Bloomberg Reports E-commerce Sales Replace Field Reps

NEW YORK — September 28, 2017 — In the recent Bloomberg article, “Death of the Salesman: Humans Lose as Computers Close Deals,” Michael Sasso discusses the trend of companies shifting from field sales representatives to e-commerce sales techniques. Sasso writes, “The automation wave that has displaced so many workers in manufacturing and data entry is hitting the nation’s sales force, particularly among ‘business-to-business’ salespeople who sell to commercial customers.”

Sasso reports that as customers increasingly prefer to do their purchasing online, companies are able to use digital analytics algorithms to target their customers and make sales without the use of a traditional sales representative. In fact, according to Andy Hoar, consultant and former Forrester Research analyst, a 2015 poll of purchasing managers found that 53 percent preferred to research their own orders online rather than deal with a salesperson. By 2016, the number had grown to 68 percent.

This means that using e-commerce sales techniques, companies are able to cut costs by cutting field representatives while still improving overall sales and customer satisfaction. Jonathan Bein of Boulder, Colorado-based Real Results Marketing explained, “If I just shed 15 field reps at $130,000 in total compensation, that’s significant. That’s a big improvement in profitability, so it’s a real incentive to do this.”

Sasso demonstrates that this wave of replacing salespeople with e-commerce is hitting across industries. He cites examples ranging from janitorial and food service suppliers to commercial and industrial distributors to software companies, all of which are cutting back on their sales forces. Sasso explains that “Particularly at risk are salespeople who essentially are order-takers, dropping by companies once a week to see how many industrial fasteners a manufacturer needs.”

Big distributors are putting their best field sales reps on just the top 10 percent of their accounts while the remaining accounts are handled remotely. Sasso points out that this means some salespeople will see their compensation go up as they serve only the most lucrative clients, but many others are at risk of losing their jobs.

Sasso assures readers that according to e-commerce consultants, “No one sees salespeople disappearing overall, and companies will continue to need knowledgeable people to sell complex medical devices and back-office software systems.” However, as more of the business of purchasing and ordering moves into the digital realm, traditional sales representatives across industries are likely to face increasingly fewer opportunities in their field.