Huisman was already well-established as a provider of heavy construction equipment for the energy industry. But to better help its customers maintain their equipment in top shape and avoid any costly downtime, the family-owned company, founded in 1929, realized it needed to go digital — and in a way that was helpful to customers who were often out of internet access range.

Maaike de Rover, program manager, digitalization, Huisman

Going digital — enabling customers to order parts and service and view technical manuals from computer devices in remote locations at sea — makes Huisman’s products and services far more accessible and the company far more efficient and proactive in serving customers.

“The ultimate goal is to grow our business and stay relevant for our clients,” says de Rover, program manager, digitalization.

Moving toward predictive maintenance

Moreover, Huisman’s digital applications are putting its Services division into the position to “move from preventive maintenance to predictive maintenance,” she says, with online dashboards designed to alert customers when their equipment may be due for maintenance and new parts.

Headquartered in Schiedam, Netherlands, with worldwide production and service facilities, Huisman worked with digital agency Fenego to deploy the Intershop Commerce technology platform. Intershop, which launched its first ecommerce platform in 1992, “combines the functionality of a B2B shop with the user-friendly aesthetics of a B2C platform,” according to Martijn Reissenweber, director of Huisman Services.

But the new digital technology layout is “more DXP than just an ecommerce platform, it goes far beyond ecommerce,” says de Rover, using the letters for digital experience platform.

In addition, Huisman manages customer and financial data and product information with an Isah ERP system, a Windchill data management application, and Google Analytics. And it uses an image designing tool for displaying 3D product drawings.

To make the digital platform more useful for customers when outside of internet access, de Rover says Huisman worked with Intershop and Fenego to deploy the commerce technology as a progressive web application. That configuration lets customers continue to engage through various mobile devices with downloaded web content, including product and order details, account activity, and service records, even when they have poor or no internet access in remote sea locations, such as windfarm construction sites.

Vessel-mounted Huisman cranes at a windfarm construction site.

Engaging customers via myHuisman

Huisman’s digital strategy is to make it easier for its customers aboard vessels to order parts and technical services through the manufacturer’s new digital portal, myHuisman. The portal also lets them access a broad scope of technical manuals, 3D product images, and other resources with detailed specifications, place orders for replacement parts, and receive technical help online.

Personalized content and service was crucial for Huisman to maintain a helpful digital interaction with customers at different types of companies, regardless of where they were operating and their level of internet access, de Rover says. She notes that a typical cost of equipment out of service for maintenance or repairs can run $200,000 or more per day.

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“Our industry is based on relations and personal contact with people who may work 30-40 years for the same company,” she says. “So, before we started building this platform, I formed a customer advisory board … and the clients helped us build the platform.”

Among myHuisman’s features are:

• Dedicated parts shops for customers with highly customized equipment. “It’s quite important for them to know what specific items are available for their equipment,” de Rover says. For example, she notes that a 2,600-metric-ton leg-encircling crane can have over 10,000 serviceable items and parts available for purchase, and a customer can click to see all the parts that are available, the price and the order lead times.
• Access to a technical digital library of what are typically huge volumes of product manuals and documents related to the purchase and operation of Huisman equipment.

In the past, ships outfitted with Huisman cranes or other products would carry a full ship container stocked with paper manuals and documents. Next came CD-ROMs, which offered helpful 3D imaging used for maintaining and repairing equipment, but intermittent internet access limited their usefulness.

The new library available through myHuisman lets customers download materials online and use them with full interactive features even without internet access.

• An online services ticketing system, which customers can use aboard vessels to arrange to receive technical assistance from Huisman technicians and engineers. Customers can also check other users’ questions and their status and review Huisman’s recorded replies.

In some cases, a Huisman engineer will travel by air and water to arrive at a client’s vessel to conduct onboard service, but to limit the expense of such travel, Huisman has developed alternate remote support services using such tools as photo-taking drones and the enterprise version of smart glasses to share images of onboard equipment with land-based engineers and technicians.

