Distributor Driven Commerce — enabling e-commerce for MedTech industry
MedTech needs to go Digtial!
The $550 Bn MedTech Industry needs to go digital. With US, EU & Japan contributing to over 75% of the sales with a CAGR of 1–2%, it needs to focus on the demand markets which are growing at a CAGR of 10–15% and fast.
There is currently a lack of choice available to these growth markets and there is a growing demand for options amongst doctors, hospitals and patients.There is a lag of almost 10–15 years before a product or a service launched in the developed markets makes its way to the developing markets. This lag needs to be addressed. Its impossible to do that in the traditional way which requires very expensive sales, distribution and marketing infrastructure to be set up first before companies start seeing results. Digital medium can minimize investments and reduce time to market.
Distributors — Vital cog in MedTech value chain
Distributors play a strategic role in the $550Bn MedTech Industry’s value chain by offering last mile connect for marketing, sales promotions, demos, installation and service, carrying inventory and channel financing with credit facilities to customer.
Digital medium is playing a big role in improving customer service by offering convenience of procuring online, customized product and price offerings to suit the customer buying behavior and also opening up a direct channel of communication with the OEMs.
Company e-stores, online marketplaces and aggregators are slowly but surely stepping on the distributor domain.
Digital medium today contributes less than 5% of the total revenue share of a MedTech company. The rest are brought in through the offline sales and distribution structure which is in direct conflict with the digital medium.
Potential Channel Conflict with current e-commerce tech.
The current set of technologies in areas of customer engagement, commerce and service are organization focused thereby alienating the distributor network from playing a collaborative role in each of these areas. This has given rise to problems that have prompted companies to slowing down in digital adoption especially in e-commerce.
For e.g. consider the most common approach ecommerce is adopted. An OEM sets up an ecommerce store in their home country and ships with an ex-works price-list.
Their distributor also sets up an e-store under their own domain and/or lists the products on a marketplace like Amazon with a local pricing.
This creates a conflict as the impact of transport, customs duties, clearance costs and distributor margins are overlooked during price comparisons. It often appears that the local pricing is not endorsed by the OEMs resulting in customers bypassing the distributor and later facing service issues because distributor is not incentivized to provide support.
- Technology limitations mean having to create new structures to adopt digital commerce
- Channel conflicts over sales cannibalization, lead ownership, product catalogues & pricing
- Lack of standardization of product catalogues & pricing across channels
- Parallel Tracks for customer engagement creating confusion
- Dilution of digital marketing efforts
We believe that the next biggest disruption in e-commerce tech is the one that enables collaborative communication, commerce and service between the company, its distributors & customers.
Technology adoption needs to shift from being focused at an Organization level to Network level for successful adoption of digital commerce in MedTech industry.
Supply Chains need to reinvent themselves for e-commerce 3.0
We at Atto are trying align existing supply chains to e-commerce 3.0 through our proprietary Atto micro-store technology.
While e-commerce 1.0 largely meant owned inventory & logistics play with each of the players having to invest heavily in creating their own ware house & delivery infrastructure to ensure customer delight, e-commerce 2.0 has seen more of 3PL (3rd party logistics) players filling up the gap between well invested incumbents and new players.
While more and more enterprises with existing sales and distribution networks look to onboard the e-commerce bus, they are looking at technology that can help them seamlessly serve offline and online customers without too much of a disruption to their offline structures.
Atto StoreFront — The solution of choice for MedTech Industry.
Our proprietary technology allows enterprises to digitize their distribution partners and enable them for online order fulfillment, inventory management & payment collection.
Atto StoreFront enables Offline — Online Hybrid Digital Strategy by ushering in Distributor Driven Commerce
Atto micro-store technology allows companies to create a unique store identity for the distributor by defining the geography (country / region / city / zip-code), product catalogue, pricing and offers for the store. This micro-store would be managed by the distributor by regularly updating active inventory, order processing. Payment gateways / order workflows can configured at the distributor level.
The company would operate an aggregated store of active micro-stores across the globe. Inventory, order and store metrics at a distributor level can be monitored by the company.
Atto StoreFront — A wide spectrum solution!
MedTech industry can be broadly classified into Medical Equipment, Implants & consumables has over 1800+ product sub categories. Based on technical complexity, buying behavior and price point, different product categories require a different marketing, sales, distribution and service approach.
Imaging products require a completely different set up as compared to ventilation, surgical instruments to implants. Within Implants, orthopedic implants have a different sales approach to cardio vascular.
Atto StoreFront allows MedTech companies to incorporate workflows across the supply chain to digitize transactions and information flow.
So if its a global leader in diabetes management trying to sell prescription controlled devices and consumables online to patients via existing distributors and help patients meet their therapy goals or a leading German diagnostics company wanting sell to GPs and medical students through their distributors globally via an online store or implants companies wanting to optimize their GTM, track inventory across the supply chain, automate replenishment and gain visibility into consumption, Atto StoreFront is enabling digital commerce in each of these cases.
Atto StoreFront enables rapid roll out of e-store managed by the company but operated by existing distributor network in B2B and B2C environments. Here are some of the benefits of adopting Atto StoreFront -
- No channel conflict. Offline structure can support online sales as there is no cannibalization
- Improved primary sales — Visibility of active product catalogue and inventory at distributor level and enforcement of distributor SLAs.
- Improved secondary sales — Improved catalogue visibility, localized order fulfillment and access to promotions
- Customized pricing, promotions and loyalty schemes to improve customer retention
- Improved distributor performance
Atto StoreFront & Atto micro-store are proprietary technologies of Atto Innovations. To know more visit attomarket.com
