The technology is here. The time is now. Everyone else is doing it. So, why is the chemical industry slow to adopt digital commerce? Why is the industry not adopting at the speed and scale seen in other industries? Among the many factors in play here, these are probably the most prominent:
Inherent Complexity Of Products And Supply Chain
Detailed specifications for each product and formulation often require technical sales. Add to it complex shipping, storage, and compliance requirements, and it becomes clear why a click-and-buy marketplace for chemicals is not going to be a simple solution to build or buy.
Suppliers’ Unease Over Disintermediation
The chemical industry runs on relationships that have been forged for generations. Chemical distributors are typically much more than product resellers—they add a tremendous amount of expertise and value-add services and have become an integral part of most suppliers’ business models. And while there are many examples of B2C industries where digital solution vendors have completely disrupted existing sales channels, we believe that the chemical industry would fare much better when presented with solutions that support and enhance existing channel partnerships, rather than try to destroy them.
The Daunting Costs And Effort Of Implementing Digital Commerce Channels:
For most chemical suppliers, the idea of designing, building, running, and maintaining an
eCommerce portal sounds like an insurmountable obstacle in terms of cost, effort, and required in- house expertise. They are often unaware of options to launch flexible, scalable, provisioned on- demand software solutions that adapt quickly to evolving customer needs and changing business models. Monolithic software solutions are a thing of the past, but chemical suppliers still tend to think of digital channels as large-scale, years-long IT projects that demand considerable upfront investments and ongoing maintenance.
For chemical suppliers who decide to embark on a digital journey, the choices often seem overwhelming. Should they build their own solution, buy a hosted, pre-built portal, or list their product catalog on a shared marketplace? While there are pros and cons for each approach, there’s evidence that the chemical sellers are leaning towards building or buying eCommerce portal solutions from specialized, industry-focused providers to launch digital channels at scale while preserving their own brand.
The post is taken from our recently published white paper Choosing the Best Digital Commerce Platform for the Chemical Industry. Click on the link for more insights regarding digital commerce transformation in the Chemical Industry and the options suppliers and distributors can choose from. Or subscribe to our newsletter to stay up-to-date with the latest insights from Agilis.
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