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Customer Preferences Are Constantly Changing — You Can Either Listen or Get Left Behind

customer

Customer Preferences Are Constantly Changing — You Can Either Listen or Get Left Behind

Today’s consumers demand more from brands on every level. Millennials and Generation Zers have entered the driver’s seat with a combined $3 trillion in purchasing power, according to YPulse, and they have made their expectations clear.

Offering products at competitive prices is no longer enough — you must also provide a top-tier customer experience. That means creating open lines of communication with consumers, listening to their feedback, and offering products that anticipate their needs.

Customer experience becomes especially crucial during times of crisis, such as the ongoing coronavirus pandemic. This experience is reflected in the values that consumers want companies to hold, such as a move toward more natural, sustainable materials and processes. Companies that empathize with consumers and show compassion by reflecting these values in their manufacturing and logistics can stand out from the pack.

General Motors Co., for example, created and filled a new C-suite position for sustainability earlier this year to show its values to manufacturing partners and customers. When the coronavirus began to spread throughout the country, the company started creating ventilators to help people suffering from the worst cases of COVID-19. This appeals to consumers, as 53% believe brands should get involved in social issues that don’t impact their businesses.

There are countless ways to interact with your audience and gather insights into their preferences, ranging from social media posts to online reviews and email surveys. However, a shockingly low number of companies engage in these beneficial activities. According to a 2019 HubSpot study, 42% of companies say they do not collect feedback from their customers.

Creating products and services without listening to customers is a risky move. A great example of a company making this mistake came in 1985, when Coca-Cola changed its formula for the first time in 99 years. The company had gradually lost market share to Pepsi, so its leaders tried to make a splash with New Coke, which tasted more like Pepsi. Coke’s loyal consumers were blindsided by the change, however. They loved the taste of classic Coca-Cola and refused to embrace the new offering. Sales plummeted, and Coca-Cola reverted to its tried-and-true formula a few months later.

Microsoft made a similar blunder in 2012 with the release of Windows 8. Fresh from the failure of Windows Vista, the company decided to change the look and feel of its operating system completely to resemble Apple’s user interface. The decision backfired. Windows 8 released to poor reviews, and fewer consumers adopted it than Windows Vista. Since then, Microsoft has returned to its traditional look. 

Companies like Coca-Cola and Microsoft can afford to make big mistakes. But for most small and midsize organizations, these missteps can have detrimental consequences.

Follow these tips to ensure your operation remains on par with customer preferences:

1. Leverage CRM technology.

Manually tracking customer feedback is a fool’s errand. There are simply too many simultaneous conversations occurring across a multitude of venues. Instead, companies should use customer relationship management (CRM) software to track their interactions with current and potential consumers and to aggregate customer insights into a centralized location.

I took this exact approach while at my previous company, Schmidt’s Naturals. I was able to read customer reviews and communicate with users more efficiently. This helped us discover that customers wanted a new form of our product, which we delivered.

Most CRM platforms offer mobile access, which has been shown to improve productivity and make it easier to maintain open communication with customers. In light of the ongoing pandemic, some CRM vendors have stepped up to help struggling businesses. For example, Salesforce has gone above and beyond by offering free solutions to help companies communicate with customers during these uncertain times.

2. Reply early and often.

According to HubSpot research, a majority of consumers expect companies to reply to their messages in 10 minutes or less. To meet this expectation, devote team members to monitor your CRM system and social media accounts for questions and comments — and respond to them quickly.

You’ll also want to pay attention to comments on your social media ads, which are easy to overlook. Even if a question seems like a no-brainer, answer it. Chances are, several other customers are wondering the same thing.

Artificial intelligence and chatbots can be useful in this area. Many companies use these technologies on their websites and social media pages to help them interact with consumers, answer simple questions, provide product recommendations, and even facilitate transactions.

Yelp has done this well during the pandemic by offering updated services that allow restaurants and businesses to communicate more easily with their customers. For example, Yelp has added banner alerts to each restaurant’s page to display relevant information in a prominent spot.

3. Make authentic connections.

According to Quick Sprout, consumers are less likely to shop around and more likely to recommend you to friends if they feel an authentic connection to your brand. Chatbots might be able to handle the bulk of your customer interactions, but that doesn’t mean you should become overly reliant on the technology. Research from Sitel Group suggests that 70% of consumers would rather interact with a real person than a chatbot, so you’ll want to balance your use of AI with an authentic human touch.

Zappos is a shining example of a company that interacts authentically with consumers online. The shoe retailer’s social media team routinely — and cheerfully — replies to the majority of comments it receives, with team members signing each message with their initials. Even as Zappos transitions employees to work from home, it’s still focused on “WOWing” customers, vendors, and employees. During trying times, brands must adhere to the core values that have always driven them.

Customer preferences are always changing, and they fully expect the companies they support to keep up with them. This has never been truer than during a global crisis like the coronavirus pandemic. To innovate and stay relevant, you must continually check in with customers, monitor their online conversations, and offer a tailored experience that shows you’re listening.

Modern consumers don’t just buy products — they invest in brands. They care about purpose, transparency, and authenticity. If your company does not deliver those three essential elements, it will not survive.

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Michael Cammarata is the president and CEO of Neptune Wellness Solutions, an innovative wellness company based in Quebec offering high-quality, environmentally friendly, natural alternative products. He also co-founded Schmidt’s Naturals, a fast-growing wellness brand that was acquired by Unilever in 2017.

hemp

Plant-Based vs. Synthetic Ingredients in Consumer Products: Why You Should Add Hemp to Your Ingredient List

For the past 50 years or so, industries across the globe have rushed to synthesize everything as a matter of convenience. Synthetics allow manufactures to mass-produce products to meet rising consumer demand, which exploded after World War II. But as the 20th century ended, consumers began to question the wisdom of that choice and grew concerned about the potential health and environmental impacts of synthetics.

