Some thoughts about B2B eCommerce.
B2B eCommerce has been part of my life since 1999 when I worked for the John Harland Company. At that time, I was on a team creating and deploying an internet site for bank employees to order checks for their customers. In the last fifteen years I have worked with both B2B and B2C sites and I can say that B2B sites are different. Business approach B2B differently. B2B development efforts focus on different aspects of eCommerce.
Much of B2B eCommerce focus is on functionality and features. The development teams often focus on the business workflows within the customer’s business as a way to add value. As a result, there is less focus on customer experience created by UI designs than a B2C site. There is less focus on metrics like conversion and bounce rates. When I product managed a B2B site I liked to ask, “how can we create a flow that reduces speed bumps and just enables the customer to complete the transaction they signed-on to complete?” In other words, let’s not trip the customer and just let them create a transaction. B2C sites like to create diversions in hopes that customers will add more items to the cart before completing check-out.
Andy Hoar of Forrester recently blogged that US B2B eCommerce is forecasted to reach $1.1 trillion dollars by 2020. This is not surprising, because technology continues advance to put capabilities in the hands of those that purchase for businesses.
Hoar cites a couple of contributing reasons:
- Today 70% of B2B purchases are researched online but only 30% are purchased online. Forrester predicts that gap will shrink.
- The economics of electronic order fulfillment are better than manual orders. Businesses know that electronic orders reduce costs in order entry labor, phone support, and supplies. Not to mention electronic orders typically create faster fulfillment times for the customer. When I worked for Harland we called this idea “Channel Shift”. There was a metric each year to incrementally reduce manual orders by increasing electronic orders. We even knew the dollar amount of cost take-out associated with shifting 1% of orders to our eCommerce channels.
But wait. Other factors are at play that influence the number of B2B eCommerce orders.
As I think through my experience and challenges my teams have encountered with “channel shift” a couple of things jump out:
1. Custom orders – eCommerce sites are easier when the product set for a customer is SKU driven from a catalog. The workflow changes when customers are allowed to customize a product. As the number of customizable features grows so does the level of complexity.
But more than the technology challenge with custom products is the education and knowledge challenge with the product set. Buyers on B2B eCommerce sites are not necessarily experts on the products they are purchasing. They rely on the research and the company representatives for this expertise.
2. Relationships – Much of the B2B commerce marketplace is built on relationships. A successful salesperson will add value to a relationship by bringing product expertise to the discussion with the customer. The successful salesperson will show the customer how the product can be used within the customer’s business to drive value.
Believe me, I want to enable and influence channel shift. But this is more than a technology puzzle. There are businesses processes, product attributes, and people relationships that are part of the equation. I haven’t found a set magic formula or one-size-fits all approach. What is clear is that businesses and customers are looking for ways to use technology to make their processes more efficient. With both sides looking for a solution, success is there for the taking.
Onward and upward!