B2B vs. B2C + SAP
I’m not sure why, but over the past several weeks the marketplace has repeatedly drawn us into conversations about the B2C (business to consumer) business model. That got me to thinking about what the B2C model actually is…from a business, technical and SAP perspective…and how it differs from the B2B (business to business) model that is our namesake…b2b2dot0. Most importantly, it got me to thinking about what we have to do to in order to support these business models…in an Agile way.
Today I start a series of posts on this topic.
To begin with we start with the basic definitions:
B2B – while traditionally defined as “business to business”, I find it more useful to define it as “business to buyer”. In practice, buyers are the predominant role type that use our B2B SAP Integrated Order Management solution today. They are typically purchasing professionals who purchase products on behalf of other users/departments/organizations that they are responsible for. They usually require less education on products, they mostly buy on customized contracts that have personalized pricing and shipping and payment terms and purchase enough to have to deal with open order tracking and invoicing issues. In our world, B2B means a Manufacturer selling to Distributors, Dealers, or large Corporations.
B2C – is a business selling to a consumer who is buying product for his/her own consumption. Consumers are characterized more as “shoppers” than they are “buyers”. They typically need more information about products and services before they make a purchasing decision and buy less frequently than the professional buyers. They can be small business owners, scientists, engineers, etc. who are purchasing for their own business consumption. They aren’t just buying from the retail channel for their own household use. They mostly use credit cards for payment. In our world, B2C usually is the model used for Manufacturers selling to their smaller customers…those they don’t want to make the effort to setup/manage as SoldTo’s in their SAP system.
Next I’ll discuss the fundamental differences between B2C and B2B from a user experience perspective.
- B2C has a strong “merchandising” component. While all purchasers of product need information in order to make educated buying decisions, Manufacturer’s marketing departments seem to believe that B2C users require more information and encouragement to buy than their B2B counterparts. In our experience, that usually means reliance on standalone product catalogs and content management solutions for the B2C scenario and simply relying on paper catalogs and SAP’s Material Master for the B2B scenario.
- B2C allows for “anonymous product selection”. B2C shoppers can place products into their carts before they identify themselves to the website. This is usually forbidden/discouraged in the B2B model because it prevents displaying personalized pricing and real time product availability. Both are usually required for the B2B purchasing professional and only available from SAP.
- B2C allows for real time site “registration”. This is enabled by simple contract terms and credit card only ordering. The B2B scenario requires additional negotiations, credit checks, certifications etc. with every new customer that culminates in the creation of an SAP Customer Master Record. This rarely can be achieved in real time and most customer service organizations don’t want to invest in creating unless the customer will produce significant revenue.
- B2C has a simpler user interface. The B2C user rarely has a need to put products into the shopping cart by means other than browsing and searching for products. The B2B user is focused on speed of entry and larger orders. That means they need to enter product numbers directly into shopping carts, upload spreadsheet orders, order from previous orders etc. Researching orders is much easier for the B2C users since they typically have a fewer number of orders to manage. The B2B user may have to research historical orders for order tracking and contract negotiation purposes and therefore requires greater searching and selecting capabilities.
My next post will discuss some of the technical architectures that we’ve seen to integrate B2C websites to and from SAP and how they compare to the B2B approach.
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