Today, consumer trends show a desire to return to natural products, to connect with the planet, and to buy and use items that contain ingredients people can understand. Manufacturers around the globe have started to take notice, and they have rushed to ditch synthetics and catch up with the plant-based revolution.

Are Cannabinoids the Missing Secret Ingredient?

The problems for companies trying to meet consumers’ demands for natural products are often complex. For example, it’s a challenge to find effective plant-based alternatives to many of the synthetic ingredients in products. However, one potentially overlooked natural ingredient is on the rise — hemp.

For the past 50 years, the growth and use of the cannabis plant in all its forms has been illegal in the United States and many other countries. The legality of the plant is the key reason it has never been integrated into many consumer products.

In the time since the Hemp Farming Act of 2018 passed and legalized the cultivation, study, and use of hemp in the U.S., we’ve learned a lot about the potential applications of the different cannabinoids (i.e., compounds) present in the hemp plant. Because hemp has so many compounds, it has diverse potential applications. For example, some of the phytochemicals naturally present in hemp (e.g., terpenes and phytocannabinoids) can effectively replace some of the synthetic ingredients in household products.

Now that many of the legal restrictions have been lifted in the U.S., Canada, and other countries, industries across the globe finally have access to hemp sources that can be used as natural ingredients in their products.

Imagine disinfectant wipes that are not only as effective as traditional wipes but also made entirely of plant-based ingredients instead of harsh synthetic chemicals. Toothpaste could naturally fight harmful bacteria that cause disease and other oral health concerns without any synthetic chemicals that have harmful side effects. The possibilities of plant-based ingredients are endless, and it’s time manufacturers fully embrace them.

Using Cannabinoids for Plant-Based Products

In the consumer products industry, a growing number of companies are using hemp extracts with cannabinoids, such as cannabidiol (CBD). Yet even with the legal freedom to use these ingredients, manufacturers still face significant challenges in switching out synthetic substances for hemp extracts and other plant-based ingredients.

First, they need to choose the right hemp extracts for their products and make sure their customers understand and can track those ingredients. Manufacturers also need to know the implications of including certain types of hemp extracts in products sold in countries with varying cannabis laws. With the following tips, manufacturers can use high-quality hemp extracts to enhance the natural content and appeal of their products:

1. Brush up on the laws in any country where you operate.

The growth and use of hemp extracts with CBD and other cannabinoids are largely legal in North America, which is a hub of international trade for any market. But the specific laws that govern its use —particularly in oral and topical health products — are mostly localized.

Laws governing the use of hemp extracts in these products may differ across states in the U.S., and those same laws can vary significantly from legislation in Canada. As a result, you’ll need to pay close attention to both local and federal laws wherever your customers reside.

2. Research the right extracts, and test repeatedly.

Because hemp has such a wide variety of compounds, you should learn how the different types of extracts can apply to your products. Plenty of research has gone into the cannabinoids of tetrahydrocannabinol (THC) and CBD, but there are more than 100 other phytocannabinoids in the hemp plant.

Research and test multiple variations repeatedly to discover what works best with your consumer products. With natural, synthetic-free ingredients, you’ll also have to test different methods to perfect your new formulas.

3. Conduct studies to prove the enhancement of your products.

As more outside studies add weight to the benefits of plant-based products — including those with hemp extract and its phytoconstituents — there are plenty of opportunities to conduct your own scientific research to prove your product’s performance.

The best way to do this is through well-designed clinical and consumer insight studies. Research that highlights a product’s day-to-day benefits (such as a natural alternative for a cleaning product or a plant-based body balm to massage into tired or tense muscles) provides the most appealing data to consumers.

4. Understand any marketing challenges.

After nailing down the specific hemp extracts you want to use and then testing your products, revisit the specific regulations in the different states, provinces, and countries that make up your customer base. When it comes to marketing plant-based products that contain hemp extracts, the rules can be tricky.

In Canada, for instance, you’re not allowed to promote brands that use hemp with CBD, and these products are only sold through licensed online or brick-and-mortar distributors. There are various places you can market hemp brands and products in the U.S., however, but you need to avoid making any disease-related claims that would render your product an unapproved drug.

While these might seem like tough challenges to overcome — how are you supposed to showcase your product if you can’t market it? — consumers will put effort into finding brands focused on providing natural, synthetic-free consumer products.

Choosing to go plant-based not only frees your products of potentially harmful synthetics, but it also gives you a much broader customer base. The rush to create “fake,” synthetic products is over. We have now entered the plant-based revolution.

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Photo: Michael Cammarata at the New York Stock Exchange.

Michael Cammarata is the president and CEO of Neptune Wellness Solutions, an innovative wellness company offering high-quality, environmentally friendly, natural alternative products. Michael is also the co-founder and former CEO of Schmidt’s Naturals, one of the world’s fastest-growing wellness brands and a Unilever acquisition. He is on a personal mission to invest in and scale companies globally that will make sustainable innovation and modern wellness solutions accessible to the world.

