B2B ecommerce is big, Statista predicts B2B sales will reach $1.2 trillion by 2021.
Globally, the B2B ecommerce market was worth $12.2 trillion in 2019, having grown from $5.8 trillion in 2013, and double-digit growth is predicted for B2B ecommerce sales through 2024.
In this article, we will look at the different types of B2B ecommerce, dispel some common misconceptions, extol the benefits of online, and look at some key B2B ecommerce trends.
What is B2B Ecommerce?
Let’s begin with a definition of B2B ecommerce. It is the sale of goods or services between two businesses through online channels.
These business-to-business transactions may be as simple as an order for stationery and office supplies, or a more complex transaction involving different quotes and product configuration.
Types of B2B Ecommerce
Wholesale B2B ecommerce involves selling goods in bulk online to other businesses. For instance, this could mean a grocer buying stock in bulk to sell online to customers. The wholesaler is the middleman in this transaction, having already purchased items in bulk from manufacturers.
There is often some crossover between B2B and B2C wholesale. For example, some B2B wholesalers who supply the restaurant market opened up B2C channels as Covid-19 affected demand from their usual business customers.
B2C merchants also cross the same divide. Many DIY retailers
For manufacturers, B2B ecommerce presents an opportunity for a more efficient sales process, as well as a great way to broaden your audience and reach.
Manufacturers have traditionally sold goods to wholesalers or retailers through offline channels, but the convenience of online, for manufacturer and client alike, has led to greater uptake of ecommerce.
Some are beginning to move into new channels, such as selling direct to consumers (D2C). For example, automotive manufacturers, Volvo for example, have opened up new online channels that enable them to bypass dealerships and sell directly to customers.
Distributors are essentially the middlemen between the manufacturer and wholesaler, or between the wholesaler and retailer. They buy and hold stock before selling the products. This may be a distributor of car parts to garages, or perhaps certain cleaning supplies to retailers.
They typically provide the marketing, sales, and services to the individual buyers which are often more suited when selling to large numbers of relatively small businesses.
The complexities of contract purchases, varying prices, payment options, and conditions by customers has caused a bit of skepticism for some distributors moving into ecommerce.
However, the adoption of ecommerce opens up room for growth, as well as increased efficiencies. It can also make it easier to sell directly to customers.
Common Misconceptions About B2B Ecommerce
There are plenty of assumptions about B2B ecommerce that have affected attitudes towards selling online, and in some cases, these can limit the ambition amongst companies.
These are often lazy assumptions about consumer behavior, or perhaps they overestimate the difficulties of setting up online channels.
Let’s take a look at some of the more common misconceptions:
Misconception 1. B2B customers don’t want to order online.
This is a popular myth that has probably been used as an excuse by many not to sell online.
In reality, the current generation of B2B buyers, and certainly the majority of the next generation are frequent users of ecommerce sites themselves. Many are accustomed to the speed and convenience when doing personal shopping and will see no reason why this shouldn’t be available for B2B.
B2B ecommerce should offer businesses the chance to spend less time traveling for face to face meetings and less time negotiating with sales representatives as well. They expect to be able to make B2B purchases in the same way they already do their personal shopping. B2B ecommerce offers businesses speed and convenience, without the need for extra travel for face to face meetings.
Demand Gen found that 44% of millennials are making buying decisions, while 33% are making recommendations or otherwise influence the purchasing process. The millennial B2B buyer is here already.
Research from Episerver shows that B2B buyers want self-service functionality on websites, and clarity on pricing when researching purchases. They also express a preference for digital channels for research and communication, with email being the main preference, and phone contact being something they would prefer to avoid.
Demand Gen surveyed millennial decision-makers, and for the vast majority, the digital experience was important to vendor selection.
The challenge for B2B businesses is not whether their target customers want to buy online, it’s about providing an online experience that matches their expectations.
Misconception 2: Online ordering is cold.
Another myth around B2B ecommerce is that online ordering is cold, and lacks the personal touch of the ‘traditional’ sales process.
This doesn’t have to be the case. It can be a chance to build up relationships with customers in different ways, learn more about them, and begin to personalize the digital sales experience for them.
Online channels provide the opportunity to learn from customers’ preferences through their online behavior, and to use this data to personalize their experience. This may be through providing more relevant content in emails, or by using their ordering and browsing history to surface appropriate products and options in subsequent visits.
Though ecommerce is becoming a preference for B2B buyers, it doesn’t mean they don’t want personal contact. Buyers still want interactions with sales teams – they may prefer social media and text but in-person meetings and chats still play a part.
It’s also important to note that online often makes up just one part of the process. For example, it may allow buyers to research to the point where they need more help from sales teams but are already well along the path to purchase.
Misconception 3: Online stores negate custom orders.
Custom ordering and pricing are staples of many B2B business models and have often been the result of negotiations between buyer and seller in person or by phone.
Some may worry that a shift to ecommerce makes this more difficult, or even impossible. After all, people are likely to have had little experience in custom orders on ecommerce sites.
There are ways around this, through custom quoting tools for example, or by placing customers into segmented customer groups so that subsequent orders can be completed entirely online.
