The state of B2B ecommerce was assessed at a one-day conference in Berlin. Maxine-Laurie Marshall reports on the findings
Get your to-do list, make sure you have a pen and jot this on the end of the list: B2B ecommerce. Selling online is more relevant for B2B than many working in the industry realise.
Ecommerce is a big business and it’s getting bigger. According to Key Trends In BtoB Ecommerce For 2013, a report by Forrester Research, US B2B ecommerce revenue has now more than doubled that of B2C, with $559 billion in annual sales.
Forrester recently worked with software company Hybris to assess the current B2B ecommerce environment. The jointly created report, entitled Online and Mobile are Transforming B2B Commerce, was launched at the Gameplan: B2B Ecommerce Forum. It revealed just under half of the 717 B2B companies surveyed (353) were selling directly to B2B partners online. And chances are that number will continue to increase because those businesses embracing ecommerce are seeing a host of benefits.
Benefits
Of those businesses surveyed who are already selling online, 51 per cent said customers added extra items to their orders and 57 per cent said ecommerce customers ordered more frequently than offline customers. This clearly equates to more money being spent by online customers. Further demonstrating this is evidence that the average order value (AOV) is higher for online-only customers. Thirty-seven per cent of respondents said the AOV was higher for online-only customers, compared to 31 per cent who said it was lower. For companies with more than 25 per cent of their sales done online the difference increases dramatically, with 52 per cent of respondents seeing a higher AOV for ecommerce customers.
Increased revenue is great but the benefits extend beyond the numbers. Forty-four per cent of those surveyed who are already implementing ecommerce said they could more effectively build loyalty with online-only customers, compared to 28 per cent who disagreed.
Phil Duhs, director of ebusiness at mobile distributor Ingram Micro Mobility and a speaker at Gameplan, has seen success from ecommerce. He says companies who aren’t embracing it risk missing out: “The longer they leave it, the more disadvantaged they’re going to be because the companies that are already online are seeing larger AOVs and faster recurrence of sales; they’re actually generating more business.”
Challenges
Sounds good, but on the surface buying online seems to lend itself to specific verticals and industries such as construction. Even the B2B ecommerce advocates at the event admitted they found some complex products didn’t work so well online. When I asked Duhs if ecommerce leant itself to some industries over others, he said: “It depends perhaps a little bit on industry as to how easy it all is and how applicable it all is.”
But before you use that as your reason to ignore this fast growing sales platform, nobody at the event was insisting ecommerce is the only way B2B businesses should be selling.
John Fisher, VP ecommerce at food and facilities provider, Armark, and a speaker at the Gameplan conference, said online ordering wasn’t necessarily faster for all of its customers, and 100 per cent conversion to online ordering was not the businesses aim.
Brian Walker, SVP of strategy at Hybris, encourages brands to use ecommerce along side traditional channels: “There are some products that naturally lend themselves to human beings negotiating and talking, it’s what happens after that where ecommerce can be a huge benefit. It’s not about one channel versus the other, it’s about how you build complementary processes.”
Sales replacement?
Selling online obviously means less interaction with sales teams, so is this marketing’s way of ridding itself of its long-standing enemy? No. Online marketing techniques haven’t made offline techniques redundant, they have impacted on them and now the two are more closely aligned. The same can be said for online selling, it won’t make offline selling redundant, but it will impact it.
So sales teams needn’t worry, they won’t be made redundant either, but they may take on more of a lead nurturing role. Duhs rightly points out: “In B2B you’ve got to create a relationship with the customer first, then you start selling them something, where as in B2C it almost happens at the same time.” So sales could be spending more time managing the customer conversation and building customer relationships.
Sales can connect prospective customers to the web where they can continue to make the purchase and hopefully the company will profit from the benefits of ecommerce mentioned earlier. But sales work on incentives, and there is no incentive for them to encourage customers to by-pass them and buy online. So that needs to be changed. Duhs admits his company had to change the bonus and reward structure.
Fisher noted, by removing the interaction with a member of the sales team, that element of human interaction needed to be put back in somewhere along the line. He found human interaction was more important for his online customers, resulting in the interaction with the delivery driver being more important for ecommerce customers. Just because customers want to, and can, buy online, they still value a human touchpoint when interacting with your brand. So don’t think ecommerce can result in you becoming a faceless entity.
B2C moving in to B2B
If you’re still unsure about the relevancy of B2B ecommerce, be aware that B2C ecommerce players are capitalising on
the B2B ecommerce market. In April last year Amazon launched Amazon Supply, a
US website that sells industrial supplies, parts and office equipment to businesses. It’s billed to be ‘the store for business
and industry’.
Google is also looking to capitalise on the B2B ecommerce market, albeit in a slightly different way. Its Google Shopping for Suppliers site is in beta and is designed to be a marketplace for manufacturers and a shop window for buyers.
These two giants would not be investing resources in products and services they didn’t believe could be profitable. You are the experts in your respective industries, you know your customer’s pain points, you’ve worked hard to build up brand awareness, don’t throw it away by ignoring how your customers want to buy from you. Online is ruthless, it waits for no-one, don’t dismiss it, work out how it can be relevant for you.
As Duhs says: “Companies that are in denial, are in denial of reality, commerce is moving online, it will continue to move online in the B2B space just as it has done in the B2C space. If you don’t believe it’s going to happen, the evidence now suggests you’re wrong.”
