ECOMMERCE IN 2016: The Year of the B2B Customer

ECOMMERCE IN 2016: The Year of the B2B Customer 2016 is right around the corner. Business as you know it is about to change. In fact, that sea change has already begun. Manufacturers, distributors and other companies that derive most of their revenues through B2B channels are rapidly following their B2C cohorts, going digital, and moving complex operations to the cloud. We reached out to industry thought leaders everywhere to get their take on the biggest changes to expect in B2B eCommerce in 2016, changes so big they have the power to transform your business. The experts’ predictions all have to do with one important thing: the B2B customer. A customer-centric eCommerce strategy is the key to a successful 2016. Cloud technology, platforms, APIs and the rise of large integrated ecosystems are creating huge opportunities for businesses to connect their systems, and for developers to build modern eCommerce solutions for their business which move beyond the restrictions of the dinosaur in-house and on-premise systems of yesterday. On the eve of 2016, publications such as Fast Company, who just published their 20th anniversary issue, are documenting the ongoing shift of digital technologies and their impact on individuals, businesses and the world. Their first issue in 1996, written as if through the eyes of someone that had already seen the next 20 years unfold, was titled “Work is Personal. Computing is Social. Knowledge is Power. Break the Rules.” This too could be an apt title for our 2016 predictions below. Enclosed are our 5 predictions for the state of eCommerce in 2016: the Year of the B2B Customer $780 2015 2016 2017 2018 2019 2020 $855 $928 $999 $1,066 $1,132 U.S. B2B eCommerce Sales Forecast Source: US B2B eCommerce Forecast, 2015 To 2020, Forrester Research, Inc., April 2, 2015 B2B eCommerce sales increase in correlation with the rise of cloud technology, platforms, APIs and integrated ecosystems. The rise of Customer Experience and Mobile empowerment. Millennials take the lead! In 2016, you’ll find that your customer or buyer is increasingly the “mobile millen- nial”: younger, online and mobile. The millennial generation already represents the biggest portion of your customer base, with The Economist reporting that millennials occupy 34% of business positions in 2015 compared to 29% for baby boomers. 2016 will see further gains for this important and growing market segment. It may seem as if B2C marketers are the only ones who need to focus on millennials. That is not the case. Almost half of all online researchers in the B2B space are millennials and 42% of B2B buyers use a mobile device at some point during their purchasing process (source: Think With Google). The digital-first generation requires a seamless omni- channel experience, with 87% of them using between two and three technical devices daily (source: Forbes). Responsivity is important for the design, but also for the functionality. Consider mobile the ‘first screen’ for all of your marketing activities, including your website, your landing pages, to your checkout process, approval rules, and product search. 2016 Prediction #1 Forrester’s April 2015 B2B eCommerce Forecast showed that 74% of buyers already research at least half of their work purchases online. 2016 will show that trend continue to increase. Smart marketers everywhere will begin to make mobile millennials the primary persona around which they optimize their marketing efforts. The winner here is the customer. Finally, in 2016 we’ve hit the tipping point: B2B customers will enjoy the majority of the same spoils their B2C customers have been getting with mobile, customer-first technologies such as Netflix, Uber or Amazon. 30% 74% 56% Online Purchases by 2017 By 2017 56% of B2B buyers will complete at least half of their purchases online. Online Purchases Today 30% of today’s B2B buyers complete at least half of their work purchases online. Buyer Research Some 74% of B2B buyers research at least one-half of their work purchases online. Source: US B2B eCommerce Forecast, 2015 To 2020, Forrester Research, Inc., April 2, 2015 Mobile and Millennials could easily be two predictions, but they’re intertwined as they’ve come of age at the same time. For example, in 1996 a 56k modem was still common, and cell phones were the size of a brick and not yet anything but for having a conversation. But ask experts like Hans Vestberg, CEO of Ericsson Communications, about current state and you’ll realize how far the mobile pendulum has swung. “Today, there are 7.2 Billion mobile subscriptions, and only 2.9 billion people have broadband. By 2020, 90% of the world’s population will be covered by mobile broadband networks.” Globally the shift has been even more mobile, rather than traditional bandwidth driven. Mobile has empowered individuals everywhere, and your B2B customer, whether Millennial, GenX, or Baby Boomer, expects their work and personal life available on their phone and their tablet -- at all times, 24x7x365. Mobile continues to impact eCommerce, as smartphone and tablets continue to gain adoption across touchpoints in user’s experiences. 