future of b2b e-commerce

It may get less attention, but the B2B e-commerce industry is on track to reach US $1 Trillion (twice the size of B2C e-commerce) by 2020 as estimated by Forrester. Brian Beck, SVP of E-Commerce & Omni-Channel Strategy at Guidance, believes that it could be even larger if B2B companies provided the easier-to-use online experiences that their customers are asking for. After all, B2B buyers are consumers as well, and they have high expectations for their digital experiences. According to Forrester, 55% of B2B buyers expect to be buying the majority of their work purchases online. Yet many suppliers are either not giving their customers the opportunity to buy online, or their online experiences are not sufficiently meeting customer needs.

future of B2B e-commerceI interviewed Brian — a recognized expert in commerce, online marketing, web and mobile experience, organizational alignment, and omnichannel strategy — to learn more about the challenges the B2B e-commerce industry is facing and the opportunities for growth.

In what ways does B2B e-commerce differ from B2C e-commerce?

B2B e-commerce has a lot in common with B2C e-commerce, but there is added complexity. You could call it “B2C e-commerce plus.”

The main difference is that B2B buyers are shopping as part of their jobs, while consumers are shopping for their personal lives, often for fun. Typically, B2B companies have a smaller number of buyers that make larger purchases. So while B2C e-commerce marketing often focuses on selling a lifestyle and developing a strong brand name to millions of consumers, B2B e-commerce succeeds when it makes the buyer’s job easier and saves him or her time. This means that B2B sites need to deliver the same type of experience as a B2C site, but tailored to B2B needs. For example, pricing displayed on the website needs to be accurate, as it can differ for each account based on contractual agreements. Different payment options need to be available for B2B buyers versus consumers, such as payment on credit terms.

What can B2B e-commerce professionals learn from their B2C counterparts this year?

B2C e-commerce has had time to grow and develop through hard-learned lessons over the past two decades, while many B2B companies are just getting started with e-commerce. So B2B pros can learn an enormous amount from B2C pioneers.

I encounter many existing B2B e-commerce sites that are hard to use, with clunky user interfaces. They have evolved from – or are extensions of — enterprise resource planning (ERP) software solutions and have not been built with the end customer’s digital experience in mind. Some don’t even offer images of products or display product names, opting to show lists of SKU numbers and quantity fields instead (really a glorified spreadsheet). There is a lot to be learned from the research and testing B2C e-commerce marketers have done over the years around their site experience. For example, they can emulate the way that successful B2C sites offer easy-to-use navigation with a clear site taxonomy, effective site search that quickly delivers a relevant results set, easy checkout processes, clear shipping terms and options, etc.

Outside of the site experience itself, there are all kinds of marketing tactics that B2C practitioners have been using successfully for years — like paid search, email, display ads, social media, and marketplaces such as Amazon. B2B marketers can take learnings from B2C and apply them to their businesses. There a key differences because the buyers are different, of course, but they can draw on what B2C marketers have learned to build effective digital marketing programs.

What can personalization bring to the B2B e-commerce experience?

Historically, B2B sales have been driven through personal, one-to-one relationships between a salesperson and a company. So from the start, there is the expectation of individualized communication and tailored experiences among B2B buyers and customers. The promise of personalization in B2B e-commerce is enormous. It allows B2B companies to better translate their offline sales experience to the online world.

My point of view is that personalization has the potential to be even more effective in B2B than in B2C. That’s because B2B companies know a lot about their customers, and effective personalization begins with a deep understanding of each person and account. As opposed to B2C sites that serve millions of customers (in addition to many anonymous visitors that have never purchased before), B2B companies tend to have a smaller customer base that buys regularly. So B2B companies will often know the ins and outs of their customers’ businesses very well. In many cases, they have worked with their customers for decades, and as a result have long order histories, preferences, and personal relationships to draw from. The trick, of course, is to effectively leverage this information to deliver personalized experiences on the web.

What are some good personalization best practices for B2B e-commerce?

First and foremost, custom pricing is absolutely critical for B2B e-commerce. Many B2B buyers will negotiate specific pricing in their contracts, usually with the seller’s sales team. If this pricing is not correctly reflected on the website, then the e-commerce site will cause frustration and not be successful. Buyers will avoid using the online channel. No rational buyer wants to pay more online than they could when ordering from a salesperson or through a call center. To display the correct pricing, the site needs to be integrated with an ERP or CRM system to populate each customer’s pricing terms.

I’m also seeing B2B e-commerce sites invest in personalized dashboards, which provide information about a customer’s past purchases, allow for easy reordering, and present content the customer may learn from. These dashboards can deliver highly relevant product recommendations based on what the customer has ordered in the past and how they’ve searched or browsed the website. And users can obtain support or application information based on products they already own from the seller (such as machines they have installed at their facility).

Some of the more sophisticated companies we work with are also tying digital behaviors to offline channels, to enhance the effectiveness of the entire organization. For example, some companies are integrating their e-commerce site with the sales teams’ CRM system (solutions such as Salesforce.com). When a customer takes an action on the website that the sales team should know about (such as adding an item to the cart but not purchasing), an activity is created in the CRM system to alert the appropriate salesperson so he or she can follow up with the client offline.

What’s your favorite example of a great personalization experience in B2B e-commerce?

One of my favorite examples of a B2B e-commerce experience is from a client of ours, a global biotech company selling large capital equipment and the consumables that are used within these machines. The company launched its e-commerce site about a year ago, and it has already generated hundreds of millions in revenue from the new channel.

What’s interesting about it is that it’s a great example of a company achieving success by listening to its customers. The company had attempted to launch an e-commerce site in the past, but it was unsuccessful. The major flaw? Simple: the site did not present personalized pricing to each customer, so customers were not using it. But with its new e-commerce site, visitors are required to log in and — based on those credentials — the site will display the correct pricing from the contract with real-time calls to the company’s ERP system. It also recognizes the permissions that specific person has and displays appropriate features accordingly, such as purchase permissions.

Internet Retailer recently released a statistic that 50% of all manufacturers do not yet have an e-commerce site. I believe a large percentage of these companies are in the mid-market. 2018 is the year that these mid-market companies will start putting the foundations of e-commerce in place — moving beyond ERP ‘green screen’ interfaces to deliver the true e-commerce experience that their customers are demanding. Meanwhile, large enterprises that already have established e-commerce presences will invest in more personalization to drive better, more relevant experiences. They will continue to integrate content with commerce. And they will invest in developing holistic cross-channel experiences.

Wrap Up

Thanks to Brian for sharing his expertise with us. Check out Brian’s posts on LinkedIn for more insights.