Global PVC Panel Market – U.S. Imports Hit a New Record of $3.6B

IndexBox has just published a new report: ‘World – Floor, Wall Or Ceiling Coverings Of Plastics – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Global PVC Panel Trade 2014-2018

In 2018, approx. 4.4B square meters of floor, wall or ceiling coverings of plastics were imported worldwide; surging by 9.1% against the previous year. Overall, the total imports indicated a strong increase from 2014 to 2018: its volume increased at an average annual rate of +12.4% over the last four-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, plastic panel imports increased by +59.3% against 2014 indices. The pace of growth appeared the most rapid in 2016 with an increase of 17% year-to-year. The global imports peaked in 2018 and are expected to retain its growth in the immediate term.

In value terms, plastic panel imports amounted to $9.8B (IndexBox estimates) in 2018. Overall, the total imports indicated prominent growth from 2014 to 2018: its value increased at an average annual rate of +12.4% over the last four years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, plastic panel imports increased by +53.3% against 2014 indices. The growth pace was the most rapid in 2018 when imports increased by 19% y-o-y. In that year, global plastic panel imports reached their peak and are likely to continue its growth in the immediate term.

PVC Panel Imports by Country

The U.S. was the key importer of floor, wall or ceiling coverings of plastics imported in the world, with the volume of imports reaching 1.2B square meters, which was approx. 27% of total imports in 2018. It was distantly followed by Germany (432M square meters), France (261M square meters), Canada (230M square meters), the UK (206M square meters) and the Netherlands (206M square meters), together achieving a 30% share of total imports. Belgium (130M square meters) and Australia (106M square meters) followed a long way behind the leaders.

The U.S. was also the fastest-growing in terms of the floor, wall or ceiling coverings of plastics imports, with a CAGR of +29.4% from 2014 to 2018. At the same time, Canada (+18.7%), Australia (+18.0%), the Netherlands (+14.4%), Belgium (+13.9%), Germany (+11.7%), the UK (+9.3%) and France (+9.1%) displayed positive paces of growth. While the share of the U.S. (+17 p.p.), Germany (+3.5 p.p.), Canada (+2.6 p.p.), the Netherlands (+1.9 p.p.) and France (+1.7 p.p.) increased significantly, the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the U.S. ($3.6B) constitutes the largest market for imported floor, wall or ceiling coverings of plastics worldwide, comprising 37% of global imports. The second position in the ranking was occupied by Germany ($747M), with a 7.6% share of global imports. It was followed by Canada, with a 5.6% share.

In the U.S., plastic panel imports expanded at an average annual rate of +31.7% over the period from 2014-2018. In the other countries, the average annual rates were as follows: Germany (+6.1% per year) and Canada (+12.9% per year).

PVC Panel Import Prices by Country

In 2018, the average plastic panel import price amounted to $2.2 per square meter, increasing by 9.4% against the previous year. Overall, the plastic panel import price, however, continues to indicate a mild decline. The pace of growth was the most pronounced in 2018 an increase of 9.4% against the previous year. The global import price peaked at $2.3 per square meter in 2014; however, from 2015 to 2018, import prices remained at a lower figure.

Prices varied noticeably by the country of destination; the country with the highest price was the U.S. ($3.1 per square meter), while the Netherlands ($1.7 per square meter) was amongst the lowest.

From 2014 to 2018, the most notable rate of growth in terms of prices was attained by the U.S., while the other global leaders experienced a decline in the import price figures.

PVC Panel Exports by Country

China dominates plastic panel exports structure, finishing at 3.4B square meters, which was near 66% of total exports in 2018. It was distantly followed by South Korea (391M square meters) and Belgium (292M square meters), together comprising a 13% share of total exports. The following exporters – Germany (163M square meters), Luxembourg (105M square meters) and France (88M square meters) – together made up 6.8% of total exports.

China was also the fastest-growing in terms of the floor, wall or ceiling coverings of plastics exports, with a CAGR of +20.6% from 2014 to 2018. At the same time, Germany (+9.6%), Belgium (+8.7%), South Korea (+7.5%) and Luxembourg (+1.1%) displayed positive paces of growth. By contrast, France (-2.4%) illustrated a downward trend over the same period. From 2014 to 2018, the share of China, South Korea and Belgium increased by +35%, +1.9% and +1.6% percentage points, while the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, China ($4.3B) remains the largest plastic panel supplier worldwide, comprising 50% of global exports. The second position in the ranking was occupied by Belgium ($749M), with a 8.6% share of global exports. It was followed by South Korea, with a 6.6% share.

Source: IndexBox AI Platform

strategy

Latest Bayer-Monsanto Trial Reminds Us that Culture and Strategy Must Stay in Sync

What does culture have to do with the latest challenges at Bayer and Monsanto?

Since culture goes hand in hand with strategy, quite a lot.

But this fact — that strategy and culture are interrelated — has gotten lost in the current zeitgeist where culture is viewed as the last piece an organization puts in place, something you can just create or layer on.  An afterthought of sorts to innovation, product development, sales, marketing, teamwork, and strategy.

From the minute an organization comes to be, if not sooner, culture is there. It’s the basis on which founders and leaders express their purpose, their vision, and mission. It shapes the way decisions are made about what to produce and sell, to whom, and how.  Workplace habits and standards, behavioral consistency — even rituals and language — all flow from culture, not vice versa.

In other words, culture is a starting point for all of these things and more, beginning above all with an organization’s strategic agenda. Culture defines the who and the why behind strategy.

As companies grow and evolve, they tend to lose sight of the fact that culture and strategy go hand in hand, and forget that culture was initially embedded in everything they did. Culture gets reduced to a statement hanging on a poster in the office kitchen, conference room or front lobby. The connection between culture, strategy, decision-making, and behavior gets lost. The two are no longer in sync. That puts the company’s strategic agenda and intentions at risk.