2014 was the first year when overall traffic on mobile devices outstripped desktop traffic. While initial adoption focused on browsing and exploration, in 2016 it must include con- version, such as ordering and product configuration. Responsive design is an absolute must at this point, providing a good user experience and feature set, regardless of the device that is accessing your eCommerce site. - Darin Lynch, CEO & Founder, IrishTitan APIs create new business speed, agility and ecosystems For businesses and developers alike, APIs are changing the way businesses buy and sell online. Before the dawn of the API economy, businesses had to wait to be able to integrate with other businesses until a partnership was established. Now, integra- tions are easier and streamlined, and time-to-market is light-years faster. APIs represent a new form of simplicity, which enables them to offer businesses a new level of speed. Instead of heavy integrations, extensive planning of processes and working every detail out with your vendor, developers are able to access only the data that they need. This simplicity creates an accelerated speed to market that the business world hasn’t experienced before. APIs give you the power to modify, edit, and customize applications as you go in an uncomplicated manner. The ability to create an application “on the fly” is vital in a constantly evolving business world that has customers at the center of everything they do. 2016 Prediction #2 APIs create a pathway for companies to support very unique business processes without having a strong reliance on any particular vendor. Instead, they provide a flexible interface for developers to take what they need, when they need it. Reliance on the vendor to develop certain functionality gives not only a lengthy timeline, but a lengthy invoice too - time it takes to implement, difficulties with upgrades, the list goes on. “The use of APIs will become more apparent — usage of APIs is directly tied to cloud software, and both are on the rise.” -Adam Roozen, CEO, Echidna In 2016, vertical business aggregators of all kinds (software companies, product aggregators, internet purchasing aggregators, professional associations, etc.) will begin to work on platforms to create highly specialized eCommerce ordering solutions for their clientele. All ERP and back-office software solutions will need to create and deploy an appropriate, open, responsive B2B eCommerce Solution that their customers can utilize for their specialized vertical businesses. -Mark Johnson, CEO, Four51 OrderCloud 2005 <10 2010 2,418 2015 14,135 Web API Growth 2005-2015 Source: ProgrammableWeb A great example that resonates with most of those with tenure in the manufacturing, or wholesale distribution space is Electronic Data Interchange (EDI). EDI is a common, nearly 30-year old integration method, very rigid in its approach. EDI provides standards for organizations to exchange data, provided they adhere to precisely the same, pre-specified, standards. Price Waterhouse Cooper, in their paper “The Consumerization of APIs,” noted how the modern REST API provides a significant leap in enabling integrations, with “Low complexity of integration” and “Loose nature of coupling.” Agile and continuous delivery finally meet architecture. Mobile, APIs, Internet of Things, predictive analytics, and other application styles proliferate; delivery cycles get shorter; and microservices decrease the size of each deployment while increasing the number of components deployed. - Forrester’s “Predictions 2016: Modern Development Goes Mainstream” November 19, 2015 2016 Prediction #3 Cloud Platforms drive down costs, and increase scale. In 2016, the “Digital Transformation” of business will continue to gain momentum and become a key item the majority of business IT Roadmap items. The rise of cloud, mobile and social computing has accelerated the need to put flexible software at the core of what organizations do. With the customer at the center of the strategy, busi- nesses will increasingly ditching servers in favor of cloud-based software. In the late 90’s it was referred to as the ASP (Applications Service Provider), and now newer versions of the “rent in the cloud” vs. “own on premise” are arising and becoming the nexus around which businesses are building their entire technical foundation. Salesforce pioneered this in CRM beginning in 1999 as Software as a Service, or SaaS, providing new scale and lower cost to businesses not wanting to own and update software on their