It can also help to use the website as a lead generation tool, where potential buyers can research and find the information they need before submitting their preferences to receive a quote, or to speak more directly to a sales team.
Misconception 4: Ecommerce requires price transparency.
33% of respondents to a BigCommerce survey expressed concerns about revealing B2B pricing online.
One key concern is that price transparency creates a race to the bottom, with customers shopping on price only, and failing to consider other key selling points like the quality of service and product.
The truth is that you don’t have to reveal all of your prices online. You can offer custom quotes or, as with brands like Selini NY, you can choose to showcase your products to all visitors, but reveal the prices to logged in customers only.
Advantages of Using a B2B Ecommerce Platform
The advantages of an ecommerce store are numerous for B2B businesses. The trend towards ecommerce is clear, and B2B brands can unlock new markets and broaden their appeal by moving online.
Here are just four compelling reasons to sell online.
Advantage 1: Reach new customers.
Many of the current and the majority of future B2B buyers are using digital devices throughout their daily lives, just like the rest of us. They’re on social media, streaming TV and reading news on their phones and laptops, and shopping online.
The research methods of the B2B buyer are now digital too. Demand Gen’s 2020 B2B Buyer Behavior Study finds that the first three resources for researching purchase are online – search engines, vendor sites, and review sites.
If you’re online, then you can optimize your site to appear prominently in online searches for your product or service, and your site will be the one potential buyers are checking out. If you’re not online, you’re missing out on these new customers.
These buyers don’t just want to research online, they want the convenience of product selection and checkout online. A fully transactional website will allow you to appeal to B2B buyers throughout the research process through to the completion of the sale.
Advantage 2: Better management of suppliers and customers.
B2B ecommerce can offer benefits in terms of efficiency in managing supply chains, and these benefits can also benefit the customer experience.
The digitization of supply chain management through ecommerce platforms can deliver more visibility over the whole production, distribution, and fulfillment process.
This improvement to management of inventory means greater transparency for customers. For example, businesses can be transparent about stock availability and delivery timescales, and about why items are out of stock and when they can expect them to be available.
Ecommerce sites also allow greater insight into customer buying habits, which in turn helps businesses and suppliers to learn more about buying patterns and seasonal trends and to adapt production to match demand.
The result of this increased visibility for suppliers can be a more flexible supply chain, and the ability to deliver the products to customers more efficiently. An improvement that benefits everyone.
Advantage 3: Sell more to existing customers.
Existing customers can generate much of a company’s income. In B2C ecommerce, there are plenty of stats showing the benefits of customer retention. For example, it’s said to cost five times as much to attract a new customer as it is to retain an existing one.
Ecommerce for B2B businesses isn’t just about attracting new customers, but about using digital channels to learn more about your existing customers and improve your marketing to them.
Data from existing customers can be used to improve their online experience, by sending them more relevant marketing communications for example, which can improve customer lifetime value.
Ecommerce can also open up the potential for automated cross-selling and upselling recommendations for existing customers, by highlighting relevant products that complement those they’re buying or selling the benefits of more expensive products.
Advantage 4: Better data & analytics.
The ability to collect and learn from data is one of the key advantages of B2B ecommerce. Better data can improve the customer experience, it can help to improve supply chain management, and can enable B2B businesses to provide more relevant content and marketing for customers.
Ecommerce sites allow you to collect data from every customer visit and transaction. With the help of analytics packages you can improve the way your website works for customers.
For example, identifying and fixing a common problem for customers during checkout can help to reduce the number of abandoned transactions and increase your sales.
Analytics can help you to understand what your most valuable marketing channels are, and to make key decisions about where your budget can be spent most effectively.
Using a metric like CPA (cost per acquisition), you can compare your marketing channels to see which one is most cost-effective and use this insight to switch or increase spend by channel.
Features to Look For When Choosing a B2B Ecommerce Platform
Choosing the right B2B ecommerce platform is a key decision, and there’s a lot of choice and information to decipher during the process.
One thing to think about is the key features you need, to help you appeal to customers, and to make day to day management of ecommerce easier for you.
Feature Area 1: Access restriction options.
B2B businesses don’t necessarily want to provide the same information to all customers. Pricing is one example, as packages may need to be tailor around different customer needs and preferences.
An ecommerce platform needs to allow you to restrict certain parts of your site from different customers. There are several ways you may want to restrict access:
- To hide B2B pricing from B2C customers.
- To show prices to logged-in users only.
- To only allow registered users to access the site.
- To restrict access or certain products according to the visitor’s location.
For these reasons, it’s important to ensure that the B2B platform you’re considering has such restriction options.
Feature Area 2: Pricing, payment, and ordering customization and options.
Not every B2B customer is alike, and you’ll need to offer different options depending on customer type. Your B2B platform needs to allow for customization to be able to for different transactional options.
For example, you may want to offer dynamic pricing according to customer groups or to show different pricing options to B2B and B2C customers.
Some B2B businesses will want to offer credit to select customer groups, perhaps according to buying history and customer lifetime value. The ability to differentiate between customers and turn such options on and off is essential.
Feature Area 3: Heavy focus on user/customer experience.
