B2B Ecommerce: Why Embrace It and How to Succeed
The recent global upheaval has kickstarted a period of exponential growth for B2B ecommerce. There’s always been huge potential for businesses to get closer to customers, boost revenue and expand market position through ecommerce, and now there’s a commercial risk of not embracing it. If you sell to other businesses, you may be surprised to learn just how crucial it is to have some form of B2B ecommerce activity and that Shopify could be the right ecommerce platform for you.
Written By
Swanky
As consumers, our buying behaviours have undergone such a seismic shift recently, it’s only to be expected that these changes are going to be reflected in our business lives. Business-to-business (B2B) ecommerce has been gradually coming of age, but it has been catapulted into the spotlight by recent global events. In a recent survey, 50% of buyers now frequently use an ecommerce platform to place orders, up from just 28% two years ago1. When we consider this on a bigger scale, every market around the globe is seeing an equal or increasing volume of B2B revenue coming through ecommerce channels since the pandemic started and it doesn’t look like this trend is slowing down2.
Global B2B online sales are expected to top $12trillion by 20243 and part of this growth is a distinct change in the B2B buyer demographic, which is now primarily made up of millennials4 – the original digital natives. Not to mention, every stage of the buying process from research and discovery through to purchase-ready is now predominantly happening online. One older survey found B2B buyers start with around 12 online searches when looking for a product, a number which is very likely to have increased by now5.
There’s been a historic reluctance in some industries to embrace ecommerce, with fears that it would become a replacement for person-to-person interactions, diminish the value of relationships between customers and account managers, as well as reduce visibility in the business of its customers. B2B ecommerce could also be dismissed by those unwilling to embrace it as something that was only realistic for simple or highly consumable items.
However, this couldn’t be further from today’s reality. Even complex products or those with multiple customisation options that have previously been thought of as too complicated to deliver through an ecommerce platform are now being offered for purchase online. Business buyers are looking online first to discover new suppliers and products and it’s now a significant benefit in the customer experience to offer an effective, personalised ecommerce purchasing experience.
So, in this article, we’ll look at the changing B2B ecosystem, unpick the different routes into ecommerce, discuss why Shopify is a suitable platform for B2B ecommerce and share more about why it’s so important that businesses embrace this channel.
Why embrace B2B ecommerce?
#1 Increase revenue
With an online store dedicated to your business customers, you can offer a 24/365 shopping environment that has personalised pricing for each account, bespoke deals, payment terms and fulfilment options. Customers can purchase without the need to wait for a conversation with an account manager, having fully customised their order, placed it and received confirmation of it. You’ll also likely experience secondary benefits including increase in purchase frequency from your loyal customers, increase in average order value (AOV) and reduced customer churn.
#2 Reduce operational costs
Often the main driver for businesses to embrace B2B ecommerce is the reduction of operational costs. By offering online purchasing, you can reduce the sales admin workload of the team. They no longer need to manually process orders, send invoices or liaise over fulfilment details, which means their time can be better spent working on the relationship with the customer, listening to their feedback and growing their customer lifetime value (CLTV). You may also be able to make operational savings by optimising couriers and picking the best deal for delivery of each order, or by offering a delayed single delivery rather than individual shipments as availability allows.
#3 Improve customer experience
Customer experience may not be something your business has considered holistically but it’s a crucial part of future growth, in both client acquisition and retention. As we discussed earlier, the difference in customer behaviours from direct-to-consumer (DTC) and B2B is reducing and customers demand a better experience. In fact, one study found that 70% of business buyers expect a consumer-like experience6. That doesn’t just mean the online experience, although that’s highly important, it means every aspect of every interaction with a business. By offering a seamless experience, your business is creating a loyal customer base who fit into the category of ‘trusted partner’. Those customers typically buy more product and more frequently than those who aren’t, and as we know, it’s cheaper and more beneficial to generate growth from a loyal customer base than acquire new customers7.
#4 Reduce organisational silos
Having an ecommerce platform at the centre of your B2B sales process often has the side effect of reducing operational silos within the business. Directly related to being focused on customer experience, overcoming silos means there’s greater visibility of customer behaviours, which includes account activity, product popularity, and purchasing history etc.
#5 Be more sustainable
A core part of doing business in 2022 and beyond, becoming more sustainable should be the ambition of every business. By opening up a B2B ecommerce platform, businesses can embrace sustainable manufacturing processes such as on-demand production and reducing carbon emissions through logistics and processing. Using a partner like Swanky also means you’re offsetting the carbon footprint of your platform production.