own infrastructure. In 2016, newer cloud technologies, such as Infrastructure as a Service (IaaS), and Platform as a Service (PaaS) will become king. Both are enabled by the power of APIs described above. PaaS, specifically is becoming the choice of businesses need- ing their unique business needs filled, while avoiding inflexible SaaS interfaces, or expensive in-house systems. PaaS will become the preferred cloud technology as businesses realize the increased scale, connectivity and agility it provides--ultimate- ly creating significant economies of scale. Businesses are increasingly ditching servers in favor of cloud- based software. The rise of cloud, mobile and social computing has accelerated the need to put flexible software at the core of what organizations do. With the cloud, businesses are able to: • Automate internal processes, reduce costs • Speed-up processes to real time • Access increasingly large amounts of data now available for making business decisions • Make work mobile-accessible • Create efficiencies in legacy IT functions -Chip House, CMO, Four51 2016 Prediction #4 Traditionally, B2B companies have had one content repository for sales agents and a different tool/site for B2B customers to purchase. In the next few years, those two things will converge into a single B2B website — essentially, a one-stop shop for all constituents (including sales and distribution agents, and customers, and customer service agents). -Adam Roozen, CEO, Echidna Developers Garner Speed from Digital Toolkits 2016 unfolds massive adoption of “The Creator Economy.” Rather than focusing on the end product, businesses are increasingly focusing on the value delivered. Developers will begin to utilize combinations of 3rd-party tools, rather than modify source code, to increase the value of eCommerce solutions in companies. With a finely-tuned development environment, programmers are able to create highly customized and comprehensive business solutions faster than ever before. In 2016, you’ll see business’ expanding their development teams to take advantage of these toolkits to create B2B eCommerce experiences that fit their business’ unique needs, rather than being forced to stick to a pre-packaged solution. Your ability to get to market faster will be the new reality, further improving your ability to make updates and improvements based on your buyers’ behaviors. Especially when paired with PaaS, expect that software development kits (SDK’s) and feature-based components will become indispensable tools for modern developers. By 2017, over 50 percent of organizations’ IT spending will be for 3rd platform technologies, solutions, and services, rising to over 60 percent by 2020. - IDC 2016 Prediction #5 Strategic “Self-Service” will become the new “Full-Service” or “Best-Service” Businesses will strategically commit to becoming easier to do business with, not only for their customers, but for the cost reduction potential it affords. As Andrew C. Oliver said in his 2016 Predictions published on InfoWorld, “The old IT mantra, ‘say no first until someone makes us,’ doesn’t work anymore. [In 2016,] the best companies will build cultures of performance and doing the right thing -- and will make data and the processes around it self-service for all their employees.” Not only will this transformation result in happiest customers, but it will also result in happy stakeholders. Forrester reported that B2B companies can reduce client service costs by as much as 90% by moving to a self-serve eCommerce environment.* Strategic self-service will help to streamline processes, create efficiencies and, again, improve the B2B customer and buyer experiences. B2B users are beginning to expect more sophisticated user experiences and features, similar to what B2C began demanding a few years ago. Personalization, easy re-ordering, enhanced on-site search are expected. - Darin Lynch, Founder, IrishTitan Summary 2016 is the year of the B2B customer for sure, but perhaps it is an even bigger one for the individual, all of the people that make up the fabric of the workplace from management, to IT, to finance, to marketing, to operations, to distribution. Driven by mobile empowerment, API connectivity, cloud platform flexibility, and personaliza- tion of big data -- all of our lives are being revolutionized by technology, one person at a time. The benefactor? Your business. In 2016 the future for business and eCommerce is bright. More business than ever will be done online, pushing costs of managing or- ders to new lows, and customer satisfaction to new highs! Source: * US B2B eCommerce Forecast, 2015 To 2020, Forrester Research, Inc., April 2, 2015 Twitter: @four51inc LinkedIn: Four51, Inc Trusted by thousands of businesses worldwide www.four51.com 952-294-0451 B2B eCommerce. 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