B2B: Move Over B2C, it’s My Time to Shine
Where size matters, B2B is the clear winner.
Why you NEED a B2B E-commerce Platform: Building a Business Case for B2B E-commerce
B2B e-commerce features prominently in any discussion on the future of B2B commerce, both on online and offline forums. Attend any B2B conference or browse through a B2B commerce blog and you will find something on the consumerization of B2B or how millennial B2B buyers are shifting B2B purchases to mobile etc. Is the hype real? Is there a strong business case for B2B e-commerce?
We have your answers!
Here is our Business case for B2B e-commerce: We have split our findings into two clear categories, a) Benefits from Adoption b) Market Drivers for Adoption. Let us consider each one of these:
Benefits from Adoption
Revenue: Grainger a fortune 500 industrial supply company has been an early adopter of B2B e-commerce. Grainger has reported an increase in e-commerce sales by $4.76 billion from $4.09 billion in 2015 as e-commerce accounted for 47% of total sales, up from 41% in 2015.
Costs: Forrester found that B2B companies could decrease sales costs even up to 90% through the provision of an online self-service environment. In another survey done in 2013 by Forrester, 52% B2B e-commerce executives reported a decrease in their customer support costs after migrating their offline-only customers to an online purchasing environment.
Market Drivers for Adoption
- buy Online
- A recent survey of B2B buyers, done by Forrester revealed that 32% of respondents made half or more than half of their B2B purchases online.
- And, more than half of them (53% to be precise) expect that more than half of their business purchases will be made online in 2018.
- Why the shift towards buying online? Can shop 24 hours a day and faster transaction speed.
- buy on B2C when they can
- Research firm Forrester found that B2B buyers often made B2B purchases from B2C online merchants when products are available. 82% of B2B buyers had reported making B2B purchases on Amazon’s consumer site instead of its business site Amazon Business – Forrester Survey.
- will buy on mobile in future
- Around 52% of B2B buyers already do product research on smartphones, as per a Forrester survey. These B2B buyers may soon expect to complete their purchases on mobiles.
- Millennials are heavy mobile users and already form a major proportion of business purchasers. B2B commerce needs to accommodate their buying habits by enabling mobile purchases.
Competitors are already in/planning,
- to enter the online market
- Accenture did a survey among B2B companies, with at least $500 million in yearly revenues, and found that 82% of them have a B2B e-commerce portal to facilitate online sales. e-commerce adoption in the B2B segment is growing and customers may soon prefer vendors who offer online purchase options.
The B2B e-commerce market,
- by 2020 will be twice the size of B2C market ($6.7 trillion vs. $3.2 trillion) – Frost & Sullivan
- by 2020 will comprise 12% of all B2B sales in the USA by 2020 – Forrester
Do you need more reasons?
We think not!
Now you know why you need to get on the B2B e-commerce bandwagon. Let’s proceed to how.
The first step: Choose the right B2B e-commerce platform for your business.
We will now outline the importance of getting this right and how to do so.
When B2B companies look around for the right platform, odds are…
They pick a B2C platform and try to re-purpose it for B2B/ they invest in expensive on-premise solution/ get a general Software-as-Service (SaaS) solution
What to look for?
A B2B online store that makes the job easy for their consumer – The B2B Buyer. The trend towards consumerization of B2B is misplaced in a way. While B2B e-commerce can adopt certain B2C practices that improve customer experience, blindly aping B2C style will not work. Mapping the customer journey and adding features that simplify purchasing tasks will fetch better results. B2B companies must give their audience an intuitive, feature-rich self-service e-commerce platform that lowers costs, grows sales and enhances customer experience.
Why picking the right B2B e-commerce Platform is Important?
B2B sellers must be where their buyers are – Online.
Customer experience will be the new battlefield – say 89% B2B firms in a Gartner survey.
A step-by-step guide to choosing the right B2B e-commerce platform
1) Questions You Should Ask
2) Strategy and Best Practices
3) Evaluation Criteria
4) Parameters for In-depth Analysis
1) Questions You Should Ask
- What are your company’s objectives for the e-commerce store?
To know which platform and which deployment method are right for you, identify your business needs first. Prepare a business case for e-commerce adoption. Consider your revenue model, conversion rate, average order value and customer life to set your ROI expectations. Doing this exercise will help you define your expectations, assign priorities and set goals to be achieved.
Define use cases tailored to the B2B purchase environment and make sure you define the user interface to suit that. Understand the current sales process and identify key elements in the workflow and make sure you have features that address these workflow requirements in the purchase process. Lastly, detail the customer experience you want to provide like, product merchandising (images, descriptions etc), custom pricing, promotional content etc.
- How many resources do you want to dedicate to maintaining your B2B e-commerce site?
