Leveraging B2B ebusiness solutions in your business is a requirement, not an option, for most businesses today. Trends in buyer behavior and expectations along with the opportunity for value creation through ebusiness initiatives combine to create a compelling case for businesses to redefine their B2B ebusiness strategy and increase their investment in ebusiness solutions.
Trends in Buyer Behavior
According to Forrester, B2B ecommerce sales will top $1.1 trillion, doubling B2C sales, and account for 12.1% of all B2B sales in the US by 2020. During this same timeframe Gartner estimates the growth in B2B ecommerce will continue at a 15% rate.
Underlying these eye-opening numbers are trends and expectations that business buyers have as they complete their purchasing decisions:
– In 2015 53% of buyers preferred to do their product research online vs. interacting with a sales agent and by 2017 that number grew to 68%
– Nearly 75% of B2B buyers now say that buying from a website is more convenient than buying from a sales agent. Further, 93% say that they prefer buying onlinerather than from a sales agent when they’ve decided what to buy
– Buyers have become very familiar with the B2C purchasing experience and expect to have a similar experience when making work-related purchases. This includes robust content that they can research on their own before making the buying decision. It also includes product ratings, access to relevant complementary or alternative products, and simplified shopping cart and payment checkout capabilities
– Omni-channel – Buyers expect to be able to use their preferred channel when purchasing from your company including using a website, mobile device, or working directly with a sales agent. In addition, they expect to able to switch between these channels interchangeably, perhaps starting with the website and closing with an agent, without missing a beat
These trends require that B2B companies, particularly those with traditional sales organizations, rethink their sales processes and how they interact with prospective and existing customers. In addition, this shift in buyer behavior opens the door for new types of on-line competitors, such as Amazon Business, which could significantly change the competitive landscape for many B2B companies.
Ebusiness vs. Ecommerce – In general, ecommerce (electronic commerce) solutions use a website and the internet for transactions such as buying products using a credit card, banking transactions or on-line reservations. In contrast, ebusiness (electronic business) is a broader concept that encompasses ecommerce as well as a range of additional value-add activities such as sharing business information via a portal or completing system-to-system integrations via EDI.
Amazon Business – Capitalizing on Buyer Expectations
These trends are powering the explosive growth of Amazon Business, a B2B marketplace that was launched in April 2015. If you haven’t heard of Amazon Business and you sell products through a distributor or dealer network you should take a closer look at their business model. In its first year of operation Amazon Business sales hit $1 billion and they are growing at a month-to-month rate of 20%. Over 9 million business products are offered through their marketplace across a broad range of categories. Just like their B2C platform, Amazon Business provides familiar features such as powerful search capability, product ratings, and comparison shopping. They also offer a range of features targeting corporate buyers, including free corporate accounts for an unlimited number of buyers, quantity pricing, prime shipping, and system-to-system purchase order integration. By offering a platform with features that business buyers are expecting Amazon Business is poised to impact B2B companies as dramatically as they have B2C.
Even if you aren’t feeling the immediate impact of Amazon Business, or any number of very strong on-line distributors (e.g., Grainger), B2B companies should be looking closely at how these trends will impact the way they interact with customers and begin to plan for fundamental changes in their sales channels, sales organization skillsets, and compensation models.
Opportunity for Value Creation
B2B ebusiness solutions directly support common strategic goals and are proven to offer compelling value to companies. To demonstrate this, several examples of typical strategic objectives are provided below, along with some ideas of how B2B ebusiness solutions can support each objective.
Increasing Sales – Exposing your current customers and prospective customers to your full product catalog is a strength of B2B ebusiness and a necessary activity to capture more of your customer’s spend. This includes the ability to provide deep product content on your corporate website, offer on-line sales through an ecommerce website, and deliver relevant and targeted promotional messaging through email marketing. An ecommerce website also increases your average order size with effective cross-sell and up-sell capability.
Improving Customer Service – Ease of access to product content, order status, and shipping status information is another strength of B2B ebusiness. This information can be delivered via a secure customer portal commonly found with many B2C businesses. These portals can also be used to give customers self-service capabilities for their account information and preferences. 24×7 access to this type of information will augment your customer service team’s capabilities and greatly enhance your customer’s experience with your company.
Increasing Customer Retention – Improving customer retention can be supported through ebusiness initiatives by offering “sticky” features. Building a system-to-system integration with your customer decreases their costs to do business with you and can automate (lock in) the re-order process for your products. The ability to offer on-line loyalty or rewards programs through a customer portal is another way to keep your customer’s interest.
Decreasing Costs – Reducing inventory is a significant goal for most companies and ebusiness solutions with your customers, suppliers and supply-chain partners support this goal. On the customer side the ability to easily receive and consume a forecast can increase the accuracy of your inventory replenishment orders. On the supplier side the ability to automatically drop-ship product from your supplier to your customer is enabled by transaction integration. By using a partner portal you can work with your supply-chain partners to improve visibility to in-transit materials and better react to issues such as customs delays.
The value from ebusiness solutions can increase your top line growth, improve your customer retention, and decrease costs. These are all compelling reasons to take action but may not be the most important reason to establish a B2B ebusiness strategy. Effectively addressing the changes in customer expectations and the potential for new competitors could make the difference between growing and thriving as a business versus being out of business. If you think this statement is too dramatic you only need to look at recent history in the B2C space to understand the disruptive potential of ebusiness in general and ecommerce specifically.
Deciding to take action with your B2B ebusiness strategy is a first step in the process. The next two parts of this article will establish a foundation for what’s possible with ebusiness solutions and review the drivers and barriers that should be considered when developing your strategy.
This is part 1 of a 3 part article. In Part I (B2B ebusiness Strategy – A Call to Action) a number of current trends and examples are provided to highlight the need for B2B ebusiness investment. Part II (Defining a Full Spectrum of B2B ebusiness Solutions) provides a list of ebusiness solutions along with some insight on how the solutions might apply to your business. Part III (Drivers and Barriers) reviews the drivers for creating a B2B ebusiness strategy and how to recognize and overcome common barriers.