2017 was a watershed year for e-commerce. As a technology executive with more than seven years of experience leading e-commerce platform companies, I am seeing firsthand that online buying is becoming the new normal for American businesses. For proof that B2B e-commerce is intensifying, look no further than Amazon. Since launching Amazon Business in 2015, the online retail behemoth has moved aggressively into the B2B sector, attracting more than one million business customers.
With business e-commerce in the U.S. on track to hit $1.2 trillion by 2021, according to Forrester, it’s crucial for B2B merchants to accelerate their moves toward digital transformation. Here are a few thoughts on how the industry will evolve in 2018.
B2B Buyers Are Getting Younger
According to a recent Google report, nearly half of B2B buyers are millennials. This doesn't surprise me because our customers have been telling us that their buyers are young, tech-savvy and sophisticated. Unlike their older counterparts, they expect the purchasing ease-of-use they are accustomed to on consumer websites.
Understanding the unique purchasing preferences of these younger buyers will be increasingly critical to the long-term growth of B2B merchants. Buyers are no longer willing to tolerate cumbersome or circuitous purchasing processes that require significant human interaction. They demand intuitive, self-service interfaces and 24/7 e-commerce availability.
I recently met with a company in the global wood distribution business. During a meeting break, I talked to its head of strategy about the company’s shift toward e-commerce and the growing visibility of millennial purchasers. He said he believed the company, a $100 million corporation, would be out of business in five years if it didn’t make a major shift to e-commerce. If an enterprise in the wood distribution sector is concerned about its survival without e-commerce, it seems obvious that all B2B businesses need to embrace digital transformation, paying particular attention to the changing mix of buyer demographics.
Mobile E-Commerce Is Here To Stay
As buyers are getting younger, they are increasingly mobile. According to Google’s recent report, “The Changing Face of B2B Marketing,” 42% of B2B customers use mobile devices during their purchasing process. From researching products and comparing prices and feature sets to contacting merchants and completing transactions, business buyers depend on mobile devices along the entire purchase path.
In today’s always-on workplace, a purchasing manager may find himself completing a complex RFP for a major company purchase while simultaneously running out the door to take the kids to school. As buyers jump from buying gifts on Amazon to hailing rides from Uber, they have come to expect the same mobile convenience for professional purchases. Businesses that want to succeed in e-commerce increasingly need to optimize for those users. They need to create website designs that work for smaller screens. And, more fundamentally, they need to choose e-commerce platforms that are mobile-optimized from the beginning to deliver a comprehensive mobile commerce experience.
Personalization Is King
In addition to making purchasing processes more mobile-friendly and intuitive, remember that business clients expect the red-carpet treatment. The last thing a wine and beer distributor wants to see on your website is offers for distilled spirits she never purchases. Buyers expect catalogs, pricing and product selection to be curated for their purchases and organized according to their specific needs. For complex B2B businesses that offer many product lines, have large catalogs and serve many different sectors, individualization can significantly affect online revenue.
One of the most tangible ways to deliver personalization is through customized and dynamic pricing. According to research firm Gartner, 2018 will see around 40% of B2B commerce sites using price optimization algorithms to deliver dynamic pricing. In practical terms, that means sophisticated personalization, taking into account such parameters as purchasing volume, frequency and long-term relationship value. A procurement agent who purchases millions of dollars of running shoes every year should expect a more attractive set of pricing incentives than a buyer who purchases footwear on an ad-hoc basis.
It is also important for online merchants to map the customer journey and to understand places where interactions are disjointed or too impersonal. Identifying areas where the destination feels unknown will help you create a seamless experience across all channels of purchase and interaction. Companies that create personalized customer experiences will be the ones that win in 2018 and beyond.
Multi-System Integration Is Useful
To deliver efficient and customized service, merchants will increasingly need to integrate their e-commerce systems with other core platforms, from large back-end supply chain software to customer relationship management systems. For their own survival, companies and their executives could benefit from access to a unified global view of all channel-selling activities.
A system that seamlessly combines e-commerce data with detailed customer interaction history gives every team member access to the same holistic overview. This type of fully integrated solution knocks down functional silos, giving sales, marketing and customer service teams the ability to cooperate efficiently. Tomorrow’s B2B winners will be the companies that can integrate disparate technology platforms and make them work together in a way that maximizes their utility to all members of an organization.
Investment in your company’s technology infrastructure and business systems can seem daunting, but these platforms will help build a foundation to transform your business’ digital future. If you embrace the key trends that are reshaping business-to-business e-commerce, your customers will not only become loyal brand advocates, they will see you as leaders in the industry.