This might seem disappointing yet harmless. Not so. Because a disconnect between culture and strategy and everything that flows from them can result in exactly the sort of conflicts and miscues we’re seeing with a range of organizations, large and small. Corporate strategy gets muddled and culture gets confused. The organization gets shackled in decision making, risk management and problem-solving. This has been a challenge with Bayer and Monsanto, as well as for GE, P&G, Boeing, a host of big retail companies, and across the healthcare sector.

As explained in my new book Strategic Teams and Development: The FieldBook for People Making Strategy Happen, culture should inform and help determine every decision leaders take and every action taken throughout the organization at every level, across borders, from executive group and staff directives to day-to-day choices and behavior within teams.

How can you make sure culture and strategy continue working hand in hand, and that culture doesn’t devolve into a string of empty buzzwords staring up from a culture deck that teams and individuals glance at without following through on?

The following four questions will help you assess whether and how your organization’s everyday thought and behavior is aligning with its culture — and make sure you’re not heading down the slippery slope of letting actions and decisions drift away from their cultural drivers:

1. Does the decision we are about to make reflect our values and culture around caring for our customers and their needs in a way that treats them as the assets that they are?

2. Will this decision contribute to our profit and sustenance in a way that remains true to our culture and to the purpose, vision and mission it has led us to shape?

3. Does this decision help us maintain our competitive advantage and differentiate us meaningfully in a way that aligns with our culture and values?

4. Is this decision in line with the ethics and values of service and integrity our culture embodies and is this meaningful stewardship for our full range of stakeholders?

To be a good corporate steward you have to have your eyes wide open for the needs of all types of stakeholders: customers, employees, investors, partners, and suppliers.

These questions intersect with one another in multiple places, forming a complex lattice. Decisions that impact competitive advantage or corporate stewardship will have implications for profit and sustenance. All choices will ultimately impact customers and the way your business meets their needs. There may be conflicts between one category and another, too.

Most companies check in on how they’re doing with culture every year or two at most. But given culture’s crucial foundational importance to strategy and all that flows and is expressed from it, much more attention is needed.

These four questions should be asked regularly and rigorously at all levels of operations and decision-making. They should form the basis for decision-making protocols and policies about everything from risk management and safety standards to financial management and personnel matters.

And if the answer to any of them is “no” it’s time to stop and rethink before taking action.

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Daniel Wolf is President and Co-founder of Dewar Sloan, a consulting group focused on  strategy direction, integration and execution. For more than 25 years Dewar Sloan has served hundreds of corporate, healthcare, technology and nonprofit organizations. Author of Strategic Teams and Development: The FieldBook for People Making Strategy Happen and Prepared and Resolved: The Strategic Agenda for Growth, Performance and Change, Dan has held management and governance roles at Fortune 500 companies, SME ventures and in private equity ventures. He lives in Traverse City, Michigan.

supply chain

Digital Supply Chain 2020: Here’s What Industry Players Should Know

The new year is here and with it comes a new set of opportunities, challenges, technologies, and trends to keep a close watch on, regardless of what industry your business caters to.

In 2019, global businesses saw an influx of unpredictable economic and political changes directly impacting the supply chain and customers. This year kicked off with IMO 2020, spurring panic for those that waited until the last minute to launch compliance efforts.

Beyond these concerns remains a variety of changes on the 2020 horizon that Pervinder Johar, CEO of Blume Global shares with us and how global and domestic businesses can prepare for success in the new year. Here’s a peek behind this year’s logistics curtain.

While shipment journeys are complex and fragmented, efforts to improve the flow of products will take precedence.

All the data in the world doesn’t matter if you can’t execute on it. We’ve been talking about the potential of the digital supply chain for more than two decades. In 2020, the balance finally shifts from future potential to current benefits. Connected devices and IoT-enabled solutions are giving us more data than ever to make better decisions — connecting the legs of the supply chain path while simplifying information exchange. To improve the flow of products and information from point A to point B, we will see more shippers adding sensors on almost everything, not just the most expensive equipment.

Maximized capacity and minimized empty miles.

We will see a more concerted effort to reduce waste in the supply chain. Eliminating the empty miles and excess CO2 emissions will become a bigger focus for smaller companies as larger organizations use it as criteria when selecting supply chain partners. Major manufacturers, shippers, and carriers have the clout to move the rest of the market. Smaller companies will invest in sustainable initiatives and the reduction of carbon emissions as a cost of working with major companies.

Better technology and planning will close the gap between planning and execution.

Traditional, long planning cycles don’t align to the expectations of today’s consumers. In addition to moving products, companies must deal with the added expectations from customers around product availability and expedited delivery — and in short, customers want what they want, and they want it now. While the Amazon effect has elevated customer experience across the board, it has also resulted in companies stockpiling trillions of dollars of inventory – a cost that very few aside from Amazon can justify. As a result, we can expect to see fewer companies stockpiling inventory and more focusing on improving inventory management and execution.

The American Transport Research Institute (ATRI) conducts an annual report on the operational costs of trucking. In its 2018 report, ATRI found that trucking companies traveled over 9.4 billion miles in 2017 and 20.7 percent of all those miles were empty. The industry can do better.

It has become essential for LSPs to be able to securely collaborate with their customers, carriers, and other service providers on a neutral digital platform. Accessible data and predictive analytics will remain key competitive differentiators. By establishing a centralized, digital repository that provides the same access to all reliable data across the supply chain, retailers can promise improved customer experience, competitive prices and a higher quality offering.

