B2B e-Commerce Trends: What’s Coming in 2018
What B2B e-commerce trends are emerging for 2018? In 2015, Forrester famously predicted that US B2B eCommerce sales would hit $1.1 trillion by 2020. From 2016 to 2017, the number of Amazon Business sellers grew 183%. Manufacturers are moving online and defining their role in distribution with private, manufacturer-branded e-commerce stores. B2B e-commerce is more attainable than ever for midmarket firms. Where’s it all headed in 2018?
In this article, we’ll offer 6 predictions on the emergent state of B2B e-commerce in 2018. But first, let’s get a quick industry benchmark. How are top B2B eCommerce companies performing?
Industry Benchmarks: Public B2B marketplaces
As manufacturers continue to evaluate their distribution options, it’s worth benchmarking the state of marketplaces like Amazon Business to uncover B2B e-commerce trends. Where is the industry headed? To what degree is B2B revenue moving online?
Amazon’s B2B eCommerce Growth:
Amazon Business is a force to watch in B2B eCommerce. Though Amazon did not release sales data for this channel in 2016, 2015 (its first year) saw over $1 billion in sales, and the number of sellers and customers on the platform is growing.
- Amazon Business reported $1 billion in sales in its first year (2015).
- Total number of sellers on the platform went up from 30,000 to 85,000 from 2016 to 2017.
- Amazon Business had 1 million customers in July 2017.
Alibaba’s B2B eCommerce growth:
For the fiscal year ending 3/31/17, Alibaba’s B2B eCommerce revenue was up 11% year over year to US $872 million.
- Alibaba’s international B2B ecommerce revenue in the quarter ending 12/31/16 was $224 million, up 9% year over year.
- Alibaba’s international B2B ecommerce revenue for the quarter ending 3/31/17 was $219 million.
- Alibaba’s international B2B ecommerce revenue for the fiscal year ending 3/31/17 was $872 million US, 11% increase over their 2016 fiscal year, according an official Alibaba financial report. That report explains: “The increase was due primarily to growth in revenue generated by import/export related services and to a lesser extent to an increase in value added service revenue from China wholesale suppliers.”
Prediction 1: Manufacturers Must Sort Out Their Role in the Distribution Channel
Here’s the #1 B2B eCommerce Trend for 2018: manufacturers will realize that they must define their role in distribution. They must navigate the difficult waters of distributor/dealer relationships, while still getting closer to the consumer to reclaim margins and market share.
This is a complex question, and best practices will differ from industry to industry; but the growing tension in the market is unavoidable.
At a high level of generalization, manufacturers will find themselves confronted with a choice: whether they want to continue to develop unique products (and if so, how best to sell them, whether through distributors or private manufacturer-branded eCommerce or both); or whether they want to commoditize themselves and include a highly competitive, public B2B market like Amazon in their distribution strategy.
Prediction 2: Amazon Spillover Pressure on Non-Commoditized B2B Sellers
Amazon is a powerful driver of B2B e-commerce trends. As Amazon, Alibaba, and Grainger take larger market share in commoditized B2B markets, more procurement managers and professional buyers will find themselves exposed to eCommerce in the procurement process.
We fully expect a spillover effect, as buyers transfer rising expectations to specialty and non-commoditized products. In specialized B2B markets such as healthcare, agricultural supply, and industrial coatings, manufacturers and distributors with proprietary eCommerce sites will see gains over those who still rely on phone/fax/email for ordering. These forward-thinking companies will empower their busy buyers to shop and purchase through 24×7 self-service.
We call that empowerment “becoming easier to do business with.” With the stunning growth of major players in B2B, this will be a major B2B e-commerce trend next year and a big factor driving 2018 e-commerce projects.
Prediction 3: Increased Demand for CPQ (Configure-price-quote) Solutions
As the B2B world increasingly uses marketplaces for commoditized products, we expect the spillover pressure to continue in another way: buyers will appreciate (and begin to expect) configurable product support in B2B eCommerce. Why? Because it mirrors the full self-service experience of Amazon, in which a buyer can choose any and every product attribute on the eCommerce store.
