In retail, e-commerce has in many ways simply become commerce: such is the demand for online shopping that today’s retail giants are usually either brands that have grown to meaningfully engage with the web, or else born-on-the-internet outfits. Yet there’s more to e-commerce than the consumer side.
Today, B2B e-commerce is a growing area, with Forrester Research predicting it will reach $1.2 trillion and account for 13.1 percent of all B2B sales in the U.S. alone by 2021. Cross-border B2B transactions are estimated to reach $1.2 trillion in the next five years, with Forrester estimating the total value of the online B2B sector at $9 trillion.
Capturing as large a share as possible of that remaining 86.9 percent currently not conducted online is the obvious challenge for the B2B sector, and businesses that have started to do so have developed innovative online platforms that address the specificities of B2B purchasing.
Ferguson Enterprises, for example, the largest distributor of plumbing supplies in the U.S., has done much to increase its e-commerce presence. Selling to a variety of customers in the industrial, construction and building supplies sectors, it grew B2B e-commerce sales to $3 billion in 2017.
A key part of this was developing an e-commerce experience that was responsive to buyer needs, including features such as on-site search, website usage tutorials, video libraries, detailed product catalogs, real-time stock availability tracking and a customer e-portal for personalized content. Unlike a typical B2C site, however, Ferguson also developed special features aimed directly at the B2B buyer such as reorder processing, multiple shipping options, commercial credit, quotation services, tax and customs calculation, and an effective returns and cancellation policy. This is all backed up by an interactive customer support team via a wide range of channels.
“Everything we do in the e-commerce space is centered around our customers,” says Mike Brooks, Ferguson’s CMO. “In our industry, the shortage of skilled trade professionals combined with changing customer expectations is driving the need to continually build on and improve our B2B online experience.”
Forward-looking e-commerce solutions like those of Ferguson are not yet the norm, however. In terms of adoption, B2B lags dramatically behind B2C.
“I don’t think making the switch to e-commerce is an easy thing for B2B businesses to do,” says John Pearson, CEO Europe, DHL Express. There are risks, he points out, and potential pitfalls: “Businesses need to develop a clear understanding as they go into this market and ensure that the e-commerce offering they choose to develop is right for them and their customers. They need to go in with their eyes open, rather than just saying ‘Competitor A is doing it, so we should too.’”
Pearson, however, also sees many opportunities: “A growing number of our B2B customers are currently either increasing their online presence or are in the process of developing strategies for an omnichannel approach. There are tremendous advantages for those companies that manage to get it right, and the right strategy can open up tremendous opportunities around the world.”
At the center of any e-commerce strategy must be a clear understanding of the customer journey; not so different from traditional B2B commerce then – but something that is lacking in many B2B e-commerce solutions, which typically remain unresponsive and more complex than traditional sales channels.
Specialist B2B market research firm B2B International has found that only 14 percent of large B2B companies can be described as truly customer centric in their e-commerce offering, while KPMG’s report “B2B Customer Experience: Winning in the Moments that Matter” found that B2B e-commerce lagged behind in terms of personalization and required too much time and effort from buyers.
Overcoming resistance to change
Laurent Muzellec, associate professor in marketing at Trinity College, Dublin, and director of the Trinity Centre for Digital Business, believes that B2B e-commerce has failed to keep pace with B2C for reasons related to both ends of the transaction.
Sellers, he explains, are still often reluctant to cannibalize offline sales to boost e-commerce, while entrenched habits often still dominate industrial and commercial buying.
However, Muzellec believes that this resistance can be overcome by making the process smoother – and more ubiquitous – than the traditional channels. Increasing investment in web-based supply management solutions is the way forward, he says.
Pearson agrees, saying that buyer-side willingness must be fostered by B2B businesses meeting customer needs and creating a user experience akin to that of online retail platforms. “We all purchase online. The mindset has evolved and, therefore, we’re taking that back to the workplace,” he says. “The B2B seller needs to think about a lot of things. User experience is one of the key things: if it’s poor it adds zero value.”
Logistics also plays a critical role, especially in cross-border e-commerce. According to Pearson, speed, convenient and reliable delivery and traceability are some of the essentials. To succeed, he says, B2B e-commerce must offer what is already the norm in online retail – a logistics strategy that provides multiple transport and delivery options, giving the buyer choice and convenience.
“Furthermore, developing the B2B e-commerce space needs to be understood as an ongoing process rather than a one-off shift,” Pearson comments.
“You have to constantly innovate and invest, whether it’s keeping your site up to date or being active in digital marketing; you have to keep yourself in the frame as the market is evolving all of the time.”— Jason Walsh
“The Next Industrial Revolution,” a white paper jointly developed by DHL Express and the Cranfield School of Management, investigates the current trends and significant potential of the global e-commerce landscape for B2B companies and gives a series of practical recommendations. Download the paper at: Logistics.dhl
Published: September 2018
Images: sdecoret/Adobe Stock; Stanislav Voronov/Adobe Stock; GeorgHanf/Getty Images; Schlierner/Adobe Stock; Zerbor/Adobe Stock; Thinkstock; DHL