Business-to-business (B2B) commerce will continue to undergoa major transformation in 2021 as companies adopt the latest technologies tofind new customers, improve their supply-chain efficiencies, and provide a morepersonalized user experience to their clientele.
B2B marketplaces and progressive web apps areamong the technologies that will see greater business adoption next year,according to several industry experts. They also predict that B2B commerce willlook a lot more like business-to-consumer (B2C) commerce with improvements tothe user experience and a greater emphasis on direct-to-consumer (DTC) sales.
The adoption of digital commerce strategies has become evenmore urgent amid the disruptions of the coronavirus pandemic, whose effects arelikely to last into 2021 and beyond. The health crisis not only exposedvulnerabilities in the global supply chain, but it also forced many companiesto implement safety measures like contactless fulfillment to protect workersand customers alike.
The disruptions are a major catalyst for digital B2Bcommerce, with many businesses setting the stage for longer-term growth as theglobal economy rebounds from the pandemic. While 53 percent of B2B decisionmakers said in July that they expected a revenue decline in the following year,86 percent planned to boost their spending on digital sales channels, accordingto a survey by research and advisory firm Gartner.
“As we recover, everyone’s expectations are that digitalworks,” says Mackenzie Johnson, marketing and partnership manager at BORNGroup, a digital marketing agency in New York. “Going into 2021, the customerexperience has to be excellent.”
Below, we explore what experts say will be the biggest B2Bcommerce trends in 2021.
1. B2B marketplaces will grow
Online marketplaces that bring buyers together with avariety of sellers have been around in some form for years, but they’reincreasingly becoming a key part of B2B commerce because they provide access toa wide selection of suppliers and products. Eighty-seven percent of B2B buyersare purchasing on online marketplaces, according to a recent study bymarket researcher WBR Insights. The growing popularity of B2B marketplacesmakes them an important go-to-market strategy for businesses of all sizes,whether they start their own marketplace or list their products on existingones.
“It’s critical for B2B companies to have a marketplacestrategy,” says Tom McFadyen, chief executive of McFadyen Digital, whosecompany has developed B2B marketplaces for clientele including brewerAnheuser-Busch InBev, construction and engineering company ABB, and consumerpackaged goods marketer Kimberly-Clark. “For some of the bigger companies, thebest strategy is often for them to run their own marketplace, while smallercompanies need to sell on marketplaces.”
B2B marketplaces can be horizontal or vertical, depending ontheir range of products and specialization, though websites like AmazonBusiness, the e-commerce giant’s fast-growing platform for enterprises, workboth ways. Horizontal marketplaces typically have products every businessneeds, such as office and cleaning supplies, though they also carry goods thatbusinesses, such as retailers specifically, buy in bulk for resale to consumers.
Vertical marketplaces tend to focus on a specific industrygroup like aerospace or manufacturing, giving suppliers a way connect with keybuyers. Examples of these marketplaces include GoDirectTrade.com, which global conglomerate Honeywellstarted two years ago to focus on new and used aircraft parts, and ABB eMart, a hybrid B2B and B2C marketplace forelectrification products in India.
“We’re seeing a lot of interest in marketplaces, largelybecause of the success of Amazon Business and other players,” says ShannonHane, senior product marketing manager for Magento Commerce at Adobe. “Buyerslike marketplaces because they can purchase from lots of different suppliersand see different kinds of products all in one place.”
2. B2B merging with B2C
B2B commerce increasingly will look more like B2C commerceas businesspeople continue to look for the same kind of online experience inthe workplace that they have as consumers. That’s especially true as themillennial generation, who has been steeped in internet technology sincechildhood, becomes the biggest part of the global workforce.
“Almost all millennials are comfortable buying online,whether it’s Walmart, Amazon, or Alibaba, because of the selection,” saysThomas Gaydos, chief marketing officer and marketing practice lead at McFadyenDigital. “Now that they’re in positions of power to make purchase decisions atwork, they tend to prefer that same model, but they’re not really seeing thatout there a lot right now.”
To emulate the B2C experience for enterprises, businessesneed to give their customers more tools to research products and services, andmake them easier to discover. Those tools can include recommendations on otherproducts to buy – a cross-selling strategy that helps to increase the averageticket size – and ratings and reviews submitted by buyers. Also important:providing detailed product information, images, videos, and downloadabledocumentation through the site to support customer research. Customers will domost of their research online before ever reaching out to a sales rep, so thequality of this research experience is critical.
Among the B2B companies that have added productrecommendations to their websites is Marshall Wolf Automation, a St. Algonquin,Illinois-based distributor of electronic parts and electronic communicationsequipment. The company experienced a 20 percent increase in average ordervalue (AOV) after pointing out other products for buyers to consider.
“The whole Amazon experience isn’t just the usability of theinterface and online returns, it’s also user-contributed content and all theother stuff that comes along with retail sites,” Gaydos said. “If you’re notadding that, suddenly you now look like even more of a relic.”
Whenever possible, businesses should seek ways to givebuyers as many self-serve tools as possible, including the ability to customizeindividual products even as they offer a broader selection. It’s also importantto showcase the advantages of a B2B e-commerce solution tohelp buyers get the most out of it.
“We recommend hosting a comprehensive onboarding processwith B2B customers to be sure they understand the value-add that comes withutilizing digital,” BORN’s Johnson says. “Without onboarding customers, fewercustomers will take advantage of the system, and you won’t be utilizing yourdigital stack to its fullest potential.”