Low- or no-cost TMS-like solutions will become a priority for motor carriers.

Motor carriers are a critical link in the supply chain — yet they are the most dispersed and least connected of transportation modes. While they carry a huge volume of cargo — more than 70 percent of domestic tonnage— the vast majority are part of small organizations: 90 % of firms operate six trucks or fewer (source: American Trucking Association). Carriers, LSPs and shippers need to embrace solutions that provide low- or no-cost TMS-like solutions that empower even a single-truck firm with access to logistics and supply-chain networks.

Smart technologies will decrease the amount of time it takes for an invoice to be processed.

Currently, LSPs, freight forwarders and shippers need to wait weeks/months for invoices to be processed, which impacts their bottom line. But, with the increased investment in and use of smart technologies by companies along the supply chain, the amount of time it takes for an invoice to be received and paid will significantly decrease. This will also lead to better and stronger relationships between companies along the supply chain.

Artificial Intelligence will reach its potential by becoming domain specific.

The potential productivity gains from AI are anticipated to be anywhere from $13.7 trillion to $15.7 trillion by 2030, according to the McKinsey Global Institute and PricewaterhouseCoopers, respectively. The next phase of AI success happens when technical capabilities are matched with industry-specific expertise. We are at a significant inflection point in the adoption of AI-enabled solutions. Linking domain expertise and data with technical innovation is necessary for technology to reach its full potential to deliver measurable, effective results to the companies that implement them.

Tariffs and trade woes mean new supply chain opportunities in Southeast Asia.

Bigger, more sophisticated supply chains will seek out new primary sources. In part due to the tension over tariffs with China, companies are moving their supply chains out of the country and building up new footholds in Southeast Asia. Aside from tariff concerns, companies are looking at overall cost of business and the availability of resources to meet their needs.

e-commerce

5 Must-Have Features of Enterprise E-Commerce

E-commerce is everywhere — unless, of course, you look in the B2B space. Unfortunately, one segment lags behind all the rest when it comes to online sales: manufacturers. Just 38% of manufacturers have e-commerce websites, and only 6% of all manufacturer sales come through this particular channel. 

Part of the reason manufacturers are so slow to adopt e-commerce can be traced back to the old adage “if it ain’t broke, don’t fix it.” The traditional ways of doing business largely haven’t posed a problem yet, so many manufacturers don’t feel a real sense of urgency to explore the increasingly relevant direct-to-consumer model. 

It also has a lot to do with technical hurdles. For many manufacturers, moving to e-commerce involves taking on yet one more system to master — that or an expensive integration with their current enterprise resource planning (ERP) software. It’s nearly impossible to get an e-commerce platform to talk to an old “closed” mainframe, so plans to upgrade often involve a two-year timeframe or longer to get everything up and running. They might also involve a million-dollar price tag. Not surprisingly, this tends to put e-commerce on the back burner pretty quickly. 

And it’s important to note, too, that most manufacturers work through distributors and dealers, making e-commerce seem like nothing more than a mere alternative to their current traditional sales channels. 

A Missed Opportunity

What many manufacturers seem to be missing, though, is that B2B customers are also B2C customers. Chances are that they’re already shopping online for their personal needs, and not having a way to buy their business products and services online can have a hefty negative impact on the customer experience. If you’re manufacturing a commodity product and your sales process lacks the convenience of shopping for that product online, your customers might begin to look elsewhere. 

Remaining passive about e-commerce is simply the wrong approach, especially with B2B buyers moving more of their purchases online all the time. As it stands, nearly half of all companies utilize online channels for 50% to 74% of all their corporate purchases. Not being online just means you’ve missed out on an opportunity — not only to secure additional sales, but also to broaden your reach to a global level

Also, remember that it’s easier than ever for competition and new players in the market to get in front of your customers via Google, Facebook, and email. Not having an e-commerce site could easily cost you market share, even if the competition’s product isn’t as good as yours.

Beyond the Basics

Knowing that it isn’t enough to conduct all business offline, know, too, that it isn’t enough to just invest in getting an e-commerce platform, leave it there, and call it good. Your site has to offer the functionalities necessary to run an online business. If your system doesn’t support multiple pricing tiers, it probably also doesn’t mimic your current sales process. Clearly, that’s not a good thing. 

Your site needs to be able to support multiple buying options, such as “requests for quotes” as opposed to a shopping cart model. It can take time to arrive at a number in a complex B2B transaction, and the last thing you want is for a customer to have to take the interaction offline just to finalize scope and nail down specifics. 

This naturally leads to my next point. Assuming your e-commerce site comes equipped with all the basics like browse, add to cart, checkout, email confirmation, etc., there are a few features to look out for at the enterprise level. Those often include the following:

System integration options

In e-commerce, a certain amount of coordination is necessary between the website itself and your back-end system that you use for inventory and accounting purposes. Without proper integration, order fulfillment can easily get problematic. Focus on maintenance, data input, and offering a seamless user experience. Most of all, understand all the system integration options of your marketplace website before going with one provider over another.

Proper data to support search

Product information is important. It’s what consumers see prior to making a purchase decision. But it can sometimes pale in comparison to the product data used behind the scenes. A number of data fields and HTML tags enable your products and website to rank in both Google and on-site search results. Make sure your platform accommodates these options. Also, inquire about the tracking capabilities of your on-site search function. It can be useful to monitor what users found — and didn’t find — during a visit.

