B2B eCommerce is thriving post-pandemic, especially for companies that had well-established B2B programs already in place.
Before COVID sparked the shift from traditional to digital commerce, there was a growth spike in eCommerce during the mid-2010s that indicated that the next logical phase of business development was on the internet, and this was something not to be taken lightly. As traditional in-person methods of marketing began to lose ground in favor of the speed and efficiency which eCommerce can provide, B2B businesses were wise to adapt to the changing landscape.
In a recent survey conducted by Digital Commerce 360 and Tradecentric, it was found that B2B saw exceptional growth in the past few years since going online. In terms of how long companies have been engaged in the B2B ecommerce market, there is an even split in the business market. The survey, which polled more than 100 B2B buyers from a number of different industries and companies, revealed that those who have successfully implemented and are now actively operating B2B ecommerce platforms have also been at it for at least 6 years. Newcomers to B2B eCommerce accounted for the lowest percentage of respondents who were doing business over the Internet. 10% of the participating companies have only been involved in eCommerce for a short period of time, whereas 20% have been involved in ecommerce for over a decade.
Points of Interest
Only 17% of respondents noted that they had implemented full end-to-end integration of commerce transactions. This entails procurement software and punchout catalogs, automatic purchase orders and invoices, as well as software for managing the purchase of goods. Several factors that prevented the execution of a connected commerce program included a shared fear of being replaced by automation from sales representatives and company IT departments alike; senior management’s stubborn adhesion to obsolete traditional practices and their failure to comprehend the business benefits of connected commerce; and the potential loss of business due to buyers seeking to work with suppliers that offered quick, easy, and accurate transactions.
However, the survey also pointed towards signs of hope that more businesses were progressing towards modern B2B connected commerce. Over half of the respondents said that they already provide advanced levels of B2B ecommerce, including personalized custom product catalogs and personalized buying experiences to customers. Two-thirds of the survey respondents indicated that at least 21% of their customers desire e-procurement system integrations.
Newcomers to B2B ecommerce accounted for the smallest proportion of respondents in the survey. The majority of the survey participants had been in the business for only one or two years, while 20% had been in the business for 10 or more years.
B2B eCommerce Going Forward
According to Straits Research, the size of the B2B eCommerce market in the United States in 2021 was valued at $1,476B USD. In 2022, B2B eCommerce sales jumped 19%. Manufacturing and distribution sales online grew faster than total B2B sales, accounting for 13% of all sales. There is a projected growth in the market size by 2030 to $8,573B USD, with a CAGR of 21.6% expected during the forecast period (2022-2030).
There is a critical transitional change in the B2B eCommerce purchasing behavior that is vital to propelling the market forward. The market is also expected to grow over the next few years owing to the increasing popularity among businesses of B2B eCommerce, as well as the adoption of B2B models by a number of major eCommerce companies. Despite this, a lack of visibility to the market is perceived as one of the potential obstacles to the growth of the industry. The market will benefit, however, from integration of value-added services from the B2B eCommerce platforms as well as the B2B eCommerce platforms during the prediction period.
Determining Factors
- As regular consumers become more comfortable with everyday purchasing over the Internet, B2B is expected to follow in the footsteps of B2B eCommerce.
- B2B-centric eCommerce platforms allow for improved B2B-friendly purchasing environments online.
- There is a generational divide in the purchasing practices of younger ‘Millennial’ and ‘Gen-Z’ consumers and older ‘Boomer’ and ‘Gen-X’; younger consumers are more impulsive and tend to adapt to technology whereas older consumers are more inhibited in their spending and are avoidant of change.
- Increasing automation of the supply chain and other operations related to production and manufacturing; going digital allows for deeper observation and analyzing of the purchase and delivery processes from start to finish.
What B2B Buyers Want
In an earlier post, we listed the top 5 features most sought by B2B buyers. Fast search, personalization, virtual commerce/visual commerce, social media integration, and expanded payment options were the most requested by consumers.
- Fast Search retains visitors and improves conversions by reducing the bounce rate when shoppers cannot locate what it is they want to purchase.
- Personalization creates a customer-focused shopping experience that helps shoppers feel more welcome which leads to return visits, additional purchases, and greater sales over time.
- Virtual Commerce/Visual Commerce allows shoppers to virtually dissect and examine their chosen merchandise so they know exactly what it is they’re buying–all without actually being present to physically inspect said merchandise.
- More Interactivity and Social Media Integration blurs the line of user generated content (IE: social media postings) and direct sales pitches, which can often be intrusive.
- Expanded Payment Options give customers more incentive to spend if they’re not being forced to spend large bulk amounts at once and can, instead, spread out payments over time.
Demand is driven by consumer preferences. B2B buyers tend to have more insider knowledge of the product and corporate buying, while B2C buyers tend to have less knowledge of the product. At the end of the day, B2B buyers are still consumers and with young people now dictating the course of today’s commerce, their B2B buying behaviors will reflect their own B2C experiences.
What B2B Companies Need to Do
It is a constant struggle for every business to find new customers and it only becomes harder as more and more competitors pile into what is already a highly competitive market. The major hurdle that B2B companies have to overcome is trying to attract a target audience from a pool that tends to be more knowledgeable in terms of the product, the field, and the general inner-workings of business.
Much like any business, B2B companies greatly benefit from good PR, effective advertising and marketing, and through continued goodwill with their existing customer bases. But even as B2B shifts increasingly towards the Digital Age, it’s important that these campaigns not be based entirely over the Internet as people still appreciate face-to-face interaction. Of course, an engaging website, a solid SEO presence, and a strong online marketing program is always good to have but these efforts can also be bolstered by real-world socializing. Positive person-to-person interactions can lead to one of the most powerful methods of marketing: word-of-mouth. As people, we tend not to pay any mind to the mundane but hone in on experiences that register in the extremes–both the extremely positive or extremely negative. When companies make their customers feel appreciated, wanted, and special, they are more likely to do business with them. Corporate events also offer a great way to reach potential clients through networking and building new relationships while maintaining current ones.
For a more in-depth view on this topic, check out our previous article: Finding New B2B Customers.
While it’s important to take care of and maintain a select group of preferred customers, it’s very rare that continued business can be achieved simply by maintaining one group. Therefore, it is necessary to consistently reach out and attract new customers. A balanced combination of online and physical marketing methods can help B2B companies sustain the cycle of customer attraction and retention, which is absolutely crucial for success and growth.