“Business-to-business commerce will never be the same,” Forrester Research Inc. says in a report released today that details how the rapid increase in online ordering is displacing many sales reps at manufacturers, wholesalers and distributors.
The report, “Death of a (B2B) Salesman,” by Forrester e-business analyst Andy Hoar, projects that 1 million sales reps, or 22% of the 4.5 million B2B sales agents now in the United States, will lose their jobs to e-commerce by 2020.
Among the primary reasons, Hoar says, is that “B2B buyer behavior has changed significantly in the past few years.” Nearly 75% of B2B buyers say buying from an e-commerce site is more convenient that buying from a sales rep, and 93% say they prefer buying online when they’ve already decided what to buy, Hoar says, citing a survey of 236 B2B buyers Forrester conducted with Internet Retailer in the first quarter of this year. Internet Retailer publishes several annual books of e-commerce data as well as other publications as a part of Vertical Web Media LLC, which also publishes B2BecNews.
Most of the lost jobs, Hoar says, will be among sales reps involved in basic order processing, while sales reps that offer higher-end services to help buyers in large corporations order complex products and systems will fare better. “Order takers are the ones in trouble,” he says. “It all comes down to value in the ordering process—whether sales reps add value or not.”
The report, using figures from the U.S. Department of Labor for the period 2012 – 2020, divides sales reps into the following four categories; the projected loss of jobs over that period declines in an inverse correlation with the level of service a rep offers, with the reps offering the highest value actually growing in number by 10%. Here is a breakdown of Forrester’s projections for these four categories:
- ”Order takers,” who generally process orders that customers could easily place through online self-service. Job loss: 33%, or close to 550,000 out of 1.6 million jobs;
- ”Explainers,” who provide buyers with more information about complex products. Job loss: 25%, or close to 400,000 out of 1.5 million jobs;
- ”Navigators,” who help buyers understand what their own companies need to purchase. Job loss: 15%, or close to 150,000 out of 900,000 jobs;
- ”Consultants,” who have extensive knowledge about the buyer’s company to help the buyer understand what her company needs to purchase. Job gain: 10%, to 550,000 from 500,000.
Forrester says the biggest impact will be on the overall sales rep staffs at wholesalers and distributors, but less so in such industries as high-tech manufacturers and providers of health care technology.
Forrester indicates that trend toward more self-service online ordering is only likely to increase as more companies that sell to businesses and government agencies get into e-commerce. It notes that “just 25% of B2B companies today actively sell online,” and encourages more companies to develop e-commerce sites that provide B2B buyers with the product information, along with search and purchasing features, that let their customers more easily buy online. In many cases for B2B buyers, Hoar says, e-commerce “has taken away the need to talk to someone to explain things.”
Another trend contributing to the shift to self-service e-commerce is the increased efficiency online order brings to sellers—for example, through lower employee costs and overall operating expenses, Forrester says. “A company we interviewed estimates that it reduced its cost per order from $24.48 per transaction via a salesperson-driven paper-based ordering system to $1.50 per transaction via a customer self-serve e-commerce,” the report says.
Forrester also notes, however, that B2B buyers will continue to prefer purchasing through sales reps in certain situations, such as for complex products and systems procured across large enterprises. Yet even in these situations, communications between buyer and reps are going more digital, Hoar says. “They’re increasingly conducting those negotiations with salespeople by way of digital means such as email, [live] chat, and collaborative software as opposed to via a traditional phone call,” the report says.
Hoar will discuss the results of his report during a webinar on April 29.
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