Many companies are improving their performance in B2B e-commerce by better meeting customer demand, and those lagging behind better take note, Forrester Research Inc. says in a study released Friday.
“It is critical that B2B companies know when they’re performing well with their customers and when they’re falling short,” Forrester says in the study, whose primary author is Andy Hoar, Forrester’s principal analyst for B2B e-commerce.
B2B e-commerce is still in early stages of development, but maturing rapidly, he adds. The study notes, for example, that 70% of companies engaged in B2B e-commerce say more than 10% of their sales are online, and that 25% say the web accounts for 50% or more of sales. Moreover, 50% say they expect that at least half of their customers will buy from them online within three years. The study was based on a survey Forrester conducted in May through August of 2015 with Vertical Web Media of more than 120 companies involved in B2B e-commerce. Vertical Web Media is the publisher of B2BecNews, B2BeCommerceWorld.com and Internet Retailer magazine.
The study notes several overall B2B e-commerce performance metrics, including an average conversion rate across all respondents of 8% and an overall average order value of $2,067. By comparison, Forrester notes that the B2B conversion rate is more than three times the typical retail website conversion rate, and that the B2B average order value dwarfs the $171 cited for retail e-commerce in Forrester’s report, “The State Of Retailing Online 2015: Key Metrics, Initiatives, And Mobile Benchmarks.”
But with increased online orders also comes increased online operating costs, the study found. It notes a mix of responses related to such metrics as profitability and costs associated with marketing and customer service. It says that 47% of respondents said their profitability per online order was increasing, while 32% and 15% cited increases in per-order costs tied to marketing and customer service, respectively.
Forrester says the following percentages of respondents in the study said these performance metrics in their B2B e-commerce operations were increasing/staying the same/decreasing:
- Share of online sales from repeat customers, 61%/22%/5%;
- Average order value, 51%/31%/13%;
- Profitability of orders, 47%/34%/9%;
- Conversion rates, 43%/39%/9%;
- Average number of lines per order, 37%/43%/5%;
- Customer acquisition cost per order, 33%/33%/15%;
- Marketing costs per order, 32%/37%/17%;
- Share of sales booked with discounted pricing, 24%/42%/17%;
- Fulfillment costs per order, 15%/42%/22%;
- Customer service costs per order, 15%/43%/17%;
- Returned orders as a percent of online sales; 14%35%/18%;
- Shopping cart abandonment rate, 11%/49%/16%.
(Percentages don’t add up to 100% for each metric because of respondents who didn’t provide an answer.)
Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web— Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Paul Demery, editor for B2B e-commerce, on Twitter @pdemery.
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