B2B Executives’ Priorities in 2018
As the consumerization of B2B e-commerce continues, more and more companies are starting down the path of digital transformation. For those who have started the journey (or those who aren’t sure where to begin), it’s helpful to take the pulse of the industry. What’s going on in B2B e-commerce, and where is the industry headed?
ICF Olson and WBR Digital recently teamed up to conduct a survey on the state of B2B e-commerce. They worked with respondents from 100 B2B companies. Companies below $5 billion in annual revenue represented 70% of respondents, with 39% of respondents representing companies below $500 million. In other words, the survey results indicate midmarket trends with some crossover into the enterprise market.
Here are the key takeaways from the study:
B2B Win: 51% of manufacturers will prioritize e-commerce
The study asked respondents to name the technology initiative that they will prioritize over the next 18 months. 51% of manufacturers chose “e-commerce platform upgrade or replacement,” with 44% of distributors choosing e-commerce.
This is a big win for B2B manufacturers. It indicates that the market is undergoing a transformation to digital-first, which will ultimately create more value for customers and for B2B companies. The more manufacturers and distributors who get on board, the better.
B2B Win: 38% of manufacturers will prioritize order management and back-end integration
E-commerce wasn’t the only technology that manufacturers and distributors will prioritize in the next 18 months. 38% of manufacturers (and 17% of distributors) said they would prioritize order management and back-end integration.
Sounds unrelated to e-commerce? Actually, order management and ERP (back-end) integration are key components of e-commerce. In the complex world of B2B, the best solutions will include order management, or integrate with an order management tool, and they will also integrate with your ERP system. In the case of Corevist, we integrate to SAP ERP—allowing manufacturers and distributors to leverage their ERP investment for e-commerce. More about how it works here.
B2B Win: 62% will measure e-commerce success by new customer acquisition
It’s no good setting a goal you can’t measure. E-commerce isn’t the goal itself. It’s a tool to get to a goal. So what’s the ultimate goal? How are B2B executives measuring e-commerce success?
There are many metrics you can use, but 62% of respondents said the most important metric for their B2B ecommerce success is new customer acquisition. If you’re looking to grow and take on greater market share, e-commerce coupled with intelligent marketing can differentiate you from the competition and help you reach new segments like Millennial buyers, who prefer a self-service e-commerce experience like Amazon.
B2B Win: 60% will measure e-commerce success by adoption rate
New customer acquisition is an excellent e-commerce success metric, it isn’t the only one you can use. In some industries, new customer acquisition may not be your highest priority. Maybe you want to move existing sales online to leverage the resulting efficiencies.
This is a valid metric, too. 60% of respondents said the percentage of their existing customers buying online is their most important ecommerce success metric. It’s a great metric for companies that are focusing on the digital transformation with their existing customer base—and this metric can work alongside new customer acquisition, too.
B2B Struggle: Executive buy-in
Executives are buying in, but there is still work to be done. 33% of respondents claim their executives are 100% supportive of building out better digital tools, like CRM and e-commerce. 43% of respondents say their executives are somewhat supportive.
Why is there a gap, and what does that gap look like? 67% of respondents said B2B e-commerce is critical to their business advantage, but only 50% said accelerating B2B ecommerce is a strategic priority for their executives. Even more tellingly, only 21% said their company is shifting to online selling faster than their competition. (P.S.: It’s a green field to get ahead in B2B e-commerce!)
At Corevist, we find that executive buy-in is absolutely critical to the success of e-commerce. That’s because e-commerce requires a cultural and practical commitment at all levels of the organization. Senior leadership needs to demonstrate that commitment so that the team takes full advantage of the opportunities which e-commerce offers.
How can you secure the buy-in of key executives like your CEO and CIO? Do your research and show the numbers that you expect to generate with e-commerce, whether it’s finding new business, moving existing business online, or both. If you can communicate the real business value of e-commerce to the C-suite, you can ensure the success of your project.
B2B Struggle: Finding a starting point
The digital transformation is a total shift at all levels of the organization. It’s a cultural shift, a new toolset, and a new set of practical opportunities and pitfalls. It’s a daunting transformation. Where do you start?
Good question. The survey respondents weren’t sure. 59% said the key starting point for their digital transformation was shifting from a legacy approach to emerging digital technologies. But… that isn’t a practical starting point! It’s the general result you’re trying to achieve (though it does express the cultural shift that’s required to execute a digital transformation). You can’t start with where you want to end up. You should start small and grow.
An intelligent starting point is a concrete project with definable goals—i.e., launch ecommerce to 1 market segment, drive 50% adoption among that customer base, and do it all within 1 year. Now that’s a starting point to a digital transformation. It has a timeframe, a defined market, and metrics built in.
B2B Struggle: Customer Support preparedness
Survey respondents were asked how prepared their internal teams are for the digital transformation. 57% reported that Customer Service was not at all prepared or only somewhat prepared for the shift.
There’s a lot of work left to be done. Customer Support may feel threatened by e-commerce, thinking it will change their jobs for the worse in ways they can’t imagine. While e-commerce will change Customer Support, that change will only be for the better. E-commerce with order tracking will make it easier for your CSRs to find orders and drill down into issues. Ultimately, it will mean fewer headaches for them, and fewer headaches for your customers, too.
B2B Struggle: Analytics preparedness
Likewise, 47% of respondents said their Analytics and Data Insight teams were not at all prepared, or only somewhat prepared, for digital transformation.
This is a big hole—but B2B companies don’t have to solve it on their own. E-commerce solutions like Corevist use Google Analytics, Pendo, and Fullstory to provide deep data insight into how customers behave on your e-commerce site. With a trusted advisor showing you the ropes, you don’t have to wade into the deep end on your own. We can help you understand which metrics matter most for B2B e-commerce.
B2B Struggle: Cybersecurity preparedness
42% of respondents said their Cybersecurity and Privacy teams were not at all prepared, or only somewhat prepared, for digital transformation. Yikes.
This lack of preparation may stem from a misunderstanding of what the market offers. A cloud-based solution, like Corevist integrating Magento to SAP, handles e-commerce security for you—as we put it, “We’re cool and secure.” Of course, the e-commerce store isn’t the only potential weak point. If your web shop is integrated to your ERP system, you may have concerns about the integration, too. It’s important to work with a vendor who is certified to integrate to your ERP—for example, Corevist is certified on SAP NetWeaver.
The survey gives us a slice of life inside the B2B e-commerce world. It indicates that the market is maturing, that e-commerce is becoming the new norm, but that many people in the industry have questions. More education is needed to help everyone in the organization understand what e-commerce can do. If you have any questions about e-commerce, especially as it relates to SAP, don’t hesitate to contact us—we’d love to chat.