Customer tiers

At the enterprise level, you’ll likely run across different types of customers. Being able to segment these customers into various tiers can come in handy. Based on their purchase history, for example, you might determine that one tier would respond well to a certain promotion while another’s browsing behavior could inform subsequent product recommendations. In other words, segmenting tiers allows you to personalize your messaging, pricing, and other marketing efforts to fit the needs of your customers. So look into this functionality while reviewing your e-commerce options.

Analytics integration

Whether you’re looking at an off-the-shelf platform or a custom solution, reporting is very important. At a bare minimum, make sure a standard tool like Google Analytics can be integrated with your e-commerce system. You’ll also want to inquire about the setup of advanced features like e-commerce tracking.

Merchandising

Generally, any platform you go with will provide the functionality of assigning products to categories. This can help with on-site search and make it easier for visitors to browse your product line. Beyond that, you might wish to feature certain products. The question, then, is what ability do you have in the platform to create banner ads, highlight related products on a product page, create landing pages around a spotlight topic for the month, and feature products in other ways? 

Providing a good online experience naturally makes customers feel good about doing business with you. It also increases the likelihood of driving new customers to your business without needing to invest in additional resources. 

Ultimately, you can handle more transactions with an e-commerce site in your corner. Just make sure your site provides you with all of the functionalities you need to keep your business running smoothly and your customers happy. 

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Michael Bird is the CEO of Spindustry, a digital agency focused on e-commerce, SharePoint portals, and enterprise websites. He has almost 30 years of experience in interactive development, user behavior, and business solutions. His successful agency, Spindustry, puts these strategies into practice to help businesses grow.

newtrend

NEWTREND USA VINDICATED BY CBP’S FINDING OF NO EVASION

City of Industry, California-based Newtrend USA Co. Ltd., a leading producer of fine chemical products, announced Sept. 30 that U.S. Customs and Border Protection (CBP) found no merit to the transshipment allegations made against it by its competitor, Salvi Chemical Industries Ltd. 

In September 2018, Salvi alleged to CBP that Newtrend evaded payment of antidumping duty cash deposits by transshipping Chinese-origin glycine through Thailand. That complaint initiated a CBP Enforce and Protect Act (EAPA) investigation in which the government required Newtrend Thailand to prove that it was not transshipping glycine produced in China.

The EAPA probe confirmed that Newtrend only manufactures and ships glycine to the U.S. manufactured at its affiliate in Thailand, Newtrend Food Ingredient Co., Ltd. 

“Newtrend is gratified with the outcome,” says Douglas Heffner, chairman of the U.S. Customs and International Trade practice at Drinker Biddle & Reath, LLP, who represented the company. “They were confident they had operated in complete compliance with all regulations and are pleased to put this behind them.”

expert logistics

8 Strategies to Navigate Trade and Tariff Volatility

A steady drumbeat of tariffs, changing trade policy and an overall environment of uncertainty are leading many manufacturers to take a “wait and see” approach to investment and expansion. Companies are reassessing spending plans, finding it challenging to adjust how they do business on the fly in response to unsettled trade policies.

Manufacturers have seen the effects in the cost of raw materials, which has led customers with long-term pricing agreements to push back. Some are finding they need to negotiate changes to contract terms, while others are faced with locating new supply sources. However, these are difficult changes to make, and companies are unsure whether to push forward as uncertainty over tariff amounts, origin, timing and related retaliation persists.

As a result, manufacturers are hesitant to commit to large investments or expansion plans unless they can be certain they’ll see a long-term payoff. Whether manufacturers need to change their supply chain strategy, find alternative sourcing or re-source materials, they don’t feel confident implementing these initiatives without more evidence of stability in trade policy.

While the next round of tariffs may be out of manufacturers’ control, they can be proactive in preparing for changing trade policies by considering these steps to weather the storm:

Renegotiate rates with suppliers
Even if a manufacturer’s products aren’t direct tariff targets, they may include affected materials like steel and aluminum, resulting in higher cost of goods and materials. Now is the time to renegotiate terms with suppliers and try to lock them into long-term deals with favorable pricing. It may be easier said than done in many cases, particularly in cases where suppliers are using the assessment of new tariffs as an opportunity to raise prices. It’s critical manufacturers incorporate key protection clauses to avoid major price spikes that would be damaging to their business model when entering into an amended, extended or new supply contract.

Evaluate profit margins
With tariffs increasing the costs of goods and materials, it’s imperative for manufacturers to examine which costs they can absorb and which they’ll need to pass on to customers. This process involves understanding where a manufacturer might offset material cost increases with other efficiencies or cost rationalization, and the level of cost increase customers will tolerate. In customer contracts that have price escalation clauses or limitations, manufacturers may need to attempt to renegotiate clauses that prevent recovery of tariffs paid.

Consider free-trade zone opportunities
Too often, manufacturers overlook available opportunities provided by free-trade zones. The free-trade zone option allows companies to develop a product, then export it to a U.S. customs territory or foreign destination, potentially bypassing any tariffs on the product if it has been transformed.

Establish a dedicated trade and customs compliance group
Consider forming a trade compliance group with clear governance. Charge this group with developing strong “what-if” capabilities to understand the impact of various tariff and trade scenarios, including inventory and supply chain strategies, sourcing alternatives and modeling multiple data sources.

Take advantage of exclusion processes
When granted, exclusions apply retroactively to the date a tariff became effective. The Commerce Department reviews exclusion requests for Section 232 Steel and Aluminum tariffs, while the United States Trade Representative (USTR) provides a mechanism to request exclusions for Section 301 (China) tariffs. The Commerce Department has shown a willingness to provide exemptions in certain cases, particularly since March when the tariffs of 25 percent on steel and 10 percent on aluminum went into effect, making it all the more important for manufacturers to evaluate opportunities for exclusions.

