As we head into 2022 and with the pandemic continuing to show new variants, the world of online sales continues to thrive and become more competitive.
It is important for your business to focus on the everchanging B2B e-commerce environment to stay ahead of your competitors.
What is B2B ecommerce?
Business to business or B2B ecommerce is the sales of services or goods between two businesses via online channels. B2B transactions can be simple, for example, order of office supplies, or complex, involving quotations, product descriptions and configurations, overseas shipments, warehousing, etc.
Types of B2B ecommerce
There are several types of B2B ecommerce:
Wholesale involves bulk selling online to other businesses. Wholesalers usually buy from manufacturers and are the middle person in a transaction. For example, a toy store owner buying stock to sell to their online customers.
There is sometimes crossover when it comes to B2B and B2C wholesale ecommerce and vice versa. This can be seen with B2C retailers selling to both customers and businesses. This is especially so as online platforms have enabled B2C merchants to expand their customer base.
B2B ecommerce is great for manufacturers as it allows for a smoother sales process in addition to a broader reach. Traditionally, manufacturers had to sell their products to wholesalers of retailers via offline channels.
However, online channels have provided convenience and many expansion opportunities, including selling direct to consumers (D2C)
B2B ecommerce is also a growth opportunity for distributors – payment is easier, sales process is more efficient and selling directly to customers is overall, simpler.
Essentially the middle person between wholesaler and retailer or manufacturer and wholesaler, distributors are people who buy and stock products in large quantities before selling them. For example, a health drink distributor selling to retailers.
B2B ecommerce examples
The following are five B2B ecommerce examples:
- Alibaba – This Chinese B2B and B2C company serves over 18 million consumers in 240 countries. Alibaba connects sellers and buyers and managed to build a system that enhanced customer experience.
- Amazon Business – Similar to Alibaba, Amazon Business is also a B2B front runner and you’ve probably heard of them. Amazon Business hit USD10 billion in sales four years after it launched.
- ACME – If you’re in B2B, you may have heard of ACME, a packaging provider for shippers and logistic operators. Their website is carefully curated with an incredible attention to detail.
- Quill – This B2B ecommerce company supplies office products to small and medium sized businesses.
- Skype – Skype from Microsoft is a B2B business example that enables video conference communication for individuals around the world. It is one of the most popular apps with over 500 million registered users.
How big is the B2B ecommerce market?
The estimates for the global B2B eCommerce market for the year 2020 is around US$14.9 trillion. This is about 5 times more than the B2C market!
Asia pacific leads the B2B share with about 80% with Amazon and Alibaba as the most prominent players.
Potential benefits and challenges of B2B ecommerce
The following are potential B2B benefits and challenges to consider:
Benefits of B2B ecommerce
- Reduce costs – B2B can reduce your operation costs. Having an ecommerce website will save time and effort.
- Increase sales – Online buying and selling are increasing in popularity, especially with the Covid-19 pandemic. B2B ecommerce companies have the opportunity to reach new customers from around the globe.
- Improve brand awareness – Because you have an online presence, you will be able to market, promote and grow your brand both internationally and locally.
- Analytics capabilities – There are many B2B ecommerce platforms that are able to track data and evaluate your marketing campaigns. You’ll be able to make informed decisions about your business.
Challenges of B2B ecommerce
- Maintaining long-term customer relationships
- Conducting strong competitor analysis
- Choosing the right technology that will work for your business
- Ensuring cybersecurity for your ecommerce site
- Product pricing is a crucial key to success
- Developing a simple return or refund policy
What are the factors driving the B2B ecommerce market?
Regardless of the challenges, the B2B ecommerce market is not just growing, but thriving. Factors driving this growth include:
We live in a time of exponential technological advancements and these developments are very much accessible. Telecommunication infrastructure has improved tremendously, with increased internet bandwidth.
There are government initiatives that support the advancement of technology needed for ecommerce growth.
The number of internet users has increased and will continue to increase as internet access becomes more and more available. Additionally, it is now quite normal to shop online as compared to several years ago.
Economic growth has resulted in lowered costs of hardware and software, as well as the cost of access to telecommunication infrastructure. This means more people are able to use personal computers to make online purchases.
