Introduction
While B2B eCommerce has a larger market size than B2C, it still falls behind in adopting technology. This is because traditional B2B customer expectations revolved around price and product, with human sales teams negotiating deals meant to last for years. The shift to online retail has transformed these dynamics.
While B2B businesses have more deal requirements than B2C, the industry is ready for digital disruption. The good news is that more wholesalers and distributors are embracing new technology to enhance their B2B shopping experience.
B2B eCommerce evolution
Traditional B2B setting
In the past, engaging in traditional B2B transactions required participating in trade shows, carrying physical catalogs and samples from one location to another, and manually placing orders, either through phone calls or in-person visits. Inventory was handled manually, and orders were often faxed or submitted face-to-face.
Unfortunately, despite the advancements in technology, many B2B businesses still operate using these outdated and cumbersome methods.
Dot-com boom and decline
B2B eCommerce emerged only in the last couple of decades. Between 1995 and 2000, the dot-com boom saw a rise in the value of Internet start-ups, with significant investments. This period witnessed unprecedented technological progress and the commercialization of the Internet.
As a result, many companies started exploring the development of B2B eCommerce platforms. Unfortunately, these platforms were mainly designed for large companies dealing in industrial supplies, chemicals, machinery, and equipment.
However, the dot-com bubble burst due to market overconfidence and excessive speculation. In a short time, billions of dollars in market capitalization became worthless. The surviving companies were those that primarily provided solutions for large enterprises.
B2B punchout catalog
In the mid-nineties, some big companies started developing B2B eCommerce solutions to improve the procurement system and enhance the customer experience. Known as the B2B PunchOut, it’s an e-procurement software connecting the customer’s procurement system with the supplier’s eCommerce platform.
This software aims to enhance the customer experience by allowing them to ‘punch out’ from the procurement system. They can browse online product catalogs, add items to their cart, and complete the checkout process. The customer’s details and transaction history are then ‘punched back in’ to the relevant procurement system.
This automation not only improved the efficiency of the procurement process, making it more cost-effective, but it also eliminated low-value tasks from the procurement department. This shift allowed them to direct resources toward higher-value tasks like negotiating contracts. Some of these networks, such as SAP Ariba and Insite, continue to operate today.
However, during this period, the focus was primarily on large enterprises and didn’t extend to small and medium-sized businesses until later.
SME B2B eCommerce experience
With the significant rise in B2C eCommerce, numerous small to medium-sized enterprises began constructing custom B2B eCommerce websites. Typically, these were developed on open-source eCommerce platforms like Magento, originally designed for B2C purposes. However, this marked the initial move into B2B eCommerce, albeit at the cost of tweaking B2C technology to fit the B2B context.
The intricacy of such digital constructions, coupled with their maintenance expenses, rendered it nearly impossible for small-to-medium business owners to replicate the same. Presently, we observe more distributors and manufacturers recognizing the significance of embracing a customizable B2B eCommerce solution. This often involves constructing an eCommerce platform tailored to B2B needs. While this is a positive stride, the adoption rate remains relatively low compared to B2C.
Unseen side of B2B
While we’re well-acquainted with Amazon’s role as a primary retail destination, fewer people are aware of its operations as a B2B industrial distributor.
Amazon has entered the B2B market, selling billions of dollars worth of non-traditional items like industrial chemicals, fertilizers, and raw materials.
This move allows registered businesses to purchase industrial goods online in bulk, often benefiting from volume discounts.
In this evolving B2B landscape, products are going directly to retail, not just materials to manufacturers. For instance, think about tomato sauce.
Before a bottle hits the shelves, numerous B2B transactions occur behind the scenes, involving fertilizers for crop growth and chemicals for processing corn into fructose.
Consumers and most direct-to-consumer (DTC) brands typically don’t engage with this industrial complexity. It remains within the realm of established enterprises.
However, there’s a thriving space in consumer packaged goods where “homemade” tomato paste, gourmet ketchup, and artisanal spaghetti sauce bridge B2C and B2B eCommerce. These products secure shelf space even in major retailers.
In essence, there’s an industrial B2B world we’re not part of, alongside a retail B2B or retail-product B2B. This is complemented by a B2C counterpart.
When considering B2B companies lagging in technology adoption, it’s often those without exposure to B2C in their business.
B2B technology still trails behind B2C
B2B technology is trailing behind B2C, and unless B2B businesses have tech-savvy leaders promoting digital innovation, this lag will persist.
McKinsey & Company assessed the Digital Quotient (DQ) of B2B companies compared to B2C, revealing a significant gap. B2B falls short across four dimensions: strategy, organization, capabilities, and culture.
Strategy
B2B often treats overall and digital strategy separately, with only 10% prioritizing digital investment. This results in fragmented digital strategies.
