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Manufacturers around the US are digitizing at 2x the rate of other industries. Here’s why you should, too

Written by John Caplan, President of North America and Europe at Alibaba.com, for Forbes

On the cusp of change even before the pandemic, manufacturing as a whole is now digitizing at twice the rate of other businesses, according to a new Alibaba.com US B2B Small and Medium Business (SMB) Survey. According to the results, manufacturers' online B2B trade increased by 8%, which is twice the rate of the overall 4% increase in all industries for the same period. For context, that puts manufacturing on par with retail as the two industries with the most digital growth amid the global health crisis. This is especially notable because as of last December, US manufacturers' online B2B trade volume lagged behind all other industries except construction. As you've heard me say before, digitization is beyond important and critical to the success of SMBs, so this acceleration is indisputably positive and worth exploring.

In their rapid pivot to digital to cope with the challenges of the global health crisis, more than two-thirds or 68% of manufacturing businesses — of which 98.6% are small businesses and three-quarters have fewer than 20 employees — are demonstrating incredible resilience and gaining confidence, even hiring new staff to support online trade, compared with 56% overall.

Spotlight: NYC manufacturing goes digital

Nowhere is this grit more evident than in NYC, the city I've called home since I was born and one of the first to contend with a surge of the coronavirus. I've been spending a lot of time with owners of SMBs here, and am witnessing firsthand the insights and lessons of going digital today, which I am eager to share broadly to help inspire and empower other manufacturers who would benefit from such a move.

Recently, I spoke with Curt Anderson, a B2B ecommerce expert at B2Btail and author of "Stop Being the Best Kept Secret: Manufacturing eCommerce Strategies," who summed what's going on: "2020 has created a greater sense of urgency for digitization. The one word to take away is resiliency — the entrepreneurial manufacturing spirit is still alive, and people have come back with a vengeance. People are making that digital shift across the whole country."

It's a shift all companies are well advised to make to contend with COVID-related challenges, but also to reap an array of benefits.

In the Brooklyn Navy Yard, Michael Bednark, Founder and CEO of Bednark Studio, a vertically integrated custom fabrication company, found a solution to reaching customers digitally. Bednark told me: "When COVID hit, more than 70% of our business disappeared because our business relied on large gatherings and in-person events. So we pivoted to face shields — even though we'd never made a product before. We ended up getting a contract with NYC to create more than a million face shields. We were also tasked with helping bring NYC back to normalcy with Uber and Lyft car dividers. I realized very quickly that we needed to be able to better communicate with our customers, so we built a website using SquareSpace, then marketed through Instagram and Facebook, and built a scheduling app. Within eight days, we were getting 300 orders per week." Bednark's story saved his business and illustrates how critical it is for analog small businesses to digitize — of course, ideally before the situation becomes dire.

Survival is definitely not the only benefit of digitization. "Finding leads is our biggest challenge," said Bednark. "Finding marketplaces where you can get more reach is huge. We do some business in Canada and Mexico, and we're also working with city governments trying to figure out how they can COVID-proof public transit." Bednark is not alone. According to the latest Alibaba.com survey results, cross-border business has increased in importance for B2B companies, with international trade now making up an average of 25% of their business — that's an 8% increase from 17% last December. The shift to digital helps drive more cross-border trade, allowing SMBs to sell anywhere, anytime.

"I've spoken with so many manufacturers over the years, who would tell me that they're the best kept secret. I would tell them no, don't be a secret!" said Anderson. Being a secret isn't good for business. Leveraging digital to gain greater visibility and access in the marketplace leads to more leads, more sales, more growth. "Before the pandemic, manufacturers always asked why do I need to be online, why do I need a LinkedIn profile? I'm seeing manufacturers today understand that they need to move to the how — how do we go digital? They understand now that ecommerce is a 24/7 sales opportunity."

Here's the "Why?" Because digitization is no longer a nice-to-have, but a must-have for companies in every industry. In the words of Randy Peers, President and CEO of the Brooklyn Chamber of Commerce: "The most resilient small manufacturing businesses here in the borough are the ones that have upended their traditional business model and adopted new technologies and ecommerce, which positions them well for a post-COVID economy."

To answer the "How?" and help SMBs with no online identity scale their business, there are a number of organizations and resources available.

  • Alibaba.com recently launched a program called the Digitization Sprint for US Manufacturers, which is designed to accelerate the digitization of online marketing, selling, and sourcing to ensure long-term success. We're working with the Brooklyn Chamber of Commerce, Brooklyn Navy Yard, ecommerce expert Curt Anderson, and other collaborators to offer this four-week masterclass in getting digital and going global to qualified manufacturers at no cost.
  • National Association of Manufacturers, the nation's largest advocate for manufacturers, offers a series of pre-recorded webinars covering topics ranging from resiliency to keeping employees safe and well to integrating technology as well as state-specific resources to help manufacturers stay on top of ever-changing policies and regulations amid COVID-19.
  • B2Btail, an online resource of ecommerce insight from Curt Anderson, has a list of services to get your ecommerce journey started. B2Btail also hosts weekly interactive workshops to help companies dive deeper into their ecommerce strategies.

NYC has already come a long way in a short time, and the digitization of B2B companies is a major reason why. Companies around the country that haven't yet modernized their methods must do the same if they are to make the leap from surviving to thriving in the next era of business.


The Digitization Sprint for US Manufacturers kicks off today! The first two courses will cover:

  • Ecommerce 101 for US manufacturers: Curt Anderson, ecommerce manufacturing consultant at B2BTail, will teach participants about the current ecommerce landscape for B2B SMBs and provide a checklist of items needed to get started.
  • Digital marketing 101 for US manufacturers: Allison DeFord, Founder of Felt Marketing, will cover the fundamentals of digital marketing — email social media, and search engine optimization (SEO) and show participants how to set up these channels to target existing and potential customers.

Interested in being a part of the next Digitization Sprint for US Manufacturers? Sign up here.

This week's #B2BTuesday Tip:

Focus on cost is important, but focusing on your customer — and what will deliver the best customer experience — is the only way to achieve long-term growth.

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