B2B ecommerce statistics
Check out these stats from 2021 and previous years that are likely to have a significant impact in the upcoming years:
- Global B2B ecommerce market is expected to expand at a CAGR (compound annual growth rate) of 18.7% between 2021 and 2028. (Source: Grandviewresearch)
- About 70% of enterprise marketplaces will serve B2B transactions by the year 2023. (Source: Virto Commerce)
- 81% customers research their products online before finalising a deal (Source: Adweek)
- B2B buying cycles have been getting longer and complex. (Source: Demand Gen Report 2019)
- 62% of customers are less likely to purchase from a B2B brand if they have a negative mobile experience. (Source: Think with Google)
- 20% of B2B searches are made using voice commands (Source: Google)
- 80% B2B leaders plan to adopt new selling models post-pandemic. (Source: Corevisit)
Why is B2B ecommerce growing?
There are several reasons for B2B ecommerce growth:
- Worldwide customers – B2B ecommerce companies have the opportunity to reach a global audience.
- Global products – There is demand for imported products.
- International operations and global collaborations – There are a growing number of transnational and multinational ecommerce companies.
- Unlimited resources – Resource issues such as labour, and material for production are addressed with offshoring.
- International competition – Countries are racing to capture market share in the B2B ecommerce sector.
Top B2B ecommerce trends for 2022
Here are some of the top B2B ecommerce trends you’ll want to take note of for 2022:
Analysing customer behaviour across multiple channels
One of the biggest benefits of B2B e-commerce is the ability for businesses to collect, analyze and learn about customer experience and customer behaviors from online data.
Capturing data across multiple channels via ecommerce analytics will allow you to enhance UX, create personalized marketing content, identify common issues and improve the supply chain.
Additionally, you’ll also be able to use the data to make budget decisions and increase sales.
Almost 50% B2B buyers believe that personalization is a vital feature when searching for online clients to build relationships.
Leveraging customer data and technologies like AI and machine learning are important for B2B brands to personalize their customer experiences.
It may also include using tactics like:
- Segmentation of customers and retargeting the hesitant customers to complete a purchase.
- Add abandoned cart retargeting campaigns.
- Personalize newsletters to send product recommendations based on customer interests.
Dynamic pricing, where the same product is sold to different groups of customers at different prices has numerous benefits, including:
- Better control over product pricing
- Pricing flexibility without beans value compromise
- Saves costs in the long run
With improvements in AI/ML engines and the right software tools, B2B ecommerce companies can now determine and respond to real time supply and demand fluctuations.
Automated and flexible payments systems
Automated and flexible payment systems on a number of digital payment platforms allow customers to perform transactions with the preferred methods. Easy and simple payment processes help with customer loyalty. In fact, not providing the buyer with their preferred payment method may result in losing a particular sale.
Faster and smoother order fulfilment
Ecommerce is growing and for 2022 and beyond, the race is on to shorten order fulfilment times. Customers expect quicker delivery and B2B companies need to make improvements to their fulfillment network. Start by removing friction points in the process and looking into logistics-related areas for the future of your supply chain.
Reshoring refers to the process in which a product is returned to the company’s home country. It’s essentially the reverse of offshoring, when a product is manufactured overseas to decrease production costs.
The Covid-19 pandemic has resulted in global supply chain breakdown, exposing the weakness of globalizing manufacturing and logistics. Reshoring to domestic producers or manufacturers increases control for businesses and reduces susceptibility to unforeseen external factors.
However, while sourcing is more reliable, the changes in labour and material costs may affect the pricing of the product and should be something to consider.
Focus on B2B mobile commerce
A seamless mobile experience is essential as more and more B2B inquiries are made via smartphones. This means that B2B businesses need to be mobile-friendly.
Your customers should be able to log in with a mobile to view pricing and perform checkouts as well. Don’t minimize the advantage of mobile apps. You can even use it to sync your systems, and connect your sales team in addition to increasing recurring orders.
Launch DTC channels
Direct-to-consumer or DTC competitors are a challenge that many B2B companies face. However, DTC channels are also a chance to reach new buyers who are ready to purchase directly from you.
Here are some reasons to launch DTC channels:
- They are a new revenue stream – Consumers are buying products online and B2B ecommerce companies are in a position to meet these demands.
- You will be able to understand your customers better – With transactional data and data on shopper behaviour you will be able to better understand your customers. This means you’ll be able to make informed decisions on your supply chain, product development, marketing packaging, and pricing.
