Key Trends in B2B E-commerce
As of this writing, Forrester has predicted the B2B ecommerce market will break the $1 trillion threshold by the end of 2018, a year earlier than Forrester originally predicted. Countless B2B ecommerce trends are driving that growth. What do these trends mean for B2B manufacturers? What can you glean from these trends to help you pick the right B2B e-commerce platform?
This is a critical question for manufacturers in all markets. In this article, we’ll break down 16 major B2B ecommerce trends into 4 top-level categories (click to jump there):
I. Trends in B2B Ecommerce Strategy
B2B ecommerce is dead in the water without strategy. It’s not enough to do ecommerce just because that’s where the world is headed. Manufacturers must do their homework, interrogate sales pitches, and insist on smart rollout plans.
Here are the top trends we’ll see in B2B ecommerce strategy in 2019.
1. Manufacturers will experience increasing pressure to define their overall ecommerce strategy.
This trend will affect all manufacturers, regardless of vertical. It’s no longer good enough for manufacturers to rely on phone/fax/email ordering. As competition moves to self-service online ordering, manufacturers without ecommerce will feel increasing pressure through decreasing sales. The degree of pressure will differ depending on the market, but as a general rule, the more commoditized the manufacturer’s products, the more competitive pressure the company will experience to sell online.
To sell online, manufacturers must define their strategy with a realistic survey of where their business is now and where they want to end up.
To define their ecommerce strategy, manufacturers must pose (and answer) several key questions:
- What market segments are we trying to reach with ecommerce?
- Are we going after new business, transitioning existing business online, or both?
2. Manufacturers must understand rich content and how it aligns with their business (or doesn’t).
Rich content (i.e. product images, descriptions, videos, testimonials, etc.) is new ground for manufacturers. Traditionally, distributors have taken care of product presentation to the end user. But as market pressures drive manufacturers online, they must begin to present product content in the same way that distributors do. (See B2B Ecommerce Trend 4 below for more on manufacturers thinking like distributors.)
In 2019, B2B ecommerce vendors will continue to push the importance of rich content. Manufacturers must interrogate this sales pitch using the customer segments defined in their ecommerce strategy. The questions should look something like this:
- We’re transitioning longtime business online. Do those users need rich content, or do they simply order by SKU or Excel spreadsheet?
- We’re going after new business in the same market where we have established business. Do those users need rich content?
- We’re going after new business in a new market (perhaps expanding from B2B into B2C). Do those users need rich content?
Having answered these questions, manufacturers may need to prioritize user segments. This will have a direct impact on choosing the best platform for a permanent, scalable ecommerce rollout (see B2B Ecommerce Trend 15 below).
3. Manufacturers must define their strategic relationship to Amazon.
We’ve covered this topic in depth here. In 2019, we fully expect the trend of Amazon pressure on manufacturers to increase. That pressure will look different for every market, but it will require manufacturers to act in defining their strategic relationship to Amazon.
Key questions manufacturers must answer for every major product line (this is just the beginning):
- Who has the most market power? Amazon as a distributor, or us as a manufacturer?
- Do we need full control of branding?
- For more commoditized products, are our major competitors’ products available on Amazon?
- If we sell on Amazon, how will those orders get posted to SAP?
The question is most likely not, “Should we sell on Amazon or launch our own branded store,” but rather, “What should we sell where, and how can we optimize each channel?”
4. Manufacturers must adopt a distributor mindset for value-add ecommerce.
This crucial trend in B2B ecommerce will only increase in 2019. As manufacturers enter the B2B ecommerce space, they’ll find competition from distributors—both their own, and those with whom they have no relationship. The relationship with their own distributors is murky, and manufacturers must tread carefully (see this post for some advice).
However, the competitive problem is unavoidable. It’s easiest to state it as a question which your customers will ask whether they realize it or not:
- Why should I spend time on this manufacturer’s ecommerce site, rather than a site that offers me every product I need to complete the job at hand?
This question illustrates the scope of the problem, too. Manufacturers don’t need to carry everything under the sun, like a distributor would; they just need to consider carrying add-on products from 3rd parties that supplement their major products.
When manufacturers grow their catalog to include consumables, spare parts, and other auxiliary products which the buyer may buy elsewhere, value increases for everyone. The manufacturer gets a greater share of revenue being spent on the project, and the customer saves time because they can buy everything they need for the project in one place. It’s a win-win.
5. Manufacturers must build a plan that gives them a quick ecommerce win now, plus permanence and scalability.
There is certainly a place for the standalone proof-of-concept in B2B ecommerce. However, we expect the proof-of-concept trend to diminish as more and more manufacturers get a handle on what’s possible in ecommerce. When more stakeholders understand the value which ecommerce brings, there’s less to prove, and manufacturers are free to pursue a permanent, scalable solution right out of the gate.
We’ll cover this in more detail in B2B Ecommerce Trend 15—Scalable Platforms.
