To assess B2B ecommerce compelling events, let’s first consider the B2C situation of the retail market before the pandemic.
Before COVID, retail and services markets perceived going online as a “someday I’ll” event. In other words, it was perceived largely as a nice-to-have capability, but far from being a necessity to run their business. There were retail stores, and people went to them to shop for retail goods. Yes, Amazon was a growing concern, but still only eating part of their lunch. After all, why change a model that generated revenue for many years. If it works, don’t break it… right?
This scenario played out in the much-discussed world of omnichannel retail. It was a wildly popular topic for discussion, panel sessions at conferences, research, and blog posts. But similarly, omnichannel capabilities—and the order management system (OMS) it needed to function—were relegated to the “nice-to-have” category. In fact, Omni-2000 (research from our business partner OrderDynamics–now Tecsys) highlighted that only 34.8% of retailers worldwide actually had omnichannel in practice (BOPIS) in late 2018. In context, that’s one-third of retailers offering omnichannel practices at that time.
Crisis Strikes
Fast forward to the pandemic, and suddenly the world changes. Like many industries, it turned out that retail was not as stable as expected when a Black Swan event takes place. In the blink of an eye, we were all in cycling lockdowns, and the industry was decimated. Ecommerce and omnichannel capabilities became the norm. Those without these capabilities scrambled to implement systems to survive, while many others succumbed to bankruptcy.
Source: Statistica 2021
Today, B2C ecommerce (business to consumer) stands at near 20% of all worldwide retail sales (Statistica 2021). Aside from the notable almost 5% jump in ecommerce as a percent of all retail sales, in 2019-2020, Statistica predicts steady growth through to 22% by 2024. Without a doubt, it is a trend that has been steady and will continue in the industry.
B2B Ecommerce Compelling Event
Think now about where things stand with B2B industries and B2B customers. In business to business, we see various parallels to pre-pandemic B2C. We know that 73% of those involved in these purchases are millennials. If anything, successful B2B companies need to carefully consider that these procurers review products online, and are comfortable shopping online. For this audience, web purchases are a norm, and ecommerce platforms are well-understood shopping experiences.
B2B sales are at a tipping point between physical and digital adoption. Sales channels are starting to accelerate for B2B ecommerce websites. Excluding EDI (electronic data interchange) sales, B2B ecommerce site sales totaled over $6.64 Trillion in 2020 worldwide (GrandViewResearch, 2021). Like the story of B2C above, business-to-business sales also surged during the crisis. From 2021-2028, GrandViewResearch expects the compounded annual growth rate (CAGR) to continue at 18.7%.
Critical Incident
Is B2B ecommerce compelling unto itself? Will procurement teams start showing a preference for corporate purchases online, rather than physically from sales teams? Surprisingly, one statistic online suggested that 23% of B2B companies still accept fax orders. Ultimately, will it take another critical situation like the past few years to shake up the industry? Hopefully, we will not find out the hard way.
Smart B2B Firms
As is the case with retail, what makes B2B ecommerce compelling for companies is the high growth rate that will continue for the next few years. The smart thing to do in the B2B space is to digitally transform as one of the earlier adopters. Get your online sales channel stood up and operating. As procurement teams experience generational turnover, digital buying experiences become more important to the B2B buyer. Customer experience becomes a more prominent factor in B2B, pressing the critical nature of a stable, enterprise-grade, and robust platform like Salesforce B2B Commerce Cloud.
Compelling?
In business to business, we see various parallels to pre-pandemic B2C. Sales channels are starting to accelerate for B2B ecommerce websites. The smart thing to do is to digitally transform your B2B sales channels now. Being ahead of the curve means your teams will have the experience to grow your business while capitalizing on the ongoing explosive growth.
At the end of the day, is B2B ecommerce compelling unto itself or does it need a critical incident? Honestly, the business-savvy answer, without a doubt, is yes. If B2B ecommerce is growing at 18.7% annually, shouldn't that be compelling enough? Lock in your own organization's growth, by digitizing your business to business sales, now.
Interested in exploring your options for B2B ecommerce? If you don't already have a B2B ecommerce site, OSF Digital can help you get there in 4 weeks flat. Consider our Quick Start B2B Ecommerce solution. If your needs are more bespoke, call us for a short consultation. We are happy to help.