In a crowded online marketing landscape, the user experience and overall customer experience can be a key differentiator.
User experience (UX) is the way your site works for visitors, they need to be able to browse and buy from your site with the minimum of hassle, and to enjoy the experience.
Customer experience is about the whole process from start to finish, incorporating the website experience, but also taking into account any interactions with sales and customer service teams both pre and post-sale.
Both are essential to converting site visitors into customers in the first place, and to optimize retention and generate repeat business. The overall experience can also feed into your online reputation too.
Great sales and customer service can feed into online reviews and boost your standing, while negative experiences can be shared in places where they can deter potential customers.
The ideal B2B ecommerce platform offers a great UX standard across the different devices that your customers use, but also provides options to customize and improve the experience as you grow.
B2B Ecommerce Trends
One overarching trend in B2B ecommerce, and this is true of all ecommerce, is that customers are expecting more from businesses, in terms of access, convenience, and experience.
If something doesn’t work the way customers expect, then they can easily move onto another website. Meeting such expectations and keeping digital customers happy is a key challenge for B2B businesses.
Trend 1: Self-service.
One key trend in B2B ecommerce is towards self-service. This means the ability for customers to find the information they need and complete transactions without having to call sales teams or wait for responses to emails.
The benefit for the customer is the convenience and the ability to control the experience in the same way they can when shopping on Amazon.
The ability to self-serve can also benefit the seller. It frees up staff time and can increase customer satisfaction and drive more sales.
The bottom line is that customers now demand it, so B2B businesses need to adjust to this. In an Episerver B2B survey, buyers were asked to select the three ways B2B companies can make it easier to buy online.
Self-service functionality was a close second to pricing, which itself enables customers to buy online.
Understandably, some B2B businesses may find it harder to move to a full self-service model. Perhaps the product is less suited to this, the need for custom ordering options make it more complex, while some are less keen to reveal pricing.
As we’ve discussed earlier in this article, there are solutions to these issues such as custom quoting tools or to show pricing only to registered users.
The trend towards self-service in B2B ecommerce is not likely to go away, so companies will need to work around objections and offer customers what they expect.
Trend 2. Marketplaces and Omni-channel.
The common thread between these two trends is that businesses need to be where customers are and to account for the different channel preferences of B2B buyers.
Consulting firm iBe predicts that B2B marketplaces will be worth $3.6 trillion by 2024, accounting for 30% of global worldwide sales. Marketplaces like Amazon and Alibaba have been expanding into B2B, with Alibaba claiming more than 10 million B2B buyers on its platform.
For buyers, marketplaces can make the process easier – they can filter to search for specific products, and compare prices and other key aspects such as delivery times side by side between different suppliers.
The use of marketplaces in B2B is growing and some B2B companies may be reluctant to use marketplaces. However, buyer demand and the benefits of access to these prospective customers may well make the case for them.
The trend to omnichannel is about being where buyers are throughout the research and sales process. B2B buyers are now using up to six different channels according to McKinsey research, though 65% of these customers are frustrated by some of their experiences.
Customers may want to begin research on one channel, and move between channels as they move through the process. For example, they may begin to research on your website, before booking a demo and completing the transaction elsewhere.
The challenge for B2B brands is to provide a seamless experience and to work towards a point where they can be present on multiple channels for customers, offering a consistent experience.
This is easier said than done, and it can help to consider the channels your customers prefer to use, and those where you can provide the best experience and value for them.
Trend 3. Personalization.
Personalization is both a benefit and a challenge in B2B ecommerce. The move to selling online opens up the opportunity to learn more about customers and use this data to improve their experience.
This in turn can help to create a better experience for buyers, with more relevant marketing, on-site content, and more effective up-selling and cross-selling.
Buyers are increasingly expecting personalization, with 73% of B2B companies reporting increased customer demand in this area. B2B suppliers are moving towards personalization, with 51% using basic personalization (such as using a prospect or customer’s name on login) while 48% offered some personalized content on-site and in email marketing.
The challenge is to put it into practice, and effective personalization isn’t always easy. The data sources are there, but many marketing suites used by B2B marketing teams don’t allow for advanced personalization, so teams can find themselves waiting for budget and resources from IT teams to move forward.
The benefits are there for companies that can achieve this though. 91% of B2B buyers think they are receiving a better experience, and that the company cares about this experience when they see personalized content.
For suppliers, B2B ecommerce presents a few challenges but is also a great opportunity to grow their business, move into new channels, and to appeal to greater numbers of potential customers.
It will increasingly become – if it hasn’t already – an absolute essential for any supplier to be online.
The current generation of B2B buyers already expects suppliers to be online, and the next generation will likely see ecommerce as a hygiene factor – they’ll simply fail to understand why they can’t research and buy online.
To conclude, the move to B2B ecommerce is a must, and the goal is to create the best possible online experience for buyers, provide the features that make them more likely to buy, and to make your services accessible where potential customers are, whether this is a marketplace, or whichever channel the buyer prefers. Grow your business with a flexible ecommerce solution from BigCommerce and offer your B2B buyers the simplicity of a modern, consumer-like shopping experience. Request a demo.