The Consumerization of B2B eCommerce
While eCommerce has been most recognized as the domain of business to consumer (B2C) commerce, recently business to business (B2B) companies have also come to realize the advantages of having a presence in the eCommerce space. More and more businesses are shifting resources from traditional brick-and-mortar or catalog sales channels to eCommerce, and in essence, creating a consumerization of B2B eCommerce.
Providing distributors, wholesalers, and other vendors internet based access to their B2B operations creates a convenient means for these assets to complete business transactions. B2B eCommerce delivers quicker and more precise options to understand order statuses and history, presents a higher level of information about the products, and enables distribution channels to better perform while reducing the allocation of business resources to support vendor daily operations. It’s no wonder why that, according to a recent study conducted by Forrester Research, 89 percent of B2B providers stated that adding eCommerce to their business increased annual revenue by 55 percent!
As B2B companies trend towards eCommerce for current and future business transactions, it is important to recognize the unique challenges that present with this move. Where B2C eCommerce channels tend to be relatively straightforward, B2B channels must support multiple diverse business practices unique to the supplier/distributor relationship. Numerous sales channels with unique pricing and content structures, differing types of data communications, higher levels of security with support for multiple user levels are just a few of the unique challenges B2B operations come across in the world of eCommerce.
Additionally, eCommerce channels offer new possibilities previously not considered as operational parts of this relationship. Selling online enables supplying businesses to provide personalized shopping environments, supported sales associate pages, online generation of detailed sales sheets, and much more to the distributor or wholesaler. Bringing B2B operations online opens the door to new opportunities and growth, but where does a B2B company start taking advantage of eCommerce?
One good place to start is by understanding the differences in approach between B2C and B2B. Twelve of these critical differences are listed below:
|Area of Comparison||B2C Approach||B2B Approach|
|Targeted Market||Broad & General||Small & Targeted|
|Customer Approach||Product Driven||Relationship Driven|
|Buying Process||Short & Simple||Multi-Step, Complex|
|Users||End Consumers||Sales Reps, Brokers, Dealers, Wholesalers, Distributors, Purchasing Managers|
|Frequency||Typically One-Time, Repeat Buyer Often Differing Products||Typically Repeat Orders, Often Similar Products|
|Order Total||Typically Low Price, Usually Low Volume||Typically High Price, Often High Volume|
|Stock Status||Typically In-Stock||Often Not In Stock|
|Order Creation||Manual or Disconnected||Automated Order Creation in ERP|
|Pricing Strategies||Standard Pricing, Limited Tier or Group Pricing||Complex, Specific Pricing by Buyer Type, Volume|
|Payments||Typically Credit Card, PayPal||Typically On Account Credit Sales, Company Provided Credit Card|
|Fulfillment||Often Third Party Warehouse (Drop Ship)||Typically Internal Warehouse|
|Shipping||Common Carriers||Common Carrier, LTL, TL, Other|
Understanding the approach of a B2B eCommerce strategy is vital to the next step of the process, which is choosing and operating an eCommerce platform. For instance, knowing that your targeted market for a B2B approach is expected to be small and that order creation will likely be integrated to an ERP, we can anticipate that hosting needs will be focused more on reliability and integrations support rather than the ability to handle large volumes of customers. This relatively simple piece of information has already provided a valuable piece of the approach necessary to drive hosting development. The traditional consumerization of B2B eCommerce will no doubt continue. Once you appreciate how your business needs can benefit from your presence online, you can start approaching the B2B eCommerce space in confidence.
Charles Kain is a Technical Architect on the LYONSCG eCommerce Implementation team. He leads discovery and refinement processes for client requirements, develops scalable enterprise solutions to fit client needs, and acts as a primary technical lead for projects. Charles is a Magento Certified Developer and has several patents in the knife industry for products he has invented.