Assess imported product classifications
Each product’s classification dictates whether or not it is included in the tariff order. Whether there is an accidental misclassification, an intentional misclassification by the overseas seller or a product that falls within a gray area, an audit of the classifications of imported goods will help manufacturers elude surprises and potential liabilities – and could even result in the avoidance of higher tariffs.

Import sooner versus later
Manufacturers with source material subject to the 10 percent tariff may want to procure more before the tariff leaps to 25 percent.

Seek out alternative sources of supply
Manufacturers should explore alternate supply sources to shield their business from the disruption caused by tariffs. They should be prepared to onboard new supply partners quickly – a process that might include partner profiles, legacy systems, custom coding and new systems to securely exchange order, invoicing, shipping and payment data.

Time will tell the extent to which new tariffs and trade policy will impact the manufacturing industry. Regardless of today’s uncertainty, manufacturers should take steps now to prepare and protect their business interests amid the shifting trade environment.

EXPORTING THE ALL-AMERICAN ROAD TRIP

Freedom and Community at the Same Time

Pull into a KOA (Kampgrounds of America) and you’ll find tremendous variety among recreational vehicles (RVs) parked there. Some are full on motor homes with big screen TVs and leather sofas. Others are utilitarian pop-up trailers for sleeping and tossing some cooking necessities into a small fridge. The ability to right-size and customize your temporary home makes RVs appealing and accessible to a wide range of customers on different budgets, whether they be renters for summer camping or retirees touring the country at a leisurely pace.

Generation X (the under 55 crowd) is taking over as the largest group of RV buyers among the 9 million or so Americans who own an RV. We don’t own an RV, but on our first RV family road trip this summer, we found bustling sites with bingo and kids on hover boards, sites with quiet s’more-makers and star-gazers, to downright serene sites on mountain tops where retirees gathered to train their miniature dogs on obstacle courses. The one thing they all had in common was respect for personal space combined with a sense of community. Hand waves are obligatory and people offered such genuine smiles that I thought I was supposed to know them already from somewhere.

RV Capital of the World

Elkhart County, Indiana is home to more RV production than anywhere else in the country – a full 80 percent of American-made RVs come out of Northern Indiana. The Recreational Vehicle Industry Association (RVIA) is bullish about the industry’s growth prospects. RV sales and rentals benefit not only the vehicle manufacturers and dealers, but also the hundreds of specialty component suppliers throughout the United States. The RV boom supports the tourism industry more generally (another competitive “export” of the United States) with positive indirect impacts on the more than 45,000 Americans working on campgrounds and elsewhere in the travel and tourism services sector. Overall, the RV industry estimates it has makes a $50 billion contribution through direct, indirect, and induced economic impact on the U.S. economy.

A New Frontier

Today, less than 10 percent of U.S. RV production is exported. Historically, and for the near term, 90 percent of those exports go north across the land border to Canada. But the U.S. International Trade Administration (ITA) thinks the camping grounds are fertile in some surprising new markets including China, the United Arab Emirates where demand is strong for high-end RVs, and Korea and Thailand, where camping is already very popular and being used to attract tourism from neighboring Asian countries.

Middle class incomes are rising in these and other emerging markets, and tourists are increasingly attracted to the American “RV lifestyle,” which in many of these countries is seen as a symbol of luxury and status. The ITA forecasts 2018 exports of $1.4 billion with a five percent annual growth rate.

RV exports updates

Paving the Road for Export Success

To pave the way for more exports of American-made RVs, the ITA is working to ensure other governments adopt favorable vehicle standards and road use and licensing regulations. Removal or reduction of import duties and reduction of high consumption taxes would make pricing of U.S. RVs more competitive in new markets. Redundant testing and certification requirements can also pose a barrier to U.S. exports if not addressed in trade policy discussions.

ITA brings foreign buyers to national RV trade shows to introduce them to U.S. vehicle manufacturers and component suppliers. Finding buyers, however, isn’t enough to grow potential exports. The industry and U.S. government are also working to stimulate investments at national parks and private resorts in new markets to build out campsite infrastructure including power, water, and sanitation hook-ups and expand rural roadways and parking to accommodate RVs.

China’s Market Might Get Cooking

China’s current Five-Year Plan for economic growth sets a goal of creating 1,000 RV campgrounds by 2020 to both “promote consumer spending on tourism and leisure activities” (and to support American competitors in the Chinese automotive industry).

Shanghai opened its first campground for RVs in October 2014 on Chongming Island and ITA reports that new campgrounds are springing up on a near monthly basis all throughout China. China’s city dwellers are catching on. RV camping is a great way to escape the congestion and smog of China’s cities while embracing the American coolness factor.

Chinese campers

RVs Support American Travel and Tourism Exports Too

According to the US Travel Association, international travelers spent $153.7 billion in the United States in 2016, directly supporting nearly 8.6 million U.S. jobs. On average, every $1 million in sales of travel goods and services directly generates nine jobs for the industry, which is adding new jobs at a faster rate (16.6 percent) than the rest of the economy (10.3 percent).

While RV manufacturers are chasing sales in China, the U.S. RV rental market is busy attracting Chinese tourists who want to see as much of the United States as possible on their holidays and do it American-style.

The opportunity is not lost on El Monte RV in Los Angeles, a company that caters to its growing Chinese clientele by offering instructional videos in Chinese, vehicles outfitted with rice cookers, and directions to conveniences like Chinese supermarket chains.

