Italian B2B: challenges and opportunities in Covid times
The Covid emergency has transformed our experience as consumers, employees, citizens and people: the crisis has changed consumer choices, accelerating massive structural transformations within the Italian business structure. Some describe this phase as “the most serious economic crisis since the postwar period”, and the data presented by various sector studies at the beginning of the pandemic seemed to forecast a negative trend for the Italian companies. According to a survey conducted by Confindustria at the end of April, 84.5% of the companies responding faced slowdowns on the demand in the domestic and / or international market; furthermore, following the issuance of the Prime Ministerial Decree of 22 and 25 March, 36.5% declared they had been forced to permanently close their business, while 33.8% had to partially close it.
Today, after having faced a semester full of uncertainties that have upset the existing balance, it is time to take stock of what happened and ask ourselves which solutions can be applied to relaunch the Italian business economy, especially for all those companies belonging to the B2B markets – more strongly affected by the crisis. In a very short time these companies had to reinvent themselves , trying to give a new shape to their business to ensure its survival. Adaptation to the demand change and the identification of new growth paths, adapting to the digital market (often unfamiliar to most Italian SMEs) have been a tortuous path along which several obstacles have arisen.
Which problems have Italian B2B companies faced?
- Weak Internet networks – IT infrastructures have often not withstood the shock wave given by smart and remote working, continuous phone calls, streaming services pushed to the limit. This has caused a weakening of one-to-one communications, a valuable element for the business relationship and B2B sales
- Little or absent employee training – in a short time, thousands of workers had to manage their work from home; many of them, however, did not have IT facilities and spaces suitable for smart working in their homes. This is often exacerbated by a lack of competence and knowledge of online tools. This highlighted the absence of digital training plans within companies, as well as the lack of habit of the agile work
- Online implementation – for the first time, many B2B companies have been forced to ask for help from some eCommerce platforms. The companies themselves and their stakeholders have often encountered difficulties: firstly due to the lack of development of their own websites and management systems for this kind of sales channel, secondly due to a lack of skills in B2B purchases via web platforms
- Lack of PPE – 19.6% of entrepreneurs felt uncomfortable beacause of the lack of essential health material for carrying out work safely in their companies. This has forced many of them to delay the return of their employees to the office, often experiencing slowdowns in productivity
- Fairs and events deleted – despite the reinventing of the event sector (online fairs, streaming or pre-recorded conferences, etc.), many fundamental meeting opportunities for the B2B sector have been deleted, reducing the opportunity of commercial vis-a-vis communications
Analyzing the lockdown from a social point of view, however, it must be recognized that the block imposed by the quarantine has led us to develop a new mindset and an increased ability in relationship. The need for a new dialogue with people, especially between companies that do not address the consumer, becomes a fundamental pivot of the new “doing business”.
Which solutions can B2B companies implement to adapt to this “new normal”?
- The primary role of human relationships – we should remember that the buyer of products and services are first of all human beings. We constantly interface with physical subjects, who will then make decisions for the company they work for; people must therefore be at the center of the relationship between one company and another. A radical change of perspective is needed: from being a company that wants to sell a product or service to a company that wants to help a person choose the best supplier they can trust
- Marketplace support – during the emergency period, many B2B companies turned to digital operators, who were able to adapt effectively to the sudden change in the supply system. B2B buyers and sellers need large volumes of product, at the lowest possible price and quickly. And these conditions are made possible by the marketplaces, which, having become real search simplifiers, are able to concentrate traffic volumes and extend their offer to an extremely important user base
- Diversification – B2B companies with a strong geographic and category concentration (buying or selling) were the most exposed to risk during the Covid crisis. Diversifying your product categories, reference markets, supply channels, breakthrough channels or commercial partners can be a real turning point for your business
- Opening up to digital – the Digital B2B Observatory of Politecnico di Milano estimates that B2B eCommerce in Italy is worth 410 billion (+ 14% compared to the previous year). Covid has brought a boom in social customers, and this requires a digitalization of the commercial offer. This step allows you to overcome spatial and physical operational constraints, as a digital product not only overcomes any restrictions on physical movement but is also infinitely replicable. Digital therefore is an indispensable tool for guaranteeing business continuity, as it allows both to carry out business processes and to make new services and business opportunities possible
- The strategic function of B2B logistics – traditional Italian SMEs, linked to still very rigid business models, tend to rely on slower and less flexible supply chains. It is now urgent to rethink the management of warehouses and the distribution flow, in order to be able to respond to order preparation with much more agile delivery times and with a whole series of typical features of eCommerce logistics, which will have to coexist with the classic palletized preparation. The requirements for tomorrow’s logistics are very different from those of the previous years: flexible and smart solutions will be required in all steps of the supply chain, with a powerful IT infrastructure for an optimal management of the entire delivery process
Bridging the gap that the emergency has caused, with all the necessary safety measures, is a primary objective. The aim now must be a rethinking of habits, collaboration, strengthening of the relationships with customers and stakeholders. To support this process for B2B channel is also important the business digitalization and the choice of a logistics that adapts to the new distribution needs.
Data sources:
www.osservatori.net
www.accenture.com
www.digital4.biz
www.confindustria.it
www.italiaoggi.it
www.escagency.it
www.innovationpost.it