- It helps build customer loyalty – DTC channels are able to offer personalized, customer-centric experiences. This means you will be able to control your customer’s journey, from when a potential customer browses your website, until the delivery of your product is made.
Focus on omnichannel marketing
Companies that have omnichannel marketing strategies are more likely to retain their customers. This is because online shoppers tend to use numerous channels when buying online. Providing a unified experience on all your channels is a sales approach that will pay off.
You’ll be able to send a cohesive message regarding your brand, understand your customer’s journey and personalize customer experiences. As such, B2B ecommerce businesses need to work towards omnichannel marketing.
Video marketing for brand awareness
It can be hard to stand out from competitors as the B2B marketplace continues to grow. As such, strategic video content marketing is gaining importance. In fact, it’s essential to gain and retain customers.
Consider making video marketing a part of our digital marketing strategy. You can conduct live talks, webinars and even incorporate short marketing videos on your social media channels and websites.
B2B cloud adoption
If you haven’t adopted the cloud revolution, then it’s time to do so. Although the cloud was available a long time ago, the Covid-19 pandemic has accelerated its usage. With the cloud, you will have better security, flexibility, and stability as compared to having your own data center. You’ll also be able to reduce cost and thus, save up to scale up.
Additionally, cloud infrastructure is evolving. You may soon find it intertwined even more closely with other technologies such as AI, IoT and much more.
Focus on quality UX
Quality UX is still as important as it was in 2021. In fact, it may be even more so. Website usability, and accessibility are key areas that B2B ecommerce companies should focus on.
However, with the increase in online purchasing, quality UX isn’t just about optimizing website performance. Real-time data is needed for better UX. Order management, modifications and tracking should all be given consideration. Additionally, you’ll want to make sure that all these features are available across multiple types of devices.
Application Programming Interface, or API, are programming codes that allow applications to communicate with each other. As such, API integration means B2B businesses are able to build advanced ecommerce infrastructures.
External and internal applications can be connected, providing collaborative solutions to hard to solve issues. For example, APIs have made real-time inventory possible, making fulfillment services faster and smoother.
Use of progressive web apps (PWAs)
The use of PWAs offer several advantages. They are discoverable via search and B2B businesses can promote and market themselves no matter what device potential customers are using. Buyers are able to download apps from your website and you will be able to release updates as often as you wish.
Additionally, fast loading pages, a smooth webs experience, offline work mode and cross device compatibility are some other PWA perks.
Use of augmented and virtual reality
The use of augmented and virtual reality (AR & VR) is fast becoming a part of long term ecommerce strategy. B2B companies will be able to design immersive customer experiences, and improve consumer’s decision-making.
B2B companies can use AR & VR to enhance product presentations, create sales opportunities and in the long run, convert consumers and encourage them to stick with the company.
Voice-related searches are quite the norm in B2C and with voice recognition technology improvements, there is no doubt that B2B businesses will also be moving towards this trend in business operations.
Choose a reliable B2B ecommerce platform
One of the best decisions you can make is to choose a reliable B2B ecommerce platform. There are many options so here are some tips to make it easier:
- Choose a platform that offers access restriction options as you may not want to have the same information available to all customers. For example, B2B businesses may choose to restrict access in the following ways:
- Only allow access to the site for registered uses.
- Hide B2B pricing from B2C customers.
- Provide prices only for users who are logged in.
- Restrict certain products or access depending on the user’s location.
- Choose a platform that has customization options for pricing, payment, and ordering. Each customer is different and hence, you’ll have to meet different requirements. Take transactional options, for example:
- You may want to offer credit to trusted customers.
- You may want to have different pricing for B2B and B2C customers.
- You may want to provide dynamic pricing according to your various customer groups.
- Choose a platform that allows focus on customer experience. UX can make or break your business, and good UX helps you stand out from your competitors. Opt for a platform that has high UX standards across the numerous devices that your customers use. Your customers should be able to browse, buy and interact with customer service without the hassle.
Conclusion: How is B2B eCommerce evolving?
B2B ecommerce has been growing as more people turn to online shopping. You’ll find that many processes are not much more efficient and transparent as compared to a few years ago.
This sector will continue to grow, although growth rates may vary from year to year depending on economic, social, political and technological factors. If you’re running a business, the best time to start experimenting in B2B ecommerce is now.