Keeping track online of made-to-order cranes

Later this year, Huisman also expects to launch a digital file management system for keeping customers up to date on the status of customized cranes and other equipment as they’re in production. De Rover notes that the production process can take two to three years, making it difficult to regularly maintain, share and organize project documents with customers on typically highly complex, made-to-order products.

For Huisman’s largest and most ecommerce-mature customers, the manufacturer is also working on providing direct connections from companies’ enterprise resource planning or plant maintenance systems to the myHuisman web shop for fast and efficient ordering of products.

De Rover says there is a significant growth opportunity as Huisman onboards more customers to myHuisman for routine activities like scheduling service calls, freeing up its salespeople and account managers to spend more time on helping these companies match their needs to Huisman’s product offerings.

Sophie du Mortier, marketeer, Huisman

Going forward, Huisman is developing a technology application designed to let customers remotely monitor on myHuisman the construction progress of cranes they’ve ordered.

“Once they buy a crane, they can monitor their equipment’s complete production process,” says Sophie du Mortier, marketeer for Huisman. “Customers can collaborate with Huisman on design and test documentation. They will have full insights in planning. Transparency is key.”

Huisman is also developing a myHuisman online performance dashboard that enables condition-based monitoring, a method using information from equipment-embedded sensors to give customers information on required maintenance.

“They have a complete overview of the status of the equipment,” du Mortier says. “And we are working towards a servicing model in which we can use this data to provide operational advice.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Harley Finkelstein, president, Shopify Inc.

Harley Finkelstein, Shopify’s president, said on a Q4 and  year-end earnings call this week that the vendor’s B2B gross merchandise volume doubled last year. He added that, in the fourth quarter, Shopify’s business with B2B companies “was up nearly 150% year over year.”

Shopify did not immediately reply to a request for specific figures on B2B-related revenue and GMV, but executives said on the earnings call that that they see the B2B market playing an increasingly vital role in Shopify’s growth plans.

An ‘exciting’ B2B growth opportunity

Finkelstein — referring to B2B as a “big and exciting growth opportunity” — said Shopify is experiencing B2B market growth with two types of companies: existing Shopify retail merchants adding a B2B channel, such as The Home Depot, home furnishings retailer Lulu and Georgia, and jewelry retailer BaubleBar; and newcomers to Shopify like Carrier, a global manufacturer of heating and cooling and other building-management systems.

He added that getting a client company like Carrier, which signed on as a client in Q4, was “opening the door to a whole new opportunity of industries we previously didn’t serve.”

Jeff Hoffmeister, Shopify’s chief financial officer, added that Shopify is seeing more demand from large enterprise B2B companies for the vendor’s multiple technology offerings, including Shopify Plus, international B2B sales, online payments, and physical store point-of-sale systems that integrate with Shopify’s ecommerce platform.

“All those things are the growth engines for the future,” he said.

Shopify says its store point-of-sale terminal is designed to integrate with the Shopify ecommerce platform and support “over 1,000 physical stores.” Referring the POS systems as new “on-ramps or entry points into Shopify,” Finkelstein said they “substantiate our role as the unified commerce operating system for merchants, whether they come to us to sell online, off-line, or anywhere in-between.”

He added, “We are building on our commitment to help merchants sell to all of their customers from a single, unified commerce platform, with upgrades to our B2B offering, including headless B2B storefronts and support for sales reps.”

Among other new features, the ecommerce technology company has also launched for merchants on the Shopify platform:

• Shopify Bill Pay, an expense management tool that lets merchants pay their vendors directly from their Shopify administrative application.
• Shopify Credit, a “pay-in-full” business credit card designed to help manage monthly cashflow and earn cashback savings without paying interest or fees.
• Shopify Collective, an application that enables merchants to source products from other companies on Shopify and have them shipped directly to customers.

Perks of unified commerce and integrated POS

A unified commerce environment, including integrated POS systems, can play a vital role for B2B companies trying to keep up with omnichannel commerce that extends to their physical branches and other outlets, B2B industry experts say.

