$1.13 Trillion.
According to a 2015 Forrester report, that’s how much US manufacturers, wholesalers and distributors are predicted to sell online (inclusive of EDI) by the year 2020 – less than four years from now.1 By the way, that figure represents more than twice the 2014 prediction of $304.91 billion in US retaileCommerce sales. Suffice to say, it’s a big deal.
What’s behind this unprecedented growth? B2B buyers, now accustomed to placing online retail orders, are shifting their business buying habits (and expectations) as well. 89% of B2B buyers perform everything from product research to price comparison to post-purchase support online.2 Without the limitations imposed by traditional B2B buying methods, buyers can (and do) place orders anytime, anywhere, and from any device. In fact, purchase rates on mobile were up 22% last year, over figures from 2013.3
image via think with Google
Overall, B2B companies have been slower to invest in their digital strategy due to expensive and complex requirements. Which isn’t all that surprising; a typical B2B seller has a solid customer-base who is comfortable ordering using traditional methods. That may be true, but it’s changing fast. Brand loyalty and long-term relationships are quickly becoming second to user experience and price competitiveness.
Nearly half of all B2B researchers are millennials
Contributing to this trend is that, contrary to common belief, nearly half of all B2B researchers are millennials (that’s an increase of 70% from 2012).4 These are buyers who have never known a time before the internet, and have literally grown up with access to the world at their fingertips. They’re also the generation most likely to prefer doing business online. Millennials want an experience that’s both integrated and seamless. Considering that kind of purchasing power, it’s crucial that B2B players shift their approach to a customer-centric omni-channel strategy, similar to what B2C companies have been doing for years.
B2B companies that are investing in their eCommerce strategies enjoy higher profit margins from their online sales. Additionally, enhancing the customer experience with suggested products, add-on items and targeted promotions, leads to higher average order values associated with online sales. Beyond the obvious benefit of increased ROI, B2B companies that offer self-service tools and remain “open” 24/7 via the web reduce their operational costs, processing more orders at a faster rate than ever before.
B2B eCommerce trends to watch for in 2017:
- Personalization: Buyers are increasingly showing preference for companies that demonstrate a strong understanding of customer needs. This may include things like product suggestions, remembering customer preferences, offering promotions relevant to the buyers’ industry or purchasing behaviour.
- Faster deployment time: 83% of buyers consider “deployment time/ease of use” to be one of the most important factors when researching B2B products and services. Which should really come as no surprise considering the bar set by Amazon’s same-day-delivery.5
- Buyers will spend more time researching and calculating ROI: With easier access to information online, buyers are conduct more detailed ROI analysis before making purchasing decisions. How will you stand out against your competition?
- Investments in technology are set to grow: As the market continues to evolve, savvy B2B companies are embracing eCommerce and investing in their digital strategy in order to stay competitive.
- Companies shifting procurement transactions to the Internet instead of through EDI: When integrated into your ERP, eCommerce totally automates the sales order capture process, reducing costs and allowing companies to sell more product, more effectively.
- Online catalogues will replace print catalogues: 69% of B2B companies expect to stop printing a catalogue, in favour of interactive online tools by the year 2018.6
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1 Source: “B2B e-commerce sales will top $1.13 trillion by 2020”, Internet Retailer, 4/2/2015 (based on a CAGR of 7.7% from 2015-2020) https://www.internetretailer.com/2015/04/02/new-report-predicts-1-trillion-market-us-b2b-e-commerce
2 3 4 Source: “The Changing Face of B2B Marketing”, Google, 3/2015
5 Source: “The 2016 B2B Buyer’s Survey Report”, DemandGenReport, 2016 http://www.demandgenreport.com/resources/research/2016-b2b-buyer-s-survey-report
6 Source: “Signs point up for B2B eCommerce”, Internet Retailer, 11/21/2013 https://www.internetretailer.com/2013/11/21/signs-point-b2b-e-commerce