In 2020 alone, digital commerce grew by 44%, up from 15% growth in 2019. We’ve now reached a tipping point where buyers expect digital experiences - and no industry can avoid this shift. For chemical companies especially, not investing in digital commerce has significant hidden costs. You might think you’re saving money by deferring investment to a later date, but the reality is it costs money in the form of time, lost revenue, vulnerabilities, and losing to the competition.
1. Lost business opportunitiesDigital commerce is not simply a matter of convenience for buyers - it’s about building loyalty with customers. Recent studies show that brands with a high-quality digital experience are 2x more likely to be named a preferred supplier. As a chemical manufacturer in tight competition with other brands, being named a preferred supplier is a significant business win.
Delaying investment in digital commerce might save a few dollars now, but you lose out on potential contracts. This not only means fewer deals but also a higher cost base as you’ll need more sales efforts to close the same revenues as you could get with a high-quality digital commerce experience.
This is what BASF, a global leader in the chemical industry, noticed. Initially, the BASF business team was hesitant to launch a digital commerce portal for the OPPANOL® product line at first but saw >40% growth in the year after finally implementing it. Further, the company saw a significant reduction in costs when managing long-tail sales.
2. Lost recurring revenue
More than half of B2B buyers expect a seller to remind them when it’s time to re-order. This can be done manually, but it's a time-consuming process and is prone to human error. The right digital commerce investment means that you can automate the reordering process - from reminders to processing payment - creating an opportunity to build a recurring revenue stream from loyal customers.
Further, automating reminders is a helpful way to capture smaller customers that are too small for your sales team to give personal focus to. With technology, you can capture more recurring revenue on the margin that you are missing out on in a manual sales process. One Agilis customer that implemented auto-reminders saw a 60% bump in repeat purchases from current customers. It cost the company nothing to schedule the reminders but added significant revenue and loyalty.
3. Lost opportunity to expand into profitable marketsDeloitte’s 2021 chemical industry outlook found that a key priority for chemical companies is shifting or expanding into new markets, such as healthcare and electronics. This kind of shift requires a lot of internal operational changes - from marketing plans to sales strategy, to internal product development.
Investments in digital commerce make it easy to optimize marketing and sales efforts, freeing up time and resources for the company to invest elsewhere. Without this investment, chemical company leaders will get stuck in the day-to-day sales and marketing administration of the business, unable to prioritize profitable sectors quickly enough to win new deals.
Astro Chemicals, a regional chemical distributor and Agilis customer, had this experience. The company was able to launch into an entirely new market segment. Because of the in-built Search Engine Optimization (SEO) feature of the portal, the distributor’s products were found via simple Google search by many potential customers. Within one year, the company acquired several new marquee customers in a market they’d previously been unable to penetrate.
4. Increased risk of vulnerabilities
Investing in digital commerce is not just about setting up an online store or updating your website: it’s future-proofing your business against numerous vulnerabilities.
More security: Working with purpose-built digital commerce platforms for the chemical industry, you benefit from encryption and best-in-class security measures. Stronger institutional memory: The working world is changing, and people don’t stay with the same company for their whole careers anymore. Having a digital commerce platform that captures customer data in a central portal means you don’t lose any institutional memory when someone leaves the organization. More ability to generate insights: Your sales team will always give personal attention to high-value customers, but your commerce platform can absorb data from all your smaller customers to generate high-quality insights you can use in your further sales and marketing efforts.
5. Losing to the competition
More than half (58%) of chemical buyers said they would switch providers if their preferences (including digital experiences) are not met. This means that delaying investment in digital commerce is costing you new customers and potentially reducing your customer base. As more B2B buyers demand digital experiences, not delivering that experience is a direct hit to your bottom line.
But there’s also good news in this: chemical companies that make investments in digital commerce stand to gain all the customers who are tired of your competition not delivering digital experiences.
Traditional industries need to innovate
The chemical industry is a bedrock in our modern economy. However, that doesn’t mean chemical manufacturers are exempt from investing in new technology. While chemicals are a necessary part of everyday life, changing customer expectations means businesses need to innovate to stay on top. If you don’t, you run the risk of losing out on massive opportunities and pushing customers to your competition.
If you’re looking at digital solutions for the chemical industry, schedule a free, no-obligation demo of Agilis HERE.
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