Once considered unrealistic for B2B, ecommerce has picked up steam amongst B2B retailers and is quickly becoming a driving force within the industry. According to Forrester research, B2B ecommerce is projected to hit $1.2 trillion in the United States by 2021. That’s a compound annual growth rate of about 7.4 percent – a market shift that can’t be ignored. But what, exactly, is driving that growth in B2B ecommerce?
For one thing, the B2B buying process is becoming increasingly influenced by customers’ B2C buying expectations. This causes B2B merchants to orient their experiences to better align with those expectations, which means they’re now becoming more digitally-focused.
The increased availability of robust online digital platforms that accommodate a variety of buyers and simplify complex purchasing processes is helping to facilitate major improvements across the B2B landscape. Those improvements are paying off, allowing B2B brands to tap into this remarkable growth and capitalize on new opportunities to drive sales.
Lighting accessories brand Atlanta Light Bulbs experienced this B2B buyer evolution firsthand. Despite having established an online presence in 1999 to complement its well-trafficked storefront, the past five years brought increased digital competition, forcing Atlanta Light Bulbs to revamp its B2B ecommerce sales strategy. Now, the company caters to a younger generation of B2B buyers by offering a mobile buying app, a “name your price” negotiation tool and customer loyalty programs. Together, these create a seamless experience no matter where Atlanta Light Bulbs’ customers are shopping, while still maintaining all the high-touch elements of a traditional B2B sales process that its existing customers loved.
The Modern B2B Landscape
As mentioned, B2B ecommerce is growing rapidly. There’s a huge opportunity for merchants in this sphere, and that’s going to continue for the next several years. From a more global standpoint, Statista data shows there was more than $7.6 trillion in gross merchandise volume for B2B ecommerce retailers in 2017 alone.
However, there are far more B2B companies that should sell online than actually do today. The vast majority of B2B sites in the U.S. are still not digitally-enabled. According to an Accenture/Blackstone Group survey, ecommerce sales accounted for less than 10 percent of total sales for half of U.S.-based B2B companies in 2016. The reality is many who work within the B2B sector are only just now recognizing how far behind they are – and that they need to sell online now.
Experts predict this will happen soon enough. SAP’s Hybris Walker said, “[B2B ecommerce has] started to accelerate, but adoption has been a little slow. In the next five years, we’ll probably see a significant amount of growth in B2B ecommerce.”
From our perspective, this growth is indeed occurring in full force. BigCommerce recently surveyed a pool of merchants, of which 80 percent identified as having some B2B component to their business. The report found that 39 percent of respondents rely on B2B sales for more than half of their revenue, and 90 percent expect B2B sales to increase this year versus 2017.
Though data collected from BigCommerce customers are admittedly skewed toward businesses with a tech-friendly mindset already, it still reinforces the growth of B2B ecommerce overall and illustrates the shift on a large scale.
Given that ecommerce is no longer a channel that B2B brands can ignore, what do they need to know about its possibilities?
The Ecommerce Opportunity for B2B Merchants
From intermediate sales prospects to customer experience improvements, incorporating ecommerce into an existing sales model opens many new doors for B2B merchants that drive bottom-line results. There are a few actionable steps merchants can take to reach that end goal of ecommerce-based success.
1. Orient experiences to align with customer expectations
As expectations rise and the overall buyer’s journey becomes more intricate, B2B businesses still face many complex problems native to their trade. Given the transition the B2B sales industry is going through, merchants must be equipped to service customers in a variety of ways that appeal to both traditional and more digitally-focused buyers.
This transition underscores an important point: While the products being sold are inherently different than those purchased by an everyday consumer, B2B buyers increasingly want the experience to be reflective of what they are accustomed to in their personal lives. As such, leaning on B2C best practices makes good sense.
By delivering omnichannel interactions, streamlining workflows and integrating buyer-friendly features that add simplicity to in-depth processes, B2B brands can optimize their experiences to align with those ever-growing expectations.
2. Compete on quality
With retail giants like Amazon and Walmart competing for market share, the B2C environment can often feel like a race to the bottom on price. Aside from a few notable examples, consumers tend to prioritize the cost of an item over all else. In B2B – where buyers are already of the mindset that they will incur a high order price – there’s a greater opportunity to use a product’s uniqueness and quality as a primary factor in the purchase decision.
Data echo the sentiment that B2B merchants have a unique opportunity to compete on quality right now. Our survey showed that factors like brand reputation, product quality, uniqueness of inventory and ability to customize products were major selling points for B2B buyers – even more so than price. Merchants know it, too: 53 percent of merchants believed that brand reputation is the key selling point for their business (as compared to 47 percent who believed it is price).
3. Lower cost of ownership
Some B2B retailers fear that building and operating a customized ecommerce solution will be cost-prohibitive. In fact, 32 percent of our survey respondents listed the added challenge of personalizing the B2B buyer experience as a key concern for moving online. This should not be the sticking point that prevents a business from expanding to ecommerce, however. Developing a custom, secure B2B site that is personalized to the buyer and meets all their business requirements can be expensive, not to mention time-consuming, for businesses not utilizing the proper tools. By leveraging an ecommerce platform that includes maintenance and premium service along with options for additive development capabilities via an open API, B2B merchants can actually lower their total cost of ownership.
Final Thoughts: Ecommerce for Retail Survival
For B2B companies that are not yet incorporating ecommerce: Now is the time to reconsider.
The vast array of technologies and tools that help facilitate a simple online experience – and do so at an affordable price point – make the process of selling online easier than it’s ever been before. Growing customer desire to shop online across the board further illustrates the incredible untapped potential of B2B ecommerce. For B2B businesses that seek a reliable, scalable way to continue positive growth and future-proof their business, ecommerce offers the sort of economics that fit any business model.