stock worker in  front of a wall  of  identical boxes stacked high in a warehouse
PHOTO: Nana Smirnova

Disruption was the theme of 2020 for all of us and manufacturers were no exception. The pandemic and economy forced organizations to pivot to digital channels and quickly devise new ways of engaging customers. Not surprisingly, some of those changes are here to stay. The new emphasis on digital purchasing and rising customer expectations for digital experience give manufacturers some opportunities to grow revenue and build customer loyalty. Here are five CX trends for 2021 that manufacturers should consider.

1. Disintermediation: Invest in D2C

Before 2020, brands were slowly moving toward more direct-to-consumer (D2C) selling. Now brands are seeing their retail channel partners struggle and go out of business due to pandemic impacts, and the value of a direct connection to consumers is much more immediate.

Consumers are embracing D2C, too. At the end of 2019, 40% of US consumers said they’d made direct-to-consumer purchases. Their top reasons were cost and free shipping.

Some high-profile consumer brands have sent very clear messages to the marketplace, including to Amazon and other retailers, that they are pulling back from selling through their channels in favor of selling directly to consumers. One major fitness brand recently projected that 50% of its total revenue will come from digital channels in the next few years.

With consumers on board and money to be made, what’s holding manufacturers back from D2C? In some cases, brands are concerned about the effect D2C could have on their relationships with existing vendors. To avoid competing with retail partners, develop unique D2C offers. For example, a nutritional foods manufacturer that sells by the pallet to retailers must offer smaller-quantity packaging for D2C. That change in quantity requires a rethink of pricing and marketing as well, to give consumers a reason to buy directly from them.

Related Article: Is It Time for Your Brand to Add a D2C Channel?

2. Online Marketplaces: Offer the Right Products

While D2C can make sense for many manufacturers, the marketplace model may be losing its appeal to some. We’re seeing some concern among brands that hosting a marketplace where buyers and sellers come together may compete with their D2C offerings or make it hard to compete on value instead of price.

One possible option for brands is to use the marketplace to sell their excess and older inventory that doesn’t compete with their retail and D2C offerings, while also inviting other sellers in to generate revenue from third-party transactions. This approach isn’t for everybody, but for organizations with surplus products on hand and a large enough segment of customers that shops on marketplaces, it may be a workable option.

3. Servitization: Add Value by Selling Solutions

Customers have more channels to shop in. As a result, both B2C and B2B manufacturers face the possibility that their products become commoditized. That trend can push brands to compete on price instead of value.

One solution is to add value by bundling services with products. For example, some original equipment manufacturers are now offering maintenance as a service for customers who purchase their machinery. This “servitization” of products generates more revenue for manufacturers and adds value for their customers.

This approach requires data generated by internet-of-things technology, such as sensors that monitor motor vibrations to let manufacturers know when a piece of equipment needs service. This can reduce customer downtime due to equipment problems and allow customers to schedule repairs at the least disruptive time of day.

Related Article: Where the IoT Is Already Impacting Customer Experience

4. Data Monetization: Sell Data as a Product

The data that manufacturers collect can also be a product. For example, some transportation brands are doing this by installing internet-of-things devices on their vehicles. They can then sell their customers data subscriptions that help them automate their record keeping, increase fuel efficiency and track vehicle conditions. In effect, this approach takes a commodity — a truck, for example — and turns its data into a tool for the customer’s continuous operational improvement.

Only one in 12 companies was monetizing their data as recently as 2018, but we will likely see more and more organizations wrapping ongoing services around their products this way, to create revenue and build more valuable relationships with their customers.

5. Loyalty and Personalization: Focus on B2B CX

The data that manufacturers collect and leverage to serve customers can also personalize the customer experience. B2C commerce has led the way in using data to identify customer personas and create individualized experiences to engage customers along their journeys. Now, B2B customers increasingly expect the same level of personalization — and they’ll be more loyal to brands that deliver.

As with some of the other trends to watch in 2021, the demand for personalization has accelerated because of the pandemic. That’s especially true for B2B manufacturers that are dealing with prospects and customers digitally instead of face-to-face in the field. This year, more B2B customers have been coming to suppliers’ websites and discovering that the experience didn’t live up to their expectations.

However, manufacturers can use data to create a seamless experience that recognizes customers across digital channels — social, email and web. To do this, you need an understanding of your customer segments, what they want to do when they arrive at your website, and what services they may need to support the products you sell. When you can tailor valuable, easy to understand offers to each visitor — and follow through on those promises with results — you’re on your way to delivering more engaging experiences and building customer loyalty for 2021 and beyond.

Related Article: Amazon Business Is Coming for You, Distributors

Review Your CX Plans for 2021

Loyalty and personalization improvements are just one way to cater to customers in the year ahead. Reaching them with unique offers through direct channels, possibly offering surplus inventory on marketplaces, bundling services with products, and offering data as a product can help you generate more revenue while meeting customers’ changing expectations for buying online.