II. Trends in Organizational Transformation Driven by B2B Ecommerce
You need a lot more than a successful ecommerce rollout for B2B ecommerce to succeed. In fact, you need to achieve nothing less than organizational transformation. Wherever legacy processes and legacy thinking will hamper the shift to ecommerce, you need to engage careful, intelligent management strategies to help your internal stakeholders see the value of ecommerce and become evangelists for it.
Here are the top trends in organizational transformation which B2B ecommerce will drive in 2019.
6. Smart manufacturers will approach ecommerce as a form of organizational transformation.
In a sense, it’s unfortunate that “B2B ecommerce” has the name it does. Why? Because the shift to ecommerce entails far more than launching a platform. For ecommerce to succeed, everything about your interaction with your customers must change. Here’s a high-level list of customer touchpoints and the internal process which the switch to ecommerce will require. If that process doesn’t exist today, or if it exists in a form that’s not conducive to ecommerce, it will require adjustment—along with cultural transformation to ensure the internal stakeholders who are responsible are on board.
- Product browsing—If the ecommerce solution will include rich content, someone has to gather and maintain that rich content across product lifecycles.
- Order placement method—If your CSRs (customer service reps) and Sales are used to directing customers to phone/fax/email, you need to get them on board with ecommerce from the start. See this post for more.
- Payment method—If you’re switching to e-payments along with ecommerce, make sure your accounting department understands everything that will change under the new payment process.
This list is just the beginning. To prepare for B2B ecommerce, you need to make a list of all internal processes which ecommerce will change, a list of the relevant stakeholders, and a plan to get each on board with ecommerce.
7. A new type of CIO/IT Director will increasingly drive B2B ecommerce.
Tim Crawford has a brilliant take on the evolution of the CIO (see his blog for more). In essence, he claims that 2019 will be the year of the transformational CIO.
This is a fantastic perspective, and we expect it to become a full-blown B2B ecommerce trend this year. CIOs and IT Directors will move away from viewing ecommerce strictly as an IT project. Rather, they’ll see it as a transformational project which creates a new kind of business. And while that’s daunting, it’s absolutely necessary (just see any of the other trends in this list).
8. Within conglomerates, CIOs will increasingly look at other divisions to see what’s working and what isn’t in B2B ecommerce.
At Corevist, we see this all the time as a leader from one division of a client approaches us about ecommerce. Even though divisions may be heavily siloed in large organizations, visibility into what works in one division can help IT leaders choose the best solution for their division. In 2019, look for more and more independent divisions to roll out the same ecommerce solution that’s been successful elsewhere within the corporation.
III. Trends in B2B Ecommerce Customer Experience
The transformation of customer experience will become a primary driver for B2B ecommerce in 2019. It’s no longer enough for organizations to launch ecommerce for increased operational efficiency (though the benefits in that area are still lucrative). Rather, organizations must put customer experience front and center in transitioning to B2B ecommerce.
Here are the top B2B ecommerce trends for customer experience in 2019.
9. Manufacturers must incorporate the voice of the customer into digital transformation iterations.
This will be a big step for manufacturers in 2019 as they launch B2B ecommerce. Traditionally, manufacturers haven’t had to think about the buying experience which they offer. Product specialization was a strong enough market force to drive B2B customers to manufacturers.
That has changed, and it will continue to evolve in 2019. Product will no longer be enough for manufacturers, especially in more commoditized markets. Customer experience will rise to prominence.
Since manufacturers haven’t previously considered customer experience in depth, they’ll need to adopt a new approach in 2019: incorporating the voice of the customer.
At a high level, that means starting with customer feedback before you even build a plan for digital transformation. But it also means adjusting as you go with regular check-in points with customers. At Corevist, we achieve this through a series of targeted focus groups with your internal users and your customers. In each meeting, we show a live, working demo of the software and ask a provocative question: “Why can’t we put this into production today?”
You’d be amazed at how that question gets the conversation going. In our experience, you’ll uncover all sorts of things you hadn’t thought of—and your customers will often be the biggest contributors to the discussion.
For more, see this post on our blog: What To Expect In Your First Meeting With Corevist.
10. Market pressures will drive manufacturers to prioritize a 100% self-service customer journey.
With the increasing penetration of Amazon into the lives of B2B buyers, smart manufacturers will respond with 100% self-service ordering. While that may seem like a tall order for companies that haven’t focused on customer experience in the past, it’s not as hard as it sounds. The key is to pick the right platform (see B2B Ecommerce Trend 15 below).
11. Manufacturers will increasingly transition to e-payments to simplify the customer journey.
100% self-service is impossible if your payments process still depends on paper checks. To put the buying journey 100% in the hands of customers, forward-thinking manufacturers will increasingly launch e-payment options in 2019.
That said, not every manufacturer will be able to get on board with this B2B trend in 2019. As we reported in this post, paper checks still account for 59% of all payments in B2B. Customers will continue to struggle with the antiquated payment methods which many manufacturers still use. For manufacturers who do have a user-friendly e-payment process, this environment will offer them a unique competitive advantage, particularly in highly-commoditized markets where sellers must fight hard for customer loyalty.
