B2B Beat: E-Commerce, It's Not Just for B2C Anymore
July 19, 2015
The B2B buying process has moved online. Everyone’s heard the statistic that up to 90 percent of the B2B purchase path is completed by the time a prospect reaches out to the sales team.
If prospects are researching B2B purchases online, it’s only a small step until they’re actually acquiring the products online. Consumers are comfortable buying everything from books to patio furniture on Amazon, and many of those same consumers are apparently growing more comfortable making B2B purchases online, too.
By 2020, the B2B e-commerce market in the United States will reach $1.13 trillion, or 12.1 percent of the total B2B marketplace, according to Forrester Research’s report, U.S. B2B eCommerce Forecast, 2015 to 2020. This year, B2B e-commerce in the U.S. will total $780 billion, or 9.3 percent of the total market. Forrester projects that B2B e-commerce will grow at a compound annual growth rate of 7.7 percent between 2015 and 2020.
Forrester said the reasons for the growth are clear. First, B2B companies believe they can save money via e-commerce sales. Forrester said, “56 percent of B2B eCommerce executives said that they have certain customers that they can only profitably support online.”
56 percent of B2B eCommerce executives said that they have certain customers that they can only profitably support online.
Second, B2B buyers increasingly prefer e-commerce. Currently, 30 percent of B2B buyers say they complete half of their purchases online, according to Forrester. By 2017, Forrester projects that figure will almost double to 56 percent.
Many B2B companies have already waded deep into e-commerce. Industrial distributors such as Fastenal, Grainger, and McMaster-Carr were among the first B2B companies to embrace the possibilities of e-commerce. Electronics distributors such as Avnet and Digi-Key also have robust e-commerce businesses. As EConsultancy’s listing of 15 of the strongest B2B e-commerce sites attests, online sales have expanded beyond the distributor sector to include office products (Quill), stock photos (Gallery Stock), and building materials (Firerock).
The B2B e-commerce market is attractive enough that new competitors are appearing. A consortium of private equity firms sees an opportunity in B2B e-commerce and acquired eBay Enterprise for $925 million. Alibaba has built a powerful B2B e-commerce business. And Amazon debuted Amazon Supply in 2012 and earlier this year relaunched the expanded venture as Amazon Business.
Getting an e-commerce business started is fairly easy. A business can use free and open source shopping cart software. But conducting e-commerce to the level of the leading online retailers is a significantly more difficult challenge.
A quick glance at E-Commerce & B2B, an incredibly thorough website run by Justin King, who is the global B2B e-commerce evangelist at Oracle, lists just a few B2B customer experience best practices for an e-commerce operation: SEO, on-site search, guided navigation, product detail pages, custom catalog and contracts, quick order, product selectors, configurators, quotes, RFQ, and split shipping.
That list indicates, not surprisingly, that building an e-commerce platform that excels is complex. But it also may be necessary. After all, we remember what online retail did to bookstores.
B2B Move of the Week
Kroll, the risk mitigation and response company, named Barbara Cooperman as its CMO. She was most recently CMO of the College Board. Previously, she held a variety of marketing management roles at Reed Elsevier, where her titles included CMO of Lexis-Nexis.
B2B Resource of the Week
You can't sell, in person or via your website, without leads. For some insight into best practices in lead nurturing, download The Sophisticated Marketer's Crash Course in Lead Nurturing.