“Key aspects such as ERP integration, branch-selling, and tools that aid the end customer in their job are crucial for a successful B2B platform,” says Justin King, managing partner of advisory firm B2X Partners. “Shopify’s acknowledgment and incorporation of these elements, along with their significant growth in B2B GMV and the acquisition of B2B-only merchants, position them as a potentially formidable player in the B2B e-commerce technology sector. Their commitment to providing a unified commerce platform for both online and offline B2B transactions further solidifies their intent to capture and expand their market share in this domain.”

Jay Schneider, the founder of digital advisory firm B2BSquared, adds that the Shopify platform still needs to show that it can handle complex online B2B interactions, such as those involving displays, configurations and quoting of products with extensive lists of attributes and complex pricing.

Finkelstein said that Shopify generated $441 million last year from its offline offerings, including POS hardware, “more than five times what our offline revenue was just four years ago.” Shopify estimates its total addressable market for offline and B2B business at “over $450 billion,” he said, adding, “We have barely scratched the surface of this opportunity and expect it to be a key growth driver in 2024.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Albert H. Nahmad, chairman and CEO, Watsco Inc.

“In many respects, we consider 2023 an exceptional year given the extraordinary performance during the two preceding years and considering the softer comparative market conditions that have followed,” he said today in a Q4 and full-year financial statement. “We achieved market share gains during a down market, scaled the adoption of Watsco’s technology-leading technology platforms, drove productivity gains, expanded our network.”

Nahmad added during an earnings call that he sees Watsco — which he noted has grown from $1 billion in annual revenue 20 years ago to over $7 billion today — doubling its current annual revenue over the long term.

‘We’re very ambitious; we always want to grow’

“We’re never satisfied — that’s part of our culture,” he said. “We’re very ambitious; we always want to grow.”

He added that changes in the HVAC industry, including more efficient HVAC systems and greater customer participation in improved digital commerce and fulfillment technology, is making for a prime growth opportunity.

“Markets are creating innovation for the first time in a long time — it’s exciting,” he said on the earnings call.

The company noted several 2023 performance metrics resulting from its customer-facing technology systems.

• Watsco ecommerce sales grew 5% year-over-year to $2.4 billion, to about 34% of total sales.
• Active ecommerce customers produced 50% less attrition than non-ecommerce users.
• The gross merchandise value of products sold on Watsco’s OnCallAir digital sales platform for contractors increased 28% to $1.2 billion, as quote volume expanded 14% to about 256,000 households.
• Watsco’s authenticated user community for HVAC Pro+ Mobile Apps expanded to approximately 55,000 users.

Nahmad also pointed to several digital technology investments Watsco has made in the past year.

• Pricing optimization software, providing analytics and insights on more than 200,000 SKUs that help Watsco “enhance competitiveness and improve margins.”
• Warehouse management and order fulfillment systems for accelerated order fulfillment and “faster and more reliable customer service.”
• Demand planning and inventory optimization tools to improve fulfillment rates and inventory turns.
• Logistics and operations software and expertise to facilitate more efficient product movement.

Watsco is ‘well-positioned’ to invest in growth

Going forward, executives said acquisitions will remain a key part of growth.

“Watsco remains well-positioned to invest in most any-sized opportunity to build further scale in the estimated $60 billion highly fragmented North American HVAC/R distribution market,” the company said.

Since 1989, Watsco has acquired 69 companies. Its three most recent acquisitions are:

• Capitol District Supply, acquired in March 2023. It generated 2023 revenue of about $13 million.
• Gateway Supply Co., acquired in September 2023, which generated 2023 revenue of $180 million.
• Commercial Specialists, acquired this month, generated 2023 revenue of about $13 million.

As Watsco grows through acquisition, it will seek to gain market share by brands in each market it enters, Nahmad said.