Organization
B2B’s organizational maturity DQ averages 27 compared to B2C’s 35. Leadership struggles to communicate digital strategy clearly, leaving 75% confused about roles and ownership.
Capabilities
Lower strategic focus hampers digital capabilities. B2B lacks effective use of social media, digital content, and advanced analytics, resulting in an unsatisfactory customer experience. Digital automation is applied internally, leading to a clunky customer buying experience.
Culture
While B2B is not far behind in cultural agility, less than 15% adopt test-and-learn approaches crucial for digital initiatives. A third takes over a year to implement digital ideas.
The consumerization of B2B is relentless, urging B2B businesses to embrace technology to bridge the digital gap.
How to enhance the B2B online purchasing experience
One significant contrast between B2B and B2C is that wholesalers purchase for a brand and target market, while retail consumers buy for personal use. However, do the expectations of the buying experience differ significantly?
B2B buyers generally have specific wants and needs, emphasizing the importance of personalization in crafting an excellent B2B eCommerce experience.
Effective search and browse features
A car parts dealer seeking a specific spare part for a car model X might prioritize efficient and thorough product searches over website aesthetics. On the other hand, a clothing business owner would likely prefer a seamless browsing experience to explore diverse purchase options from the seasonal catalog. This includes the ability to purchase 60 pieces in various colors, sizes, and designs. Hence, the process of adding multiple options should be straightforward while keeping the purchasing steps simple.
Digital line sheets for streamlined orders
In today’s digital era, there’s no need to print physical line sheets when you can easily switch to a digital version. A digital line sheet is a dynamic document accessible on your B2B eCommerce platform, allowing buyers to log in 24/7 and make updates as needed.
This digital approach simplifies the ordering process. Buyers can quickly see if items are out of stock, receive real-time updates on inventory levels during each store visit, access order history, and use the ‘re-order’ option for faster checkouts. Additionally, you have the flexibility to customize price lists and currency types based on the buyer’s preferences.
These features empower both suppliers and retailers to adapt their purchasing strategies, ultimately saving time and money.
Self-service B2B eCommerce is changing the game
In the world of B2B, self-service is making a significant impact. Many B2B buyers now prefer to explore and understand products independently, without relying on a salesperson. However, finding the necessary information can be a challenge for these buyers.
Frequently, the information they seek is buried deep within a website, tucked away in a resources tab, or hasn’t been added at all. Such organizational setups can be unhelpful for business buyers. If they can’t find the information they need from you, they’re likely to turn to a competitor.
Enabling self-service through a B2B eCommerce platform offers a significant advantage. It empowers buyers to research and make purchases intuitively, greatly enhancing customer satisfaction and increasing the likelihood of completing a purchase—assuming the platform’s functionality provides a positive experience.
Opportunities in B2B eCommerce
AR & AI enhancing customer experiences
In B2C eCommerce, augmented reality (AR) and artificial intelligence (AI) are increasingly intertwined. Virtual assistants now gather data on buyer behavior, allowing entrepreneurs to tailor the customer experience.
Online B2B stores could also adopt this technology for more immersive interactions with buyers, especially for product demos that traditionally needed in-person visits and travel.
Social selling transformation
As traditional outbound B2B sales lose their impact, individuals are steering clear of sales representatives and incorporating social channels into their purchasing journey. Remarkably, three-quarters of B2B buyers use social media to interact with peers regarding buying choices, and peer endorsements influence over 65% of B2B buying decisions.
Social channels are poised to gain greater prominence for B2B enterprises. They provide an avenue for more substantial conversations with potential customers, enabling the collection of valuable insights. This information proves instrumental in enhancing targeting and personalization throughout the customer’s buying process.
The modern B2B buyer
Consider this: How are you incorporating digital technology into your business?
While you might have successfully cut internal costs and enhanced operational efficiencies by updating your IT infrastructure, the most promising opportunities lie in sales and the customer experience. The sooner you initiate efforts to leverage new technologies for enhancing your B2B customer experience, the more advantageous it will be for your business in the long term.
About Qoblex
Since 2016, Qoblex has been the trusted online platform for small and medium-sized enterprises (SMEs), offering tailored solutions to simplify the operational challenges of growing businesses. Specifically designed for B2B wholesalers, distributors, and eCommerce ventures, our software empowers users to streamline operations from production to fulfillment, allowing them to concentrate on business growth. Qoblex efficiently manages inventory and order data across multiple sales channels including Shopify and WooCommerce, integrates with popular accounting systems such as Xero and QuickBooks, warehouses, and fulfillment systems, and boasts a robust B2B eCommerce platform. With a diverse global team, Qoblex serves a customer base in over 40 countries, making it a reliable partner for businesses worldwide.