3. Direct-to-consumer growth
As B2B commerce increasingly resembles B2C commerce,businesses that typically sell to middlemen like distributors and retailershave an opportunity to reach past them and connect directly to consumers. Whiledirect-to-consumer (DTC) selling heightens the possibility of greater channelconflict, it can be managed in a way that works for companies throughout thesupply chain.
Sportswear giant Nike is an example of a company that notonly has a broad B2B clientele of distributors, retail chains, and independentstores, but also a surging digital business that has become a vitalsource of revenue. With the pandemic dissuading shoppers from visiting stores,even those that have been allowed to reopen from lockdowns, digital channelsprovide a way for the company to sell a bigger selection of merchandise than istypically available at a store.
“A lot of manufacturers traditionally have had anarm’s-length relationship to end consumers,” says Adobe’s Hane. “More and more,they want a direct relationship because of the valuable customer data it provides. Theywant to test their products and get input more directly.”
As much as product manufacturers can benefit from DTCselling, their B2B channel partners also derive value from their othermarketing efforts by providing more detailed product information that helpssupport demand. Nike, for example, has a growing digital DTC business, but italso runs multichannel campaigns that drive sales for channel partners.
“Selling direct can be beneficial to channel partners,especially if a manufacturer is telling a really strong brand story,” Adobe’sHane said. “A lot of times, brands will allow customers to buy direct, butthey’ll also point them to their dealers and distributors if the customerprefers to buy that way. It’s not a zero-sum game.”
Meanwhile, many manufacturers are facing growing competitionfrom retailers that have created their own private-label brands that sell forlower prices – and yet are still more profitable.
“It’s a two-way battle that’s happening as retailers startto build their own private-label brands and make their own brands andproducts,” McFadyen says. “To counter that, manufacturers are starting to selltheir products direct-to-consumer. The buzzword is ‘disintermediate,’ orremoving the intermediaries of a wholesaler or distributor.”
Companies that sell directly to consumers have anopportunity to collect vast amounts of data about their customers in real-timethat aren’t available through traditional sales channels. They can harness thatinformation to provide a more personalized experience that boosts sales whileimproving customer satisfaction and loyalty.
Personalized features can include product recommendations basedon order history, reminders, automated reordering, and prefilled forms thatease the friction toward checkout. A “searchandising” strategy that uses dataand machine learning to sort and highlight products in search results based onrelevancy, customer behavior, past purchases and business rules can helpcustomers discover other products and value-added services.
Increasingly, personalization will consist of “headless”commerce solutions, which separates content management – or the“head” – from back-end commerce functionality like order processing, security,and payment. The separation gives businesses greater flexibility inpersonalizing the front-end experience, while giving them a way to extend theirreach among a wider variety of platforms and customer touchpoints outside of ane-commerce site.
“A headless solution combined with segmented audiences basedon quantitative and qualitative data is really powerful in providing apersonalized experience,” McFadyen’s Gaydos said. “Again, we’re talking aboutthe ‘Amazonification,’ if you will, of the B2B experience.”
5. Progressive web apps
As part of their spending on digital B2B commercetechnology, more businesses will create progressive web apps (PWAs) that behavelike mobile apps but are created with common web technologies available onalmost any mobile device. Because PWAs are web-based, they’re easier tomaintain and update. Customers simply go to a website, rather than having todownload the latest version through app stores, whose quality-control processesmay delay their approval.
“PWAs are merging the best of the responsive web, which mostpeople expect now, with mobile devices,” McFadyen said. “Customers expect thatyour website’s going to work on a desktop, laptop, tablet, or mobile phone, butthey also like the speed and usability of apps that you download from Apple’sApp Store or from Google Play. A PWA is the best of both worlds.”
Businesses can use PWAs in a variety of ways to supporttheir remote sales teams or to give customers quick access to online resources.For example, a seller of construction supplies who visits job sites can use aPWA to showcase a broad catalog of products and help customers place orders forequipment and materials.
PWAs can be integrated with smartphone functions like thecamera and messaging, so B2B sellers can unlock a broad range of features. Thesmartphone camera can scan barcodes on products or forms, for example, toprovide more information easily or to allow customers to place reorders.Businesses can send push notifications that remind customers to reorderproducts or to highlight discounts and promotions.
In addition, PWAs work offline and in places that may havelimited connectivity to the internet, which is especially important for B2Bsellers where the cellular infrastructure isn’t as reliable.
6. Fulfillment pivots toward safety
The coronavirus pandemic not only helped make digital saleschannels more vital for B2B marketers, it also profoundly changed theirback-end operations in several ways. For example, to protect workers inwarehouses and stores, businesses developed methods to ship products in waysthat limit personal contact among people who used to interact in closeproximity to get the job done.
Buy online, pick up in store (BOPIS) service is now morecommon for retailers that want to give shoppers more peace of mind, and B2Bmarketers are taking a similar approach with distributing products to retaillocations and their clientele. Distributors with retail locations also areadding BOPIS services. These procedures are likely to remain in place as longas the pandemic remains a public health threat.
The health crisis has also highlighted the need for B2Bmarketers to be flexible, especially amid shortages of products manufacturedoverseas. The problem is especially acute in the healthcare industry, withsuppliers to hospitals and healthcare facilities facing shortages on productslike personal protection equipment (PPE).
“One of the ways around dependence on a single supplier is aB2B marketplace,” McFadyen says. “When you have a lot of third parties tofulfill orders, you can still help customers find products even if they’refulfilled by another company. You don’t want to tell your customer, ‘Sorry, no,we don’t have it. You better go shop somewhere else.‘”
Rob Williams October 28, 2020