B2B e-commerce: from exotic to standard
E-commerce has long been established in B2C, but it is only now that things are really getting exciting in B2B online business.
The digital transformation is also bringing about numerous changes in various areas of B2B. Those who want to keep pace with this development have to fully digitalize their business and adapt not only their production, products, communication and collaboration, but also their sales. This article describes the status quo, the differences and similarities between B2B and B2C as well as the challenges facing B2B online trade.
The status quo in B2B online trade
In the study “Online-Verhalten im B2B-E-Commerce” (Online Behavior in B2B E-Commerce) conducted by the ibi research institute of the University of Regensburg, three quarters of the B2B companies surveyed stated that they were already generating sales in e-commerce, although often to an insignificant extent. For as many as 17 percent of companies, online trading has already become the most important sales channel, generating more than half of their sales. In contrast, 26 percent of the respondents achieve less than 5 percent of their turnover via e-commerce.
We can see very clearly from these figures that there is still a lot of room for improvement in B2B online trade. This is particularly true in comparison with the B2C sector. Although there are natural differences to selling to businesses and end users, there are also similarities.
In B2B online trade:
- the target groups are smaller
- the volume of orders is often much higher
- the products require explanation
- prices are more customer-specific
- customers are often more loyal
On the other hand, there are similarities like the shop’s technical requirements:
- inventory and delivery information in real time,
- sufficient information on all entries in the product catalog,
- an intelligent search function
- individual features such as watch lists and order history
- simplicity of use
Challenges for B2B e-commerce
The most fundamental challenge right from the start: digitalization has made what was once an optional online shop into a compulsory task for B2B companies. On the one hand, the requirements of B2B customers have changed. Like B2C customers, they want to use as simple, seamless and dynamic distribution channels as possible instead of browsing through printed catalogs and sending written orders. On the other hand, digitalization is accompanied by globalization. While the number of providers in many markets was previously very manageable, buyers in e-commerce can now find new contact points with just a few clicks. This ultimately also means that e-commerce is increasingly becoming the standard in B2B.
However, globalization is not just a threat, but at the same time a great opportunity. Those who internationalize their B2B online shop can tap into entirely new target groups, which they can hardly reach via traditional sales channels like print catalogs or direct sales with their sales team. The challenge here is to take local requirements into account. From a legal point of view, for example, these can deviate from the home market. It is also possible, however, that buyers may have different requirements, for example with regard to payment methods, shipping or returns.
The devil is in the detail
The above mentioned technical requirements are not a big challenge because they are covered by common shop solutions. However, special B2B requirements such as displaying customer-specific prices based on negotiated discounts or ordering without VAT quickly push some standard shops to their limits. The shop system not only needs to be connected to the merchandise management system, but also to the ERP system. This is the only way to end up with dynamically personalized customer experiences that help increase customer loyalty and conversion rates.
There is also an increasing variety of devices that B2B shops have to cope with. In the future, machines will increasingly place orders as part of various IoT scenarios. Finding a suitable solution here can become a challenge and require special B2B shop systems.
The bottom line
B2B online trade will continue to grow in the coming months and years. Although we are still far away from the B2C sales figures, the initial phase was rather sluggish in that area as well. With the launch of Amazon Business and other B2B marketplaces such as Alibaba or Mercateo, the entry hurdle for digital sales will again be significantly lowered. But beware: the use of the large marketplaces has advantages and disadvantages in B2C as well as in B2B. In individual cases, it is important to carefully consider which solution makes more sense and which strategy is considered more promising.