B2B And B2C Ecommerce – It’s Different!!
1979 was the pivotal year for e-Commerce, when a salesperson from Honeywell, UK, in his quest for new options for increasing his revenue target, came up with the very idea of it. World’s first B2C e- Commerce store would be opened in 1984 by Gateshead SIS/Tesco and the first B2B e-Commerce store would be opened, quite surprisingly, in 1981 by Thomson Holidays. Since the inception of internet and the later World Wide Web, e-Commerce has been a case of continued and exponential growth story, disrupting almost all the industries. That which was a tiny $550 billion industry worldwide is driving a revenue of $3.5 Trillion today. What was merely a western world innovation, is being driven by the APAC region today, led by China.
Although B2B e-Commerce has made huge inroads size-wise, the acceptance of the same is not at the same level as B2C e-Commerce. If seen across industries, manufacturing is the slowest to adopt e- Commerce with only 40% Companies having adopted e-Commerce till date, according to a survey by B2becNews. Some of the main reasons are complex and Company-specific business processes which includes pricing, legacy procurement processes and existing business relations, Internal Push against digital transformation due to preference for in person sales, Organizational structure etc. B2C ecommerce, on the other hand, thrived because the buyers were millennials as well as due to the proximity of mobile commerce. There also remains a lot of skepticism about the value differentiators that B2B e-Commerce can bring, due to non-clarity of its vast possible offerings. Let’s take a look at a few key defining factors behind the B2B e-Commerce ecosystem.
Decision Making Process: In B2C e-Commerce, the buying decision is taken by individuals on the spur of the moment, which can be called as impulse buying. However, in a B2B scenario, a well-structured team at various decision-making levels take a planned buying decision. Thus, B2B e-Commerce needs to enable a similar structure for the buying Company as well as the selling Company. A clearly defined org. structure in the e-Commerce platform itself will simplify, complement, and replicate the traditional practices.
Negotiation: In the B2B buying process, negotiation plays a key role. Negotiation happens, chiefly, for price discounts, but not limited to it. It can also happen for specific changes required in product, special requests for delivery, etc. A simplified online Quote/Request for Quote process can make life simpler for the people on either side of the spectrum.
Recurring Orders: Some institutions consume/buy specific amount items in a regular frequency due to their usage pattern. Hotels, CPG retailers, etc. fall in this category. For them, repeat ordering again and again can become a tedious job. B2B e-Commerce can automate this task and save not only a lot of time and effort but also the horror of a missed regulation shipment on time.
Personalization: Although personalization is becoming one of the most important concepts in B2C, it plays a major role in B2B e-Commerce. Promotional offers, discounts and even an entire product offering can change from buyer to buyer and region to region. B2B buyers would be more focused on the things that they want to buy, rather than exploring new items which are not in their areas of interest. A B2B e-Commerce platform must offer this capability to their customers.
Connected System: A B2C e-Commerce Company can sustain its business without necessarily connecting their e-Commerce platform with their ERP, CRM or other systems that they use. A SaaS based e-Commerce platform can enable your online store by just uploading your catalogue and stock information. However, in a B2B e-Commerce scenario, it’s imperative to connect the e-Commerce platform with your warehouse management system, order fulfillment system or a full-fledged ERP. The documentation process must be legally compliant and adhere to contract terms.
Contract terms: In B2C businesses, the exchange ends simultaneously, with one side providing the item sought for and the other side paying for it. However, in the B2B process, the concept of credit lines and contract terms dictates the payment process where a customer can continue purchasing without paying for the order every time as long as it has the required credit line approved by the seller. This process, if replicated in e-Commerce, can make keeping legal and financial information ready for users without paperwork.
Involvement of Sales Team: Field sales teams are the most vital part of any business organization today. B2B e-Commerce should not be aimed at replacing the sales team, rather it should enable the sales team to be more efficient with options to place orders on behalf of the customer, look at his purchase history and receive appropriate information that will help them to sell more and so on. Further integration with Sales force automation tools can help them to make intelligent decisions to manage customers.
Apart from all these, functionalities such as, range purchasing, assisted shopping, chatbots, shopping analysis, etc. can help both buyers and sellers to save time and make educated buying decisions which are not required in B2C e-Commerce. As the B2B industry is being reshaped with new growing trends where millennials will be the key people in buying process, the acceptance of e-Commerce will increase manifold. That’s why analyst companies like Frost and Sullivan are so confident when they say B2B e- Commerce will grow from $3.4 trillion today to $6.5 trillion by 2020.
Summary: e-Commerce since its inception has diversified itself into B2B and B2C platforms, which are, from a practical use and requirement perspective, a lot different. B2B e-Commerce platforms delve more into simplifying and digitizing traditional practices like decision making, negotiation, recurring orders, etc., and providing a connected, personalized platform that helps all the stakeholders including the Sales team. B2C e-Commerce is traversing the path of standardization of Retail practices into a digital platform that can be made available to the customers at the speed of lightning. To gain competitive advantage and stay relevant in the digital economy, it’s about time that B2B e-Commerce adoption is core to your digital transformation journey. What seemed luxury in the past, is definitely a necessity today!