Watsco operates a distribution network with 692 North American locations serving over 125,000 contractors across the United States, Canada, Mexico, Puerto Rico, and other markets in Latin America.

Watsco reported for the fourth quarter ended Dec. 31:

• Total sales grew 1% year over year to a record $1.60 billion.
• Gross profit declined 4.4% to $414.16 million for a gross profit margin of 25.8%.
• Net income declined 37.8% to $97.74 million.

For the full year, Watsco reported:

• Watsco ecommerce sales grew 5% year-over-year to $2.4 billion.
• Watsco ecommerce represented about 34% of total sales.
• Total sales were slack at $7.28 billion, compared to $7.27 billion.
• Net income declined 9.9% to $634.14 million.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Watsco report.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Half of all manufacturing CFOs (47%) say their organization will increase investment in AI or machine learning this year and at the same time prioritize their data maturity, says BDO.

“AI is more easily deployable for repetitive tasks where the variables are consistent, such as compliance and reporting,” says BDO. “The more complex an operation, such as monitoring physical machinery, the more AI needs to be trained to properly execute. However, the potential benefits of integrating AI into manufacturers’ physical operations are significant.”

Manufacturers balance feeding data to AI with cybersecurity concerns

While the use of AI across multiple parts of the organization will increase next year, many manufacturers are wary of sharing more digital data, according to the survey.

“As continuing global geopolitical conflicts intensify the risk landscape, cybersecurity remains a top priority,” BDO says. “As a result, in 2024 manufacturers will deprioritize building the digital thread and focus on internal information transparency and security. AI performs best when it has access to more data — but sharing data with customers and vendors opens manufacturers up to increased cyber and data privacy risk.”

In the future, many manufacturers will accelerate using AI applications in their production process.

“In addition to leveraging generative AI, manufacturers will use inputs from computer vision and other sensors to integrate AI with physical machinery,” BDO says. “These technologies should be closely tied to manufacturers’ business strategies and enhancing their value proposition to stakeholders, such as through enabling a safer work environment, improving service levels, or developing a cost advantage in the marketplace.”

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Today, the company said it took a significant step toward that goal by acquiring Radiance Commerce, an “enterprise-grade conversational commerce” platform powered by generative AI.

“Bloomreach is fully invested in an AI-driven future  ecommerce, and Radiance Commerce is critical in helping us bring that future to life,” Raj De Datta, Bloomreach co-founder and CEO, said in announcing the acquisition. He added that Radiance will help to further develop the Bloomreach Clarity “AI-powered conversational shopping” product and make it available to businesses worldwide.

Vikas Jha, Radiance’s founder, said the two companies are “perfectly aligned” as AI-powered commerce application developers to further the advancement of conversational shopping technology. Jha is listed on his LinkedIn page as vice president of engineering, conversational commerce, at Bloomreach, and the former CEO of Radiance.

The companies did not say what Bloomreach is paying to acquire Radiance.

Bloomreach’s other products include:

• Engagement, a marketing automation platform.
• Discovery, an ecommerce search application.
• Content, a content management system deployed with headless technology to make it independent of but integrated with the commerce engine.

Bloomreach has a client base of more than 1,400 global brands, including Williams-Sonoma, Bosch, Puma and Marks & Spencer.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Expectations behind manufacturer software spending

The topmost recent purchase for U.S. manufacturers spending on software was business intelligence and data analytics software. Among those manufacturers, 79% of businesses expect a positive return on investment (ROI) within 18 months of purchasing this type of tool, Gartner says.

But manufacturing companies also are not entirely happy about the digital software spending decisions they make, Gartner discovered. That dissatisfaction stems from various problems.

For example, half of manufacturers (47%) when spending on software say identifying the right technology is the most difficult when planning investments in new applications. That was followed by compatibility with their existing systems (44%).

Evaluating software purchases

It takes most manufacturers six months or less to evaluate and pick a new software tool. The vast majority create a list of potential vendors when looking for new software. Of those, 87% have five or fewer vendors on it. Meanwhile, 80% actively engage with only three vendors, according to Gartner.

