In our last post – B2B E-Commerce: The B2C Influence – we took a close look at how the pressing need for B2B professionals to create a B2C Amazon-like e-commerce experience is bearing down very quickly on the B2B market. We discovered that, despite the fact that the B2B market is twice the size of B2C and growing rapidly – on pace to reach $1.13 trillion in the U.S. alone by 2020 – B2B companies are still lagging far behind their B2C counterparts in terms of the e-commerce experience that they are able to offer.
In this post, we are going to be taking a look at exactly why e-commerce suite adoption is lagging in the B2B marketplace, and what online B2B stores need to do to bring themselves up to speed so they can begin to meet the expectations that the market already has.
The Complications Of Adoption
Big boats are difficult to turn around, but changes in customer expectations and demands mean that B2B customers are now expecting world-class B2C features and functionality on the B2B e-commerce sites that they purchase from. If they don’t accomplish this goal, then it is likely that they will begin to lose customers to those sites that can meet the prevailing demands. But, as with most things, implementing new technology is a lot more difficult than identifying the need for it. B2B suppliers already have the network of buyers that they do business with – and so it’s not so much a case of needing a bigger boat in order hold on to those customers, but a bigger dockyard in which the big boat is able to turn around.
Such a thing is available for them in the form of B2B e-commerce suites – the eight largest vendors of which have recently been evaluated against a set of 88 criteria in the recently published report by Forrester, The Forrester Wave: B2B Commerce Suites, Q2 2015.
As well as outlining the heavy influence that B2C e-commerce platforms are having on their B2B counterparts (see B2B E-Commerce: The B2C Influence), the report also identifies the complications that B2B companies are finding when seeking to implement the necessary technology and commerce suites that will enable the change.
From the report:
“B2B companies still find themselves plagued by both internal and external channel conflict, which in many cases is impeding their forward progress with digital. Internally, many B2B companies lack explicit digital leadership and C-suite buy-in to support a critical rethink of the role of B2B salesman in a digital-first world. Externally, B2B companies find their positions in the market changing either slightly or dramatically depending on how aggressively their ecosystem partners pursue digital.”
In addition, the B2B marketplace is getting ever more crowded as time presses forward. This has meant the competitive landscape in B2B has changed. Consider the following: many traditional ‘offline’ companies are now moving all or part of their business activities (i.e. sales strategies) online; there are also many manufacturers that are essentially becoming de facto distributors, due to the fact that they are now selling their wares online directly to customers; certain companies are expanding their catalogs for online sales and are popping up in niche markets that they have never populated before.
Some examples of the last point are given in the Forrester Wave report:
“Staples recently entered the power tools, medical devices, and garden tools categories online — even though it does not sell those items in its stores. In addition, online electronics retailer site Newegg announced that it was expanding its online assortment to include a brand new category of industrial tools. Further, web-only site SafetyGlassesUSA.com has recently become a major player in the safety equipment space.”
With so many new online B2B vendors, the complexity of pricing and assortments in the B2B space has increased dramatically, and for many – especially those that have yet to adopt a fully-functioning commerce suite as supplied by the likes of the eight vendors in the Forrester Wave report – the marketplace is proving to become an increasingly challenging space in which to continue to do business.
Forrester predicts that combined spend on commerce and order management platform technology in the U.S. will grow at an annual compound growth rate of 10% over the next four years, from $1.4 billion in 2014 to $2.1 billion by 2019. Leading this growth will be manufacturing and wholesale trade firms Forrester estimates that by the end of the decade, investment in commerce technology by manufacturing and wholesale firms in support of B2B selling channels will exceed that of B2C retailers.
With manufacturing and wholesale accounting for 30% of U.S. commerce tech spend by 2019, B2B commerce suite vendors will need to ensure that their products are evolving to meet the changing needs of the market. In our next blog post, we’ll be summarizing the key findings from the Forrester Wave report as we consider exactly how the eight vendors evaluated – CloudCraze, eBay Enterprise (Magento), hybris (an SAP company), IBM, Insite Software, Intershop, NetSuite, and Oracle – stack up against one another.