What drives your B2B eCommerce?
The easy answer is ‘Amazon-like experience’. The analyst’s answer is ‘consumerization of tech’.
There are some elements of truths in these answers but the motivations to embrace eCommerce for a retailer or CPG brand is quite different from a company that makes industrial valves.
At Ecommerce MGMT, we see a steadily increasing interest in sizing up the B2B eCommerce market. Even before the pandemic, eCommerce in the B2B world was growing faster than B2C. The pandemic would have taken all the attention to B2C but B2B has irreversible reasons to embrace eCommerce that are quite different from B2C.
It is not about post-purchase experience.
In B2C, even if I buy toothpaste it is a want (as against a need). There is a new brand and I want to know if it will shine my teeth better. There is an unboxing experience and there is an expectation that I get it tonight. B2B is none of that. There is a business cycle that determines the procurement cycle. Often the vendors are known. Sourcing is a high-stakes activity in some industries like food where there is a ton of innovation. I do not think we are inventing new materials for the steel industry the way we are making new things go into a burger
It is not about same day delivery.
It is important that a part must arrive on time. But it is not nearly the same as getting everything the same day. There is certainty in logistics. In B2C where you set your network of distribution centers determine the delivery experience. In B2B there is not such a thing called delivery experience. There is only delivery certainty and SLAs around it.
B2B commerce initiatives usually are a net positive.
The expectation of value is low because of how archaic some of the current channels are. So, when digital commerce is implemented, the ROI is generally high (of course, it depends on how complex the current IT landscape is). But it needs to be sold right.
The truth of B2C is that customers want more selection, convenience, and good price. Increasingly cause, values, story, fun, etc. come into the mix. Let us call them experiences. But in B2B the anchoring truth is different. No one wakes with feverish anticipation before they open their app to order valves. Nobody wants to fill 27 forms and repeat the same details over and over. No one wants to run through a catalog comparison. No one likes to wait for approvals. No one likes to send ‘gentle reminders’ or quint their eyes when their EDI system throws errors. Yet, that is what B2B buying, and selling is.
Better workflows and seamless processes are the truths that anchor any B2B investment. The meta-truth is cost. How can I improve the revenue per employee or at least reduce the cost per employee is an immutable question in B2B?
Here is where I think the ‘systems that build systems’ approach to B2B eCommerce has a lot of merits. It is my pet theory. So please indulge me like you always do.
When B2B companies buy eCommerce systems, they tend to optimize their expectations around what they know from the B2C world. Promotions, Pricing, Merchandising, User experience, Mobile experience, etc. come into the RFPs. None of those matters as much as the systems before the systems.
How configurable is the rules engine? Is there a baked-in ‘Robotics process automation’ feature that makes the inter-organization compliance song-and-dance tolerable? Can sales orders be automated, and approvals be only for exceptions? How can we control the implementation beast and the fat bills from implementation projects that weren’t originally accounted for?
These are the questions that platform vendors have answers for. But rarely they are asked.
The systems that make the current B2B sales archaic are not going to become better because there is a credit card checkout or a pretty catalog with a search interface. Yet that is what you get what you retrofit a B2C platform for a B2B use-case. Systemic changes should be driven through B2B eCommerce platforms before you can truly leverage the power of B2B eCommerce. These systemic changes are often industry-specific, unlike B2C where 80% of selling to consumers is standard.
For platform vendors, the path to market leadership starts with workflow/process re-engineering (SaaS tools that make B2B eCommerce efficient) before they can start leveraging the network effects that their SaaS tools will bring (eventually allowing them to launch marketplace of suppliers). In other words, they need to build software systems that make B2B selling efficient before they build market systems that expand procurement options for buyers in a specific vertical.
– Ashwin Ramasamy