Surviving Disruption and Amazon-Like Expectations in Food and Beverage E-Commerce

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The short time to market and the quick flow of products sets the food and beverage industry apart, and makes efficiency critical to the happiness of its customers and to the success of its businesses. But this intricacy often makes e-commerce feel like an equally complex challenge.

Perishable goods, in both beverage and food sales, have a short shelf life. As more and more customers demand online sales and faster fulfillment, businesses are under pressure to meet and exceed existing needs. Meanwhile, they’re worried about the disruptors on the horizon.

What’s on the minds of businesses in the sector today?

Organizations in the food and beverage industry are no longer just concerned with the here and now. They want to master their existing processes, but also wonder: when faced with disruptors, how will they manage? Is their business agile enough to adapt gracefully without impacting existing processes? Will failing to embrace technology put them behind competitors? Will they lose their long-standing customers as a result?

For insights on how to maneuver this disruption (directly from e-commerce and food and beverage industry experts), register to join our virtual panel discussion on August 12th at 2 p.m. ET.

Staying on top of current challenges while simultaneously preparing for future ones is no easy task. But here’s a roundup of some disruptors to keep in mind, and a few ways to consider preparing your business to face them.

The top disruptors to watch in food and beverage e-commerce

  1. The threat of “The Amazon Effect”

From packaging manufacturers to bakeries and supermarkets, all businesses in the industry today are susceptible to the impact of e-commerce (and can benefit from its advantages). But e-commerce giant, Amazon, is setting a new standard for both B2B and B2C customers’ expectations of their food and beverage vendors.

They’ve already tapped into the food and beverage industry with Amazon Fresh, offering delivery times as short as an hour. The speed of fulfillment, ease of purchasing, and stellar customer service sets Amazon apart, and raises the bar for businesses whose customers have developed Amazon-like expectations for all their online commerce experiences: across both B2B and B2C.

To keep your business competitive and your customers happy, ensure that when approaching e-commerce, you maintain a laser-focus on consumer trust, and on building an experience that helps foster your existing business relationships. An approach that centers on your customers, and not on your online sales inflow, is key.

  1. A need to pair supply chain optimization and e-commerce

An unhappy customer isn’t a repeat customer, so businesses hoping to master food and beverage e-commerce have to align their internal processes to meet buyer demands as quickly as possible. And because consumers rarely buy directly from the manufacturer, the entire food and beverage supply chain requires complex internal logistics.

Given the spike in supply chain disruption that has plagued businesses in 2020, mitigating future supply chain challenges (and leveraging e-commerce to do so) is an obvious, and strategic, solution.

This may sound like a tall order. But with all the revenue and benefits up for grabs if you can do e-commerce right, it’s well worth it. In fact, globally, online sales are expected to make up 15-20% of the food and beverage industry’s overall sales by 2025: a 10x more than it did in 2016. 

But what does marrying supply chain optimization and e-commerce mean? And how can you benefit? Supply chain data insights can help you map e-commerce logistics and optimize your online sales channel, such as:

  • Costs of distribution and order fulfilment
  • Inventory matching based on SKU location
  • Shipping timelines, etc.

This means faster delivery, happier customers, fewer order errors — and with an ERP-integrated e-commerce solution, you also get hassle-free processes and visibility across end-to-end operations for your business. So, what’s at risk if you don’t?

Delaying optimization poses a significant risk for the freshness of your product. Automated supply chains get products in your customers' hands faster, making it easier to safeguard the quality of products. With the focus on freshness (and on your customers’ satisfaction), a shorter delivery time is a differentiating factor that could draw in a lot of customers, particularly B2C consumers.

  1. Continued growth of direct-to-consumer (D2C) sales

In recent years, many businesses in the food and beverage sector are choosing to sell direct-to-consumer (D2C), despite regulatory constraints. Why?  Because it’s getting easier, and it’s creating lots of new opportunities.

In fact, as a result of selling directly to consumers, 82% of manufacturers have succeeded in improving their customer relationships. D2C sales represent a $6T opportunity for distributors. And the benefits don’t stop there:

For example, in the wine sector: In 2005, only 27 states allowed direct-to-consumer wine shipping. As of 2015, that number increased to 40. Ongoing legislative changes will continue to open doors for wineries who want to sell online — not unlike the 245% jump in D2C wine sales in 2014, following changes in the Montana legislature easing the restrictions on shipments.

And what has this led to?

A massive shift toward D2C sales in B2B e-commerce (and the food and beverage industry is no exception). Already, 61% of B2B professionals have seen evidence that manufacturers, distributors and wholesalers in their supply chain have started selling direct-to-consumer. And according to our 2019 B2B E-Commerce and Digital Transformation Report, another 64% expect to see that trend continue.

What's next? Where do I start my food and beverage e-commerce journey?

Don’t fall behind, and start thinking about how you can begin to embrace D2C sales and e-commerce (as well as supply chain optimization) sooner rather than later.

For more insights on the industry and what to prepare for in 2021, download our food and beverage industry trend report.Food and Beverage Trend Report

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