The B2B industry needs to think hard about a digital strategy if it wants to keep pace with the exploding eCommerce market.
Growth expectations used to be assessed by the number of brick-and-mortar stores a company planned to add. But the new growth story is the eCommerce website. With its monumental footprint and consistent success in new markets, everyone is looking to create an experience the consumer wants to see — the ultimate personal shopping experience. Sound like every business-to-consumer (B2C) company in town? Over the past 2-3 years, a similar shift has occurred in the business-to-business (B2B) space.
The hyper-connected consumer who surfs the Web from their smartphone and looks for updates on their tablet, even after sitting in front of a computer screen all day, is the same person browsing your site looking for the supplies their company needs to operate. This is also the same consumer who has become accustomed to the dynamic, feature-rich and multi-channel experiences in the B2C world.
Every B2B customer is also an experienced B2C customer. No longer can B2B eCommerce consist solely of basic order fulfillment. While the purchase is in different context, they’re still looking for an experience that makes the process more efficient and more akin to the experience they might have shopping on Amazon, or other B2C sites — an experience that encourages more consistent, recurring and even increasing purchase qualities.
The state of B2B eCommerce
Currently, the sale of B2B goods accounts for 91 percent of all U.S. eCommerce. According to Forrester’s most recent forecast [i], U.S. consumers are expected to spend $327 billion online by 2016, up 45 percent from a projected $226 billion in 2012 and 62 percent higher than the $202 billion they spent in 2011. This trajectory represents a powerful shift.
Payment provider PayPal records US $10 billion [ii] in daily mobile transactions and Forrester has observed that tablet ownership is registering a compound growth of 46 percent per year.[iii] Statistics such as these provide critical insights into the course of commerce growth and paint a compelling picture of the new breed of consumer — agile, highly informed and able to shift effortlessly between devices.
More recently, major manufacturers are beginning to see the benefits of these board-level ecommerce decisions. In fact, global giant Grainger recently announced a record year online, having boosted web sales to $2.7 billion, up 23 percent compared with just one year before. And it doesn’t stop there — the company plans to continue to build their online channel and anticipates it will represent 40 percent of global sales within the next few years [iv].
With few exceptions, B2B commerce continues to lag behind consumer eCommcerce in robustness and functionality. Although many companies are already doing billions in online sales, their ecommerce efforts are outdated and causing growing cost deficiencies.
In order to successfully increase online sales, B2B companies must utilize efficient processes, shift their thinking and source additional parts of the market. Making a decision to become fully invested in eCommerce allows businesses to have a well-planned digital strategy and see the true benefits.
1. Shift the thought process — Online eCommerce doesn’t represent just an opportunity anymore. It represents a need in the industry on both the end of the buyer and the seller. B2B manufacturers must represent a fundamental shift in the buying process.
While B2B organizations were aligned by product or channel in the past, they’re now run by the customer, who is now at the center of delivery and driving sales. The question for manufacturers is now how to leverage sales and online platforms in response to what they do in the business. In order to drive success, organizational change management in the effort to spur evolution of the traditional sales channel and product-focused systems must take place.
This can be accomplished a number of ways. The eCommerce efforts can be broken-off and a new company formed. Or, as some major manufacturers are doing, an internal specialized team consisting of the best and brightest from each division within the company can be formed to lead the shift, transforming the business over time.
2. Utilize efficient systems — With many companies still operating the equivalent of Web 1.0 platforms, they’re prevented from sourcing new market opportunities and have yet to push into mobile or build a community through online channels. New, updated 2.0 platforms and experience-driven commerce solutions allow for more cost-efficient and user-friendly capabilities.
3. Take advantage of new market opportunities — These changes present new market opportunities. By addressing the shifting business model and putting better systems in place, new market opportunities exist. Connecting with new buyers is still challenging online, but by being more efficient the cost is less, allowing for more time and money to go from keeping up to pulling ahead.
To stay competitive and attract recurring customers, the ability to offer both efficient buying and meaningful browsing experiences is paramount. Simply put, if B2B companies continue to be stuck in the stone-age, the world of commerce will move on without them.
[i] Forrester Research report. “U.S. Online Retail Forecast, 2011 to 2016,” by Sucharita Mulpuru. February 27, 2012
[ii] Mobile Marketing Watch post, “PayPal to Reach 10 Billion in Mobile Transactions for 2012,” by Michael. July 19, 2012
[iii] . Forrester Research report. “Tablets Will Rule the Future Personal Computing Landscape,” by Frank Gillett. April 23, 2012
[iv] . Moore, Stefany. “W.W. Grainger boosts web sales 23% in 2012.” Internet Retailer 29 Jan. 2012