By Carlos M. González
Over the last year, I have done a lot of online shopping. Before the pandemic, I purchased items from online retailers like Amazon for random one-off items, but grocery items, household items, or clothes always merited a trip to the store. Now, online food shopping, cleaning supplies, and clothing shopping have become regular online activities. The COVID-19 pandemic has pushed our commerce transactions into a digital ecosystem unlike any we have ever experienced before.
Business-to-consumer (B2C) companies were already poised to pivot in this direction. The average U.S. citizen is already digitally connected and has access to a plentitude of services for various needs; from takeout, groceries, laundry, and taxis, the consumer shopping experience is already a digital one.
With the shift of the digital economy, industrial companies are noticing that they, too, need to pivot into the digital sales front. A recent McKinsey survey showed that two-thirds of business-to-business (B2B) customers also prefer remote human assistance or digital self-service when making purchases, and 80 percent of B2B leaders reported that omnichannel sales—a multichannel approach that creates a seamless experience between online shopping and brick-and-mortar stores—were equal or more effective than traditional methods.
The McKinsey survey collected data from 350 industrial companies. The companies that were already digital leaders had a 47 percent total return to shareholders compared to the 27 percent of digital stragglers.
The main reason for this higher return on investment is that digital companies are streamlining the process and creating a digital ecosystem—starting with online purchasing, through manufacturing, and up to delivery. Companies have been able to reduce costs, improve the customer experience, and increase profits. According to Gartner, 36 percent of heavy manufacturing chief information officers reported that digital disruption caused operating cost competitiveness to fall behind their digitally advanced competitors.
IBM’s 2021 Digital Transformation Assessment: COVID-19 a Catalyst for Change concluded that 67 percent of manufacturers had accelerated digital projects because of COVID-19 and 92 percent consider improving operational efficiency as a top priority. At the top of the list of systems and processes to strengthen included new digital design tools, manufacturing and service systems, automation, remote working and collaboration software, and remote monitoring. All of these improvements serve a more well-balanced digital ecosystem for manufacturers.
McKinsey has laid out a six-step roadmap on how to succeed at digitization for those manufacturers looking to push online digital systems.
Carlos M. González is special projects manager.