A recent article by Theta Equity Partners highlights the remarkable success that investors have achieved in retail ecommerce over the past few years. However, it also sheds light on the current challenges retail ecommerce businesses face, including the normalization of post-pandemic purchase trends and the impact of privacy laws on the effectiveness of digital marketing strategies. Consequently, investors are turning their attention to other sectors that offer greater upside potential. One such sector is manufacturing and distribution, B2B companies.
Historically, B2B companies have been slow to embrace new technologies. Unlike retail businesses that have harnessed the power of ecommerce and modern technology stacks to boost revenue and streamline operational expenses, B2B companies have been slow or resistant to modernizing. Why? They view traditional, in-person sales channels and complex buying processes as obstacles.
According to Forrester, a staggering 60% of B2B companies in the United States still lack an ecommerce offering and rely on their sales teams to attract buyers and process manual orders. However, this landscape is changing. Forrester’s research projects that B2B transaction volumes on ecommerce platforms will nearly double between 2022 and 2027, soaring from $1.7 trillion to $3 trillion.
The surge in B2B ecommerce transaction volumes is not solely driven by B2B companies themselves, but rather by evolving buyer expectations. As digitally native millennials assume management roles and Gen Z enters the workforce, they demand efficient and self-serve online buying experiences from their suppliers. A survey conducted by Wunderman Thomson revealed that 85% of B2B buyers would switch suppliers if their digital experience failed to meet expectations. While this poses a threat to many B2B businesses, it presents a significant opportunity for investors.
By leveraging ecommerce solutions to enhance buyer satisfaction, investors can drive value and, in turn, fuel revenue growth, increase customer lifetime value, and improve business efficiency.
Expanding the Concept of B2B Ecommerce
To extract maximum value from an ecommerce site, B2B companies should view ecommerce as more than a mere shopping cart and checkout process. Rather, it should be regarded as a comprehensive “buyer portal” enabling buyers to manage all aspects of their interactions with the business. This includes order and shipment tracking, invoice payments, quote requests, reordering, and various other B2B processes. Regardless of where the original interaction occurred, buyers should be able to manage these processes online. For instance, an order placed over the phone with a salesperson should be visible online, just like a purchase made at a warehouse. All touchpoints with the buyer should be seamlessly managed online; these include:
- Interactions with the sales team
- Electronic Data Interchange (EDI)
- eProcurement
- In-store / in-warehouse
- Ecommerce or owned mobile applications
Centralizing and consolidating these touchpoints can drive value for B2B businesses in several ways:
Improving buyer loyalty and lifetime value (LTV): By centralizing orders, invoices, and quotes in a single portal, buyers can have a seamless experience managing their interactions with the B2B company This level of convenience and self-service leads to improved buyer satisfaction and loyalty. When buyers have easy access to their order history, payment information, and personalized pricing, they are more likely to continue doing business with the company, increasing their lifetime value.
Enhancing operational efficiency: A centralized ecommerce portal allows B2B companies to automate various processes, such as order processing, quote requests, and invoicing. By integrating their ecommerce platform with their backend systems, businesses can eliminate manual data entry, reduce errors, and improve operational efficiency. This not only saves time and resources but also enables businesses to handle higher transaction volumes without increasing overhead costs and enables the sales team, who are often responsible for these manual processes, to focus on attracting new buyers.
Expanding market reach: B2B ecommerce opens up opportunities for businesses to expand their market reach beyond traditional boundaries. With an online presence, businesses can attract customers from different geographic regions, target new industries, and reach buyers who prefer self-service options. This broader market reach can lead to increased sales and revenue growth for B2B companies.
Using data to cross-sell and upsell: By leveraging data analytics and customer insights across all channels, businesses can tailor product recommendations based on buyer preferences, past-purchase history, and browsing behavior. This personalized approach enhances the customer’s shopping experience and increases the likelihood of upselling and cross-selling other products and brands.
Conclusion
The rise of B2B ecommerce presents significant opportunities for investors and B2B companies alike. By leveraging the low-hanging fruit of ecommerce, businesses can drive revenue growth, improve operational efficiency, enhance buyer satisfaction, and gain a competitive edge in the market. By embracing a “buyer portal” approach, businesses can unlock the full potential of B2B ecommerce and capitalize on the benefits it offers.
As Forrester predicts, B2B ecommerce transactions are expected to double in the coming years nearly. Investors who recognize this trend and invest in B2B companies that embrace ecommerce can position themselves for significant returns. Likewise, B2B companies that proactively adopt ecommerce strategies and platforms stand to gain a competitive advantage, increased market share, and improved customer satisfaction. In short, the time is ripe for B2B businesses to leverage the power of ecommerce and reap the benefits.
Visit BigCommerce to learn more about B2B ecommerce.