The process of selecting and implementing new software can be complex and, unfortunately, not satisfactory for many manufacturers — 48% reported buyer’s regret from a recent technology purchase.

What manufacturers regret post-purchase

Manufacturer software spending regrets are often driven by higher-than-expected costs (38%) or implementation issues (35%). Poor functionality (34%) is another product-related factor that disappoints buyers. In these cases, they noted that the technology was often not advanced or had fewer features than needed, Gartner says.

When manufacturers were asked what they would have done differently to avoid regret when purchasing software, most respondents said better alignment of stakeholders was needed to clarify goals and requirements. This would include not only the software features they want, but also other needs such as cybersecurity.

Additionally, more extensive research is needed to create the initial list of vendors. Doing so may also help ensure the reliability and reputation of the supplier with a risk assessment, says Gartner.

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Kathleen Lewarchick

Some digital technologies arrive with fanfare while others enter quietly and become ubiquitous over time. Voice technology is one example of the latter. It gained momentum when developers and users began expanding their views of sound as part of multi-sensory engagement.

Voice activation was popularized by Google. They provided a “speech-to-text option” as part of their search functionality. And voice activation went from a quiet bleeding-edge technology (think OnStar) to a crescendo of widescale adoption as people began to use (and like) Google Assistant, Siri, Alexa, and others.

Making headway in B2B and B2C markets

It was only a matter of time before voice activation would become a powerful tool in commerce. Voice commerce, or v-commerce, is making headway in both B2C and B2B markets. Its technology twin, artificial intelligence (AI), complements and accelerates this trend.

There are obvious benefits, especially for those who are visually impaired or have diminished motor skills. There are also inherent risks, such as authentication and security. However, more and more voice commerce examples are appearing in the B2B market because of ease and simplicity.

One example is hands-free ordering. A facilities manager might be replacing dirty equipment during scheduled maintenance when he or she recognizes a missing piece. One option is to pause work, clean hands and record the part for an order later. The alternative is voice commerce on the job, where the manager pauses for a voice-activated ordering assist, and then quickly gets back to the maintenance job.

Here’s an example of a voice-commerce shopping experience where the buyer:

● Audibly requests items to be placed in a cart, as pictured here:

● Places the order directly through the integrated order management system.

● And receives system confirmation through voice (and visual) outputs, as shown here:

While there’s no guarantee that the part is in inventory, voice commerce enables the order to be placed hands-free at the direct moment of need.  Not only does this save time, but it may eliminate order errors if the order process is fully automated.

Essential to B2B business growth

Voice commerce, or v-commerce, is no longer on the horizon. Competitively advantaged companies are using it today to help customers save time and effort. And more users enjoy hands-free technology. It is likely that B2B use cases will only grow given the tight labor market and calls for improved productivity. Getting started on the journey of voice commerce is essential to maintaining your B2B business growth.

Kathleen Leigh Lewarchick is the VP of Marketing for Xngage LLC, a B2B digital commerce services company with more than 60 clients across the industrial trades. She is the former PURELL® Hand Sanitizer Brand Director, has co-created automated replenishment products with Amazon Business, and created telehealth solutions for a company that she later helped sell to CVS Health. 

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Holden Lewis, senior executive vice president and chief financial officer, Fastenal Co.

At the same time, Fastenal will use the data it compiles through digital channels to improve its ability to serve customers and operate more efficiently, Fastenal said yesterday in announcing its fourth quarter and full-year financial performance.

“The data that is created through our digital capabilities enhances product visibility, traceability, and control that reduces risk in operations and creates ordering and fulfillment efficiencies for both ourselves and our customers,” the company said yesterday in announcing its fourth-quarter and full-year 2023 financial performance.

It added: “As a result, we believe our opportunity to grow our business will be enhanced through the continued development and expansion of our digital capabilities.”