Overall, China is the #1 market for U.S. tourism exports (tourism sales in the United States are counted as a services export). The National Travel and Tourism Office calculates that Chinese visitors inject more than $95 million a day into the U.S. economy and that travel and tourism exports account for 65 percent of all U.S. services exports to China. Seems that great American road trip is increasingly a two-way road.

Download and share the full graphic.

Exporting the all-American road trip- RV

Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.
3PL

IN-HOUSE VS. 3PL: WHAT TO CONSIDER

Otherwise known as a third-party logistics provider, a 3PL is utilized by a range of businesses to support logistics and supply-chain management specifically as it applies to distribution and fulfillment services. Pre-1970s transportation contracts were comprised of the shipper (the giant retailers, wholesalers and manufacturers) and the shipping carrier. This all changed however with the introduction of an increased number of “sellers” to the market. These sellers didn’t count on logistics as part of their core competencies, and that produced what economists refer to as a “gap” (in the market). The 3PL jumped in to occupy said gap and the rest is history.

Major legislation passed in 2008 legally held 3PLs as responsible for the inventory they receive/hold/transport as the actual owner said inventory. Roughly 86 percent of Fortune 500 companies and nearly all (96 percent to be exact) of Fortune 100 companies use 3PLs today. 

Despite the high uptake of 3PLs, like most industries there are detractors when it comes to outsourcing order fulfillment. Some of the pros listed for keeping things in-house are:

-You understand your business at a level no third party could.

-Issues are easier to resolve.

-Change and/or minute-by-minute adjustments are more flexible and manageable.

Along the same lines, there are experiences with 3PLs that have left sour tastes because:

-Once a relationship is established and a contract signed with a 3PL, it can be difficult to exit.

-Relinquished control can be complex when it comes to deliveries and client relations.

-It can be difficult to communicate with external drivers/shippers or similar transport personnel in the field.

Of the above, the last point, communication with field personnel, is the principal sticking point. If order fulfillment is linked closely with 3PL transportation personnel, which in most cases it is, having a clear understanding of supervisory roles and what to do in the event of delays or poor communication is vital. Notwithstanding for the most part, the pros to working with a 3PL in a smart and effective manner far outweigh the cons.

For example, concentrating order fulfillment and similar tasks in-house takes up a tremendous amount of resources, which equates to more work and a larger staff. Many relationships, with the carriers most notably, are characterized by a disproportionate number of problems due to the complexity of the job, and it is also equally difficult to know if the rates one is paying in-house are truly competitive with what a 3PL can provide.

A 3PL can compare and select the most competitive rates due to a very wide supply of carriers. They, of course, have lower overhead costs and less staff overall is needed. Then there is perhaps the most compelling argument in 2019 for a 3PL relationship: the latest technology is always up-to-date.

With regards to order fulfillment, a 3PL provides an array of functions, but two areas stand out:

Warehousing

Many 3PLs maintain extensive warehousing facilities and especially when confronting the decision to invest and open a warehouse in a foreign company, a 3PL might make better sense. Granted, one does lose a bit of control not being able to oversee warehouse management processes, but it is likely that a 3PL with warehouse management experience in said foreign country would encounter fewer costly surprises than a new company in a given territory.

At a warehouse level most 3PLs run a warehouse management system (WMS). There is no “one size fits all” solution here as a WMS can be highly complex or as simplistic per firm needs. The value added with a WMS is shippers can access reports, track inventory and easily monitor progress. This is done remotely, of course, and most 3PLs that have an advanced WMS can seamlessly integrate it with enterprise accounting software or enterprise resource planning solutions.

Picking, Packing & Shipping

Once an order is placed or something needs to be retrieved or moved, picking, packing and shipping take place. This is where coordination meets timing meets client expectations. A wrong move will cost money and potentially a client’s contract. One of the more common mistakes that occur when trying to run a warehouse (in-house as opposed to using a 3PL) is if packing and shipping procedures are not clearly understood and/or if the company has little experience in this area, generating the appropriate labeling and being able to negotiate favorable rates with carriers such as UPS, USPS and DHL cannot be leveraged. An experienced 3PL in this instance is an invaluable resource to count on.   

Prior to transitioning into “things to consider” before choosing a 3PL, perhaps the best argument for their existence is technology related. A tech-enabled 3PL leverages the latest fulfillment software to streamline the flow of information, which saves time and automates nearly everything along the supply chain. Second, being able to split inventory across fulfillment centers via software integration and advanced analytics drives effective chains and reduces errors over the long term. No one firm can be an expert in everything and successful 3PLs invest in technology knowing that their clients simply do not have the time nor resources to do the same. They are rightly betting the 3PL will do that for them.

Things to Consider

Prior to embarking on a relationship with a 3PL in the order fulfillment arena, there are several issues that should be addressed:

-Can the 3PL commit to ongoing and irregular investments that will always be needed to keep up with augmenting capacity?

-Is it beneficial to commit to these investments on an ongoing basis?

-With seasonal drops or sales spikes, unplanned expenses generally come together: A good 3PL provider can manage these market fluctuations and protect businesses accordingly.

-Regarding handling, the amount of time spent handling special packing materials can be onerous: a 3PL provider can maintain consistency and decrease costs.

Specific Questions for the 3PL Provider

-How do you administer your accounts?

-Will I have access to your reporting data?

-Does the firm count on personnel with regulatory experience?

These issue areas and questions will help in the initial vetting process. Regardless of whether the firm chooses to stay in-house or contract a 3PL for order fulfillment duties, knowing what the other scenario that has not been selected will cost and look like is vital to any intelligent decision.