IV. Trends in B2B Ecommerce Platform Selection
We’ve talked about strategy, organizational transformation, and customer experience. But at the end of the day, B2B ecommerce depends on a platform. Here are the trends to look for in 2019 when it comes to B2B e-commerce solutions–and which ones manufacturers are choosing.
12. Manufacturers will grapple with the “suite vs. best-of-breed” question like never before.
With SAP’s 2018 unveiling of the C/4HANA suite, the pressure has mounted on manufacturers to buy one be-all, end-all suite to manage every aspect of the company digitally. And while the suite package may meet the needs of the top 1% of global players, it’s an open question which type of solution is best for “the rest of us.”
To complicate matters further, there’s a dirty little secret that suite vendors won’t tell you: suites are built through the acquisition of best-of-breed platforms. More on that here: Suite Vs. Best of Breed in B2B Ecommerce.
To help manufacturers compare the top B2B ecommerce platforms and choose the best fit, we’ve put together a platform comparison chart that’s currently ranked #1 on Google. Get your FREE chart below.
13. Manufacturers will spend more on ecommerce.
While this study from B2B Ecommerce World covers consumer brand manufacturers in particular, it’s safe to say that similar market pressures are affecting all manufacturers launching ecommerce. As the study reports, 35% of manufacturers surveyed plan to increase their ecommerce spending by more than 10%.
Also take note: that study reveals that 55% of manufacturers believe their biggest ecommerce challenge is dynamic pricing.
Which leads us to real-time ERP integration.
14. Manufacturers will prioritize B2B ecommerce platforms that integrate to their ERP in real time.
Dynamic pricing, i.e. a pricing engine that can display correct contract pricing by user and scaled pricing by product and quantity, is a top priority for manufacturers launching B2B ecommerce. This trend is so important, manufacturers will use real-time integration as a make-or-break rubric when evaluating solutions.
Why? Because rebuilding complex pricing rules in ecommerce and middleware is a waste of time and money for manufacturers who’ve already invested in that complexity in SAP.
Furthermore, pricing isn’t the only data which manufacturers need to load in B2B ecommerce in real time. Inventory levels, ATP (available to promise), EDD (estimated delivery date), SKU permissions, SKU substitution, and much more—all this constitutes a living, breathing data entity in the ERP system. Since it’s constantly evolving, and since the ERP is the system of record, manufacturers will find they must insist on a real-time integration to the ERP or risk introducing dangerous friction into the customer experience.
Think about it: If a customer logs in and can’t get contract pricing, can’t get inventory levels, and can’t figure out what SKU to substitute for one that’s discontinued, that transaction just got a lot harder. The ecommerce platform isn’t self-service at all, because now the buyer has to call customer service to place the order. If that happens at scale, the manufacturer has failed to provide self-service ordering (see B2B Ecommerce Trend 10 above).
15. Manufacturers will increasingly prioritize scalable ecommerce platforms that allow them to add rich content when they’re ready.
Because B2B ecommerce serves large, complex organizations, it’s often an ongoing project with multiple, iterative rollouts. That’s why smart manufacturers build smart rollout plans.
What does this mean?
In a nutshell, a smart rollout plan seeks to produce ROI immediately before you go after the big fish. It allows you to launch a B2B ordering portal now, without a catalog, and transition your existing power users there—professional buyers who order by SKU and/or Excel spreadsheet. A portal like this doesn’t distract them with branding or rich content. Because it’s aligned to their needs, it allows you to move their revenue online fast. That means fast ROI—which allows you to transition to the next phase, adding a catalog to reach users who need help finding the right product.
We explain it in detail in this post: Got Content Anxiety? Overcome It With A Rollout Plan.
16. Manufacturers will replatform off disconnected/sunsetted systems onto future-proofed, scalable, ERP-integrated systems.
When you put all the other B2B ecommerce trends together, you get this one. In 2019, manufacturers will prioritize platforms that offer:
- Full real-time ERP integration OOTB for contract pricing, scaled pricing, inventory availability, credit standing, order history, and much more.
- Full scalability for added storefronts, product lines, and acquired businesses (without having to duplicate the ERP integration).
- The ability to add a catalog with rich content and promotions when the manufacturer is ready.
- The ability to get up and running fast to join in the $1 trillion + B2B ecommerce market.
As manufacturers prioritize this kind of new, intelligent B2B ecommerce platform, we’ll see an increasing wave of replatforming. Manufacturers will shut down their non-ERP-integrated systems and solutions which have been sunsetted by vendors. In place of these, manufacturers will launch powerful B2B ecommerce platforms that are flexible enough to meet that needs.
That’s good news for everyone, from internal stakeholders to B2B buyers.
Moving forward: FREE case study
Wondering how B2B ecommerce trends play out in real life? Download this case study on Mannington Mills. You’ll learn how this leading manufacturer of flooring materials started with a B2B portal, then added a catalog with rich content and saw 150% sales growth in the digital channel.
FREE Case study: 150% Sales Growth with Rich Content
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