All the B's in B2B Ecommerce
Segmentation and understanding digital business models are key to thriving in B2B ecommerce.
B2B ecommerce is the fastest-growing segment of online sales. Traditional retail ecommerce (B2C) has reached a more mature state, as Amazon and online marketplaces forced traditional retailers to move away from physical locations (i.e., shopping malls) to building engaging online environments. This shift in consumer behavior and expectations quickly altered buyer behavior in B2B. The pandemic accelerated this shift in B2B as traditional in-person sales were shuttered during the COVID-19 lockdowns.
During the pandemic, most distributors and many manufacturers invested in ecommerce. Often, the decision was not strategic, but purely out of self-preservation. Thanks to a little nudge from COVID-19, many manufacturers and distributors realize that ecommerce is a path to growth and efficiency. However, many also recognize that the technology and platform decisions made in haste during the pandemic are unsustainable. Many companies purchased well-known ecommerce platforms that were the heroes of online retail sales. B2B is different.
Segmenting B2B Ecommerce
The conversation about B2B ecommerce typically starts with talking about B2B companies. Aside from traditional retailers, aren’t most companies, “B2B companies?” Different segments of B2B sales have very different business models and needs. There are many B's in B2B including manufacturers, distributors, and more.
Manufacturers
Most manufacturers sell through distributors and dealers. Manufacturers have the most complex ecommerce needs, but they also have the biggest opportunities for growth and ROI.
Portals - Leading manufacturers are now using portals to bring together buying and selling roles, as well as various systems such as service, CPQ, and more in a single pane of glass. Portals allow salespeople to manage distributor and dealer accounts, including managing RFQs, routing complex orders, and more. Distributors and dealers can place RFQs, look at order history, pay invoices, order products, choose shipping options, and centrally submit service tickets. Portals have automated administrative functions of sales and customer service, leading to a better customer experience and greater ROI.
Parts - Many manufacturers sell aftermarket parts. Allowing dealers and distributors (channel), and even end customers, to log into an ecommerce experience creates an easier and more efficient customer experience. Channels and customers can search parts by product or serial number, and the channel can still fulfill (at least in appearance), allowing both the channel and the manufacturer to capture revenue.
Channel Enablement (B2B2C) - Dealers and distributors often are not big enough to operate their ecommerce channel. Manufacturers that rely on smaller dealers and distributors are at risk of losing sales as younger buyers are loyal to the ease of purchasing online. Progressive manufacturers have an opportunity to provide self-serve ecommerce technology to these channels. This creates channel loyalty and enables the channel to continue to survive in a digital world. This model is known as B2B2C, wherethe “middle B” (the channel ) sells on behalf of the first “B” (the manufacturer) to the end customer.
Growth - Manufacturers that expose their products to be found online have an easy opportunity to be found (via search) and grow. Manufacturers can share or hide pricing depending on the strategy and can use CTAs like “request a quote” to capture new leads.
Discover how Bradley Corporation streamlined its complex distributor relationships through an ecommerce portal, driving efficiency and growth.
Wholesalers and Suppliers
Wholesalers and suppliers often have ecommerce needs and opportunities similar to manufacturers. Wholesalers and suppliers tend to hold inventory, have multiple distribution centers, and often aim to enable smaller distributors which may include independent retailers.
B2B Portal or Store Experience - Wholesalers offer bulk ordering and account management (order history, quick order, etc.) to the distributors and retailers they serve.
Sales Enablement - Often wholesalers and suppliers have field sales teams that work to expand product assortment and place bulk orders on behalf of customers. This may happen onsite or when returning from a meeting. A portal for salespeople that keeps them mobile and away from a slow ERP is crucial.
Channel Enablement - Enabling smaller distributors is a key component to moving inventory and creating sell-through. Like manufacturers, progressive wholesalers and suppliers have an opportunity to provide self-serve ecommerce technology to channels. This creates channel loyalty and enables the channel to continue to survive in a digital world. This is a B2B2C or B2B2B ecommerce model. More B's in B2B.
Discover how PCNA promotes multi-channel ecommerce, empowering their channel network with a self-serve ecommerce experience.
Distributors
Distributors were early adopters of ecommerce. The largest distributors with the broadest assortment, such as Grainger, invested early and thus forced other distributors to follow. Distribution is deserving of segmentation due to the breadth and depth of distribution across categories. Growing distributors have some unique needs and opportunities:
Multiple Storefronts - Due to mergers and acquisitions, many distributors own and manage multiple distribution brands. Centralizing ecommerce on one tech stack post-merger brings efficiencies and improves margins.
Segmentation - Most distributors sell to different customer types. Showing the correct product assortment, content, and experience is key to driving adoption.
Procured Product Assortments - Distributors that deal with government, healthcare, or large enterprises often need to manage procured catalogs for contract compliance.
New Product Lines - Updating and offering new products is a key function of a distributor. This is particularly important for distributors focused on growth and helping their customers solve problems. Distributors must be able to easily manage and share the correct product information in an ecommerce experience.
Discover how Land & Coates centralized multi-brand, multi-store B2C and B2B ecommerce.
B2B2C Program Management
Another ecommerce model is program management. An example of programs are when a business customer has a specified set of products that are approved and purchased by the customer’s employees. Program management is common in the uniform industry where companies choose their specified uniform program that the uniform manufacturer or distributor manages. Products are offered through a company store that employees access and buy the product.
Discover how Munro’s Saftey Apparel manages uniform programs, ensuring compliance and simplifying the purchasing process.
Criteria for Selecting a B2B Ecommerce Platform and Serving All the B's in B2B
Selecting a B2B ecommerce platform requires planning, a solid set of requirements, and a clear vision. While requirements can get very specific around features, there is one key requirement that is necessary for success regardless of the business model: flexibility.
No two businesses are alike in B2B. Business models, product types, contract rules, ERPs, and more are all unique to each company. An ecommerce platform must be flexible to fit the business, instead of the business re-engineering itself to fit the platform.
So what is flexibility? It starts with an API-first architecture allowing for data to be exchanged with third-party systems, especially ERPs. The heart of any manufacturer or distributor is its ERP.
Flexibility also comes from the data model. The data model must be dynamic to allow for new fields and attributes when adding new product lines, managing customized and configured products, or adding fields to accounts. For speed to market, all of this must be accomplished without the need for a developer.
The data model must also support multi-store management and catalog management. More than 50% of manufacturers and distributors run multiple storefronts, and many also target multiple segments or have specified catalogs and assortments. A data model that easily allows for multiple stores and catalogs provides the flexibility and ease of administration to serve customers.