eCommerce solution, the following factors must be taken into consideration:
- establish guidelines for maintaining the quality and relevance of data and information;
- create plans for coping with sudden changes in client demand;
- start 24-hour technical support.
Chemical businesses must also carefully consider what items to post on their eCommerce websites as well as when to do so. However, attempting to create the ideal eCommerce solution could result in never reaching the market. Hence, developing essential functionality and choosing items is sufficient to get started. Prior to falling into the trap of using conventional success measurements, such as revenues and profits, test and learn first.
Selecting eCommerce software for an online chemical store
The choice of an appropriate eCommerce platform is a crucial step in avoiding downsides. It is particularly important since it can boost elements of the value chain that are opaque or have significant redundancies. The Accenture 2020 Global Buyer Values Study indicated that having digital interfaces and experiences that are simpler and easier to interact with is vital to customers of the chemical industry.
However, during the past few years, only a limited number of chemical businesses have been able to establish an efficient website with proprietary online marketing and transaction features. One of the causes is the difficulty to select an eCommerce platform that satisfies both client and corporate requirements.
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Chemical industry participants must comprehend the necessary investments and success criteria in order to select and execute the right eCommerce software. The entire organization must fully commit to this project, which might be costly. Because of its adaptability and scalability, an open-source eCommerce platform can make it more affordable for chemical enterprises.
In addition to having access to a source code, it is necessary to have a large number of assisting individuals and organizations that can modify a chemical eCommerce solution. Furthermore, there have to be sufficient extensions and themes to easily integrate them and produce all the features a chemical firm requires.
Based on these requirements, nopCommerce can be an ideal chemical eCommerce platform to build an online store. nopCommerce has a huge community of around 300 000 members, many competent solution partners, and a high number of popular eCommerce services that can be found out-of-the-box or on the nopCommerce Marketplace.
There are many chemical eCommerce stores (e.g. Chemglass and Chemtronics) that are powered by nopCommerce. You can find them in Showcase. In addition, the top 5 enterprise-level industrial businesses that use the nopCommerce platform are listed in our blog post “Starting an Industrial eCommerce”.
Developing a chemical eCommerce solution
Once you have decided on the best eCommerce platform for your online chemical store, you can begin configuring all the necessary features and integrations. It is advised to mention the features that are currently offered by the eCommerce software that has been chosen as well as any necessary settings. It can be completed alone or in collaboration with a solution partner.
Managing transactions and gathering payment information is a crucial feature. It might be necessary to offer BNPL (buy-now-pay-later) and develop commercial products for B2B web retailers with big order values. eCommerce businesses that sell chemicals should consider including accredited logistics suppliers. Advanced analytics capabilities are also essential, as we have already stated. There are numerous integrations for payment, delivery, and data analysis services that may be found on the marketplaces of eCommerce platforms.
It is important to search for extensions that cover particular business processes because some participants in the chemical industry can have complex enterprise operations. If no ready-to-use solution is available, development agencies can assist chemical industries in developing the necessary capabilities.
The other important part is to create convenient website navigation so customers can easily access product or service information. Usually, eCommerce platforms have out-of-the-box features to create a product page and categories, as well as attributions. However, you can use various integrations that help improve the overall customer experience.
To effortlessly communicate with customers and deal with product information, chemical eCommerce businesses should consider an omnichannel approach.
Omnichannel marketing — an essential part of chemical eCommerce business
Customers want a consistent experience in the modern digital age, regardless of how they engage with a business. They demand customized experiences, mobility, and social features in addition to having access to the most recent information. For long-term success, chemical enterprises specifically must adopt omnichannel strategies that link and coordinate all channel participants.
Companies may watch consumer activity, spot sales opportunities, and develop a seamless digital experience that encourages customer loyalty by implementing these models. However, a lot of chemical companies struggle to integrate their front-end and back-end operations, frequently because of outdated technologies and disjointed workflows.
Businesses may thrill their consumers and create enduring relationships by satisfying the expectations of a seamless digital experience, including simple search features, automated request processes, real-time price and delivery information, and rapid purchase confirmation. For chemical firms to realize their full potential in the cutthroat market of today, they must free themselves from old systems and embrace the power of omnichannel eCommerce.
Conclusion
The adoption of digitalization by chemical companies has been hastened by tightening supply chains and growing inflation. In addition to assisting the chemical sector in gaining advantages like cost savings, e-networking, and customer-centricity, digitalization can also be crucial in reaching long-term sustainability goals.
Open-source eCommerce platforms may offer opportunities, particularly for businesses that experience difficulties with their worldwide go-to-market strategies. Small and medium-sized business clients’ go-to-market models might be automated or digitalized, which would result in a more effective omnichannel strategy than is currently achievable. However, this omnichannel strategy will especially benefit businesses with distributor-focused business strategies.
As was discussed in the article, businesses need to carefully assess various opportunities, dangers, and common success characteristics in order to fast progress toward becoming a successful chemical eCommerce store. By doing this, chemical industry operators can discover the optimal strategy for meeting the needs of their clients. It will be challenging to figure out how to get started and draw clients. But those who find a solution can reap significant economic rewards.