Routes into B2B ecommerce
There are obvious gains that every business can enjoy when they embrace B2B ecommerce, but choosing the right route will depend on the individual business. Whether you have an incredibly technical, complex product that includes multiple customisation options, or you have hundreds of thousands of SKUs, there’s a solution for you.
#1 Wholesale
This is the most common way a business can generate sales online; by having their own wholesale storefront for wholesale transactions. Distributor/retailer customers can browse, order and manage their account through your store. This means they can keep track of their purchases, view the status of their orders, download invoices and get help through the platform, often via instant messaging or a chatbot. Platforms like Shopify Plus are designed with all the infrastructure in place to offer a personalised experience and pricing for different customers upon login.
#2 Marketplace
The role of marketplaces in B2B ecommerce is tipped to explode in the next two years; from 7.5% to almost 45% of all B2B transactions3. Unsurprisingly, SMEs have the most exposure on these platforms, possibly because of the perceived complexity or inertia within a business to change their online sales strategy to include marketplace presence. But it’s clear the demand is there as nearly half of business buyers will increase marketplace purchasing in the next one to three years.
The benefits of starting out on a marketplace if you’re new to B2B ecommerce are obvious – limited upfront resource needed to get going, support through the platform, and instant exposure to an existing audience that includes new and possibly some existing customers. A marketplace may also allow your business to assess how ready the infrastructure is to offer a full wholesale service via an ecommerce platform. For instance, you could test a marketplace with holiday stock returns, and not only benefit from moving stock on that would otherwise not be sold, but also reducing warehousing and restocking costs.
#3 Parts and manufacturing
If you’re a business taking in raw materials and completing part of the manufacturing process, or you supply parts to other businesses, you could still benefit from an ecommerce presence. This is particularly relevant to the automotive industry, whether selling parts or raw materials to car brands or garages, offering independent, 24/7 ordering is essential for your customers to deliver their service/products to consumers.
#4 Distribution
If your business imports and/or distributes to other wholesalers, an ecommerce storefront would allow your customers greater independence in their research and purchasing journey. You may have complexities around individual customer terms, pricing or payment methods, but it’s common to find that an ecommerce platform actually makes managing these factors easier and less time-consuming. You may also have thousands of individual SKUs, so an ecommerce platform will make every single product discoverable in a search. You could see a significant uplift in your revenue just by getting each product line and variant onto an ecommerce platform.
Whichever route into B2B ecommerce you choose, you’ll be moving closer to your customers, opening up new prospects and providing a better customer experience.
Why customer experience matters
Customer experience (CX) refers to every interaction a customer has with your business, whether independently or directly through one of your representatives. This means from the very first moment a prospect becomes aware of you through to an ongoing relationship as a repeat customer or trusted partner, providing a positive experience drives satisfaction and retention.
The B2B customer experience can sometimes be neglected on the assumption that since transactions are happening via 1-2-1 contact with an account manager, it’s, therefore, the best type of customer experience. But there are so many other touchpoints that matter, such as website experience, email communications, customer support etc. The ‘experience economy’ is the next battleground in B2B, just as it has been in DTC for some time.
There are many similarities between businesses in DTC and B2B that have a customer-centric approach, and the principle in both situations is simple – meet or exceed customer expectations. We know that 89% of B2B researchers start their product hunt with a search engine, so it’s imperative that the experience on your website is smooth and fulfilling5. This is especially pertinent as 43% of B2B buyers would now prefer not to interact with a sales rep at all8.
In order to meet the needs of this audience, the customer needs to feel confident in their purchasing decision without ever interacting with a person. As such, your self-serve portal, whether that’s an owned B2B ecommerce platform or a store on a marketplace, must provide all the information they need to achieve confidence in their purchase.
Shopify as a B2B ecommerce platform
Traditionally rooted in DTC ecommerce, Shopify has a reputation as one of the best platforms for merchants to grow their brands selling direct to consumers. Its suitability for B2B applications hasn’t been fully recognised in the past, possibly because of this strong reputation in DTC. But it’s certainly an incorrect assumption that Shopify isn’t capable or even effective as the B2B ecommerce platform of choice.