Fastenal digital channels

In a Q4 and year-end earnings call yesterday, Fastenal executives elaborated on the value of each of its digital channels — including its FASTVend vending devices and FASTBin product bins, each of which Fastenal embeds with digital technology to track product sales; and what Fastenal defines as ecommerce, including self-service online purchasing via Fastenal.com and electronic transactions conducted through EDI.

They also clarified during a Q&A period with investment analysts that the FASTVend and FASTBin services do not cannibalize Fastenal’s self-service ecommerce sales.

“The customers are looking for a range of solutions to solve different [purchasing] issues,” said senior executive vice president and chief financial officer Holden Lewis.

Fastenal Q4 and year-end results

Daniel Florness, president and CEO, Fastenal Co.

Dan Florness, president and CEO, noted that ecommerce sales have steadily climbed as a percentage of total sales, rising to about 25% in 2023 from about 5% several years ago.

For the fourth quarter, Fastenal said that all digital sales, including ecommerce and the FASTVend and FASTBin transactions — which in aggregate make up what Fastenal calls its “digital footprint” — accounted for 58.1%, or $1.02 billion, of $1.76 billion in total net sales. That’ s up  from 52% a year earlier. Fastenal didn’t break out total digital sales for all of 2023.

Fastenal also said that its digital purchasing options play a vital role at its Onsite vendor-managed inventory locations, which it manages at or near customers’ facilities. The company said it increased its number of Onsite locations by 12.3% last year to end 2023 with 1,822 active sites.

“We arm that Onsite with all the tools we have in place, whether it be vending machines or technology-embedded bins … it’s just a much more efficient way to operate,” Florness said on the earnings call.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Fastenal Co. report.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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This explosive growth forecast in digital B2B commerce over the next six years is good news for suppliers. However, it also underscores some significant changes. These include the ways B2B buyers will purchase digitally and how suppliers sell and market their products, according to the report.

Most important B2B ecommerce trends

In breaking down the shifts that will drive growth for B2B ecommerce, Merkle highlighted the following four trends:

1. The growing ubiquity of machine-to-machine commerce
2. Significant growth in ecommerce marketplaces
3. Increased speed to market for new products
4. Greater traceability, or the ability to identify and track the entire chain of sourcing, production, and movement of any product at any stage

When it comes to machine-to-machine ecommerce, Merkle predicts that by 2030, about one-third of all B2B ecommerce — or $8 trillion — will be made through machine-to-machine interactions, with no human involvement. The change will be driven by the integration of new technologies. These may include the Internet of Things, cloud computing, artificial intelligence and smart devices being integrated into sellers’ operations.

As users become more comfortable with these technologies, businesses will begin to allow machines to make decisions and transact with increasing independence. Areas ripe for this shift include commodity-like activities such as restocking supplies for a medical office. Brands already use software apps that automatically identify when inventory is low. In many cases, they send messages to other apps, asking for stock to be replenished. Amazon.com, for example, has developed its own shelving units and warehouse control systems. These systems autonomously reorder items when supplies run low, according to Merkle.

While B2B sellers have been deploying increased ecommerce technology in recent years, all the potential efficiencies and data insights such technologies can bring cannot be unleashed without interoperability among systems, which allows data to flow more seamlessly.

Merkle forecasts the potential value that can be achieved through interoperability can exceed $10 trillion in 2030 and that B2B applications will make up more than 60% of that value.

Digital B2B marketplaces will also play a significant role in the B2B ecommerce landscape by 2030. B2B marketplaces are expected to account for $12 trillion in sales in 2030, Merkle says. That comes out to about 50% of all B2B sales. In comparison, less than 15% of global B2B purchases took place through B2B marketplaces in 2023. During the same period, about 60% of B2C ecommerce took place through marketplaces, according to the report.