Different software delivery models have different resource requirements and may need different levels of maintenance. Companies with extensive IT resources opt to develop and host their own solutions while others license it from a vendor and host it internally. These two models allow in-house IT teams to make upgrades and modifications to software when needed. Others work with SaaS vendors who provide fully-managed solutions in which the vendor is responsible for hosting, maintenance etc. The SaaS approach is suitable for startups, SMBs and mid-market companies with fewer IT resources.
- How suitable is the platform for B2B commerce?
Check which platforms are meeting the needs of businesses with similar product lines. Magento is one such open source platform that has acquired a positive reputation among B2B users. Magento software caters to the unique needs of B2B users such as bulk order management and inventory tracking across multiple warehouse locations.
- Is the platform customizable?
Most e-commerce platforms have standard features and do not allow a very high level of customization. Once you have defined your unique requirements choose a flexible platform that allows you to customize features to suit your workflows and processes. Magento Enterprise edition allows a lot of flexibility and is a good fit for B2B needs.
- How much integration do you need?
Integration of your e-commerce platform with pre-existing software like ERP, CRM and accounting solution is crucial for the success of your online store. An integrated IT environment improves business efficiency. Analyzing the current technical environment of your business can help you understand integration needs and choose a platform that allows easy integration. Integration automates communications replacing the time-consuming, costly and error-prone manual process.
Picking the right B2B e-commerce platform for your business can be a daunting task. There are a host of factors you need to consider, like functionality, technology, support and adoption challenges. Getting the strategy right and using best practices will ensure a smooth transition. Here are a few steps that can form the foundation of your B2B e-commerce implementation,
2) Strategy and Best Practices
- Identify your Requirements
- Discover possibilities for cost savings and growth
- Describe your desired User Experience
- Chalk-out Integration Requirements
- Pick the best Hosting Model
- Build an Implementation Plan
Once you have a strategy in place you need to evaluate all available platforms for suitability. Here is a list of criteria you can use for an initial evaluation to shortlist probables. You can follow this up with an in-depth analysis to arrive at your final choice.
3) Evaluation Criteria
Evaluate different platforms on the following criteria:
- Pricing models
- Total cost of ownership
- Fit for business size
- Customization of
4) In-depth Analysis
B2B e-commerce requirements and challenges differ significantly from B2C owing to the difference in purchase patterns, volumes, order values, and processes. Your platform should provide functionalities that meet these special needs:
- Responsive Design
Check for responsive design that renders your web-content properly across multiple devices. Buyers hop across different devices in the purchase process. Responsive design accommodates such buying behavior.
The Self-service purchasing trend is huge in B2B e-commerce. Buyers want the necessary information to arrive at their preferred product/solution mix. Customers also want to be able to find all information related to a purchase like shipping information, quote approvals etc., without any hassles. Ensure your e-commerce store is primed to deliver all the above features.
- Customer Specific Pricing
A special feature needed for B2B e-commerce is the ability to offer customer-specific pricing and items to buyers based on their purchasing patterns and purchase history. B2B e-commerce platforms should have the option to list different prices for each customer.
- Payment Options
B2B and B2C purchase patterns differ vastly. B2B purchases are usually high-value products or bulk orders or both. Payment options also need to be tailored to B2B purchasing patterns. Part pay options and paying for one or more invoices in one go are some things to consider for inclusion.
The platform type you choose for your B2B e-commerce store is going to determine how well it functions. Here is what you should consider while choosing a platform:
- Hosted, On-Premise vs Cloud-based.
On-premise platforms will be hosted and maintained by you. A cloud-based e-commerce platform is hosted and maintained by the cloud service provider. On-premise systems require you to dedicate IT resources to maintain the platform, while fully managed cloud solutions require no such provisioning of IT resources. Cloud and on-premise systems differ in the level of customization, the level of operational burden, PCI compliance, security, and costs. Cloud solutions bundle all these into one solution and offer competitive costs as they spread costs across many clients. On-premise systems offer greater customization but have higher maintenance burdens.
Risks of Saving Now
Picking the right B2B e-commerce platform is crucial because choosing wrong means….
1) Doesn’t integrate well
2) Is not customizable
3) Has higher support costs
The process outlined above may seem time and research intensive, but is rewarding in the long run. The platform you choose should not only achieve you short-term and long-term goals but should also allow easy and quick implementation. Given the complexity associated with the process, partnering with a vendor that has done B2B e-commerce implementations can speed up the process.
At i95Dev, we have successfully worked with clients across industries. We work on Magento, the leading e-commerce platform, and have developed several advanced B2B modules to further enhance the platform. We are also the leaders in e-commerce, ERP, POS, CRM, and online marketplaces integration.