The main benefit of having your B2B and DTC storefronts on the same platform is that everything is in one place. That means everything from inventory, orders and pricing to logistics, fulfilment and shipping can live on one platform. No more separate software systems not talking to each other, no more reporting on multiple platforms, and no more data silos.
With Shopify Plus, we’re able to deliver personalised shopping experiences for your VIP customers, customised pricing including volume options, and custom pages for individual T&Cs. As Shopify Plus veterans, we’ve been building on Shopify’s already extensive capabilities to create custom user experiences and functionality for over 10 years.
Award-winning B2B ecommerce store for Saddleback
The expert team at Swanky recently won the UK Digital Growth Award for the B2B Site of the Year 2021 for Saddleback.
Saddleback has evolved from humble beginnings to one of the most esteemed names in Europe’s cycling industry. Led by a team of dedicated riders who share an obsession for the world’s finest cycling gear, the company boasts an impressive portfolio of industry-leading cycling brands.
As a leader in the industry, Saddleback established an extensive network of quality stockists across Europe. Their UK B2B site, which launched in September 2020, is exclusive to registered trade accounts only. It is a portal for official distributors to view and purchase products at trade prices.
The target audience is high-end stockists operating in the UK’s elite cycling market. They expect relevance and convenience at every stage of the buying cycle, with effortless buyer-seller interactions at each touchpoint.
The team at Swanky created a customer-centric experience through the use of Shopify Plus functionality. We delivered a personalised pricing solution for different user tiers, a bespoke credit app that allows buyers to shop up to their credit limit and a streamlined UX-led design that allows stockists to purchase easily and quickly. You can read more about this project in the case study, which details their 881% growth in sales!
Saddleback’s UK B2B site represents a combination of Swanky’s extensive Shopify Plus development expertise and UX-led creativity. Not only does the store encapsulate Saddleback’s position in the upper echelons of the cycling market with its premium aesthetics, it provides a streamlined, intuitive buying experience for stockists thanks to a number of technical innovations. Having a well-functioning site that streamlines many of the B2B processes has allowed Saddleback to focus more of their energy on navigating Brexit with their suite of EU based suppliers. The success of Saddleback’s UK B2B site on the Shopify platform has enabled them to thrive during an unsettled retail year – but more than this, it has enabled Saddleback’s large network of UK retailers to thrive.
Measuring ecommerce success
As with any business growth project, it’s important to understand how to measure success. When you’re ready to take your business into the ecommerce world there are several benefits you can expect as we discussed earlier, but it’s important to put some metrics in the plan that you’ll use to monitor your key performance indicators (KPIs). These could include direct revenue metrics such as:
- Total ecommerce sales
- Average order value (AOV)
- Repeat order frequency
However, it’s also important to set secondary KPIs that measure your progress on the way to achieving those revenue KPIs. This could include:
- Website performance – visits, traffic sources, interactions
- New customer acquisition
- Customer service interactions – volume and quality
- Returns volume and frequency
- Feedback and reviews
According to Shopify Plus customer Laird Superfood:
“It’s fair to say that having the wholesale portal will save us the equivalent of one employee a year. That’s $50,000 to $60,000 a year and covers the cost of Shopify Plus several times over.”
Let’s get started
It’s not a case of if rather than when you need to take the next step in your B2B ecommerce journey, and the team at Swanky can help. Whatever stage of the journey you’re at, we’d love to explore your B2B ecommerce options with you. We have the Shopify expertise, you know your brand, so let’s talk.
For reference:
[1] https://www.sana-commerce.com/b2b-buyer-report/ [2] https://www.statista.com/statistics/1195343/b2b-revenue-made-through-e-commerce-channels-by-country/ [3] https://www.digitalcommerce360.com/2019/10/31/global-b2b-e-marketplace-sales-could-hit-3-6-trillion-in-five-years/ [4] https://www.brandingstrategyinsider.com/how-millennials-are-changing-the-b2b-buyer-profile/#.X80TnRP7Qch [5] https://www.thinkwithgoogle.com/consumer-insights/consumer-trends/the-changing-face-b2b-marketing/ [6] https://www.americanexpress.com/content/dam/amex/us/merchant/pdf/bcfm/digital-transformation-ebook-understanding-the-digital-transformation-in-b2b.pdf [7] https://business.linkedin.com/marketing-solutions/b2b-institute/marketing-as-growth [8] https://www.gartner.com/smarterwithgartner/b2b-sales-must-focus-on-seller-assisted-digital-experiences