3 B2B marketplace trends in ecommerce

In its analysis, Merkle also assessed trends that will be relevant for B2B marketplaces specifically. These included the following:

1. Direct B2B ecommerce, or digital experiences and commerce platforms owned and operated by manufacturers and/or distributors selling directly to B2B buyers
2. Industry marketplaces that emphasize specific categories
3. Mega marketplaces offering diverse arrays of B2B products and services

One advantage to selling on B2B marketplaces is that they provide “an obvious on ramp to sales,” according to the report. For example, Alibaba’s 1688 marketplace operates in 20 countries, including China. It has average order values of more than $5,000 and over 10 million business accounts.

That kind of sales volume is grabbing the attention of investors. In 2022, the 10 largest privately held B2B marketplaces in the United States received more than $6 billion in private equity and venture capital investments, Merkle says. Venture capitalists’ interest in B2B marketplaces could prove to be a lingering trend. As that occurs, more small B2B suppliers could shift away from a strategy of building their own ecommerce sites. As they do, they may instead favor presences on marketplaces.

Some 66% of business executives across B2B categories plan to build a larger ecosystem of third-party sellers, service providers, and products, Merkle says. Aerospace manufacturer SE and Toyota Motor Corp., for example, have scaled global marketplaces for OEM parts and service across a large network of dealers, suppliers, and SKUs.

When it comes to how fast manufacturers can bring new products or services to market, Merkle expects artificial intelligence (AI) to play an increasingly larger role. By 2030, Merkle predicts that major changes in how brands design, test and deliver goods to market will accelerate speed to market by up to 300% across all industry categories, due to the influence of AI.

The role of AI

While AI itself is not new, its sibling, generative AI, is. Generative AI is artificial intelligence capable of producing text, images or other media. It commonly does so using models that learn the patterns and structure of their input training data. Those systems then output new data that has similar characteristics.

A key advantage of generative AI is that it enables brands to develop prototypes in hours. In many cases, the alternatives may take weeks or months. It can also aid the creation of personalized products on demand.

Generative AI also opens the door to creating digital twins. A digital twin is a virtual representation of a product or system. It may use simulation, machine learning and reasoning to help identify issues during digital product design, which ensures fast development time. Digital twins can improve a developer’s ability to spot potential problems during the development process by 80%. The global digital twin market is set to grow from $10 billion in 2022 to $110 billion by 2028, the report says.

Increasing focus on traceability

Finally, traceability will play a significant role in the development of B2B commerce by 2030. Traceability is the ability to track the information about a product from the procurement of raw materials to production. This occurs through the distribution channel, and finally to the end user.

Traceability will become important for manufacturers. That’s because without it, “reputational risk looms large for brands that cannot align their product sourcing and business practices to their customers’ values,” the report says.

With B2B buyers more aligned with the principles of traceability, and more likely to work for companies that reflect their views about traceability, it is more likely those buyers will demand to purchase “ethical goods” from their suppliers. In 2020, for example, there was a 24% increase in large-scale purchasers requesting environmental data from suppliers compared to 2019, according to the report.

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“We’re building a business model that the manufacturing industry has never seen before, and customers are beginning to harness the full potential it offers,” says Rob Bodor, Protolabs’ president and CEO. “In the third quarter of 2023 alone, revenue fulfilled through Protolabs Network increased over 80% year over year.”

“This is the future of the industry — manufacturing that is completely tailored to what customers need, when they need it, and at the price point they want,” said Pjotr Horowitz, managing director for Protolabs Network. “It’s exciting to be on the frontlines driving that evolution.”

Protolabs says it reached record Q3 revenue of $23 million in the Hubs network business, as Protolabs total revenue grew 7.1% to an all-time high $130.7 million.

Protolabs’ services include:

• Injection molding
• 3D printing
• Sheet metal
• CNC machining

CNC machining is a manufacturing process in which pre-programmed applications dictate the movement of factory tools and machinery. The process enables three-dimensional cutting tasks to be accomplished in a single set of prompts.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Protolabs update.

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Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at mark@digitalcommerce360.com and follow him on Twitter @markbrohan.

The post Protolabs rebrands its digital manufacturing network appeared first on Digital Commerce 360.