CPQ (configure-price-quote) isn’t exactly a new development in eCommerce, but the idea is gaining exposure and momentum. Among B2B e-commerce trends in 2018, it will be a major player. In this Forbes article, Louis Columbus shares a fascinating stat: “Gartner predicts that by 2018, 40% of B2B digital commerce sites will use price optimization algorithms and configure, price, quote (CPQ) tools to calculate and deliver product pricing dynamically.”
He goes on to discuss “the need for greater price optimization and Configure-Price-Quote (CPQ) flexibility across every selling channel. These factors are primarily the reason traditional B2C vendors can’t make the transition to selling B2B. SAP Hybris is a case in point, which is largely B2C focused.”
In other words, CPQ is coming to B2B eCommerce, and Hybris leaves something to be desired in this area. In fact, for companies that are investigating Hybris competitors and need a CPQ solution, there’s no better time to enter the eCommerce market. Corevist has partnered with Configit to bring highly configurable products to SAP eCommerce.
Prediction 4: Increased Demand for Integrated OMS (Order Management Systems)
As the Amazon experience continues to drive the evolution of B2B eCommerce trends, we expect order management to take a front seat in 2018. As more and more B2B buyers use Amazon and similar marketplaces, they’ll become accustomed to having all their order details available in one place. That creates a new bar for B2B manufacturers and distributors who launch their own eCommerce stores: their customers will expect an OMS (order management system) integrated with the eCommerce store.
This is especially important for companies that integrate their eCommerce stores to SAP ERP. In the Forbes article which we quoted earlier, Louis Columbus had this to say about OMS:
“Often e-commerce systems are developed completely independent of existing, and often legacy order management systems. The disconnect between these two systems leads to order errors and gets in the way of delivering an excellent customer experience. Born-in-the-cloud B2B e-commerce platforms have order management designed in from the very beginning, making it possible to synchronize order processing across all channels.”
This kind of integration is critical to the integrity of business data. We’re proud to say that with the Corevist solution, you get only 100% error-free orders posted to SAP as your system of record; and with Corevist’s eTrack module installed, you and your customers can track orders using real-time SAP data.
Prediction 5: Increased Demand for Personalized Catalogs
Amazon’s personalization algorithm is second-to-none. In the B2C sector, we’re all used to seeing the kinds of products which it comes up with in our personal recommendations. But B2B e-commerce trends are increasingly driven by this same expectation. As B2B continues to takes a page out of Amazon’s B2C playbook, B2B buyers will come to expect that kind of personalization in B2B eCommerce. What will that look like?
A personalized catalog in B2B uses customer data that already lives in your ERP system and connects the dots between that data and existing products in your catalog. For example, one of your customers may each have a large piece of major machinery that has a long life expectancy but a high need for replacement parts. You have all of this information in SAP—what kind of machine it is as well as the parts that are associated with it. An SAP-integrated eCommerce store allows you to show your customer a personalized catalog that displays all the replacement parts for that machine. It makes routine maintenance and reordering a snap.
Prediction 6: Reduced Sales for Companies That Don’t Embrace eCommerce
As B2B e-commerce trends show a digital transformation among forward-thinking manufacturers and distributors, we expect to see a saddening trend increase: those companies without eCommerce store will get left behind. Today’s buyer simply doesn’t have time to pick up the phone or assemble a fax order. He or she wants to browse an easy-to-use catalog with great search functionality and place orders with a few clicks.
The good news is that the maturation of the B2B eCommerce market brings better functionality with a lower price. B2B manufacturers don’t need to balk at the prospect of eCommerce. Companies like Corevist make a beautiful, functional B2B web shop available to small and midmarket firms. Even better—we integrate the eCommerce store to SAP via web services. That means real SAP data in the eCommerce store, in real time.
Moving Forward: Case Study
Want to learn more about how the evolution of eCommerce affects real businesses? Download the case study below. You’ll learn how Bell and Howell, maker of replacement parts for sorting machines, revived a dying spare parts business by launching a best-of-breed eCommerce store. The new web shop increased the company’s revenue by $200,000 in the first 60 days.