It likely comes as no surprise that the 2016 holiday season brought a significant jump in online sales to consumers. In fact, sales among merchants on our e-commerce platform saw a 27% increase year over year. Most notable though was the 23% growth in the industrial business-to-business vertical during the 2016 holiday season.
As a result, the big story from the 2016 holiday sales, at least for us, was the explosive growth of online sales for the B2B merchants, marking an evolution in e-commerce and in the way traditional businesses are doing business today.
Steve Weber, president and CEO, nChannel
The companies in this vertical are selling products like safety equipment, air purification systems, law enforcement supplies, among many others. Some are manufacturers, others are distributors, but all are selling wholesale to B2B customers online.
The Past: Like their business-to-consumer counterparts, B2B sellers have taken note of the importance of offering a multichannel experience to help drive sales. This marks a significant shift for this industry. Not long ago, most manufacturers and distributors went online only as a way to avoid costs, and were not leveraging it as a strategic channel for driving sales and growth.
Back then, many B2B players simply used a third-party e-commerce software plug-in to integrate online orders with the inventory and financial management applications in their enterprise resource planning, or ERP system. This would enable online selling, but few really thought of e-commerce as a core part of their business and sales strategy. Instead, these e-commerce portals were intended to help replace customer service reps with online technology. They were often only available to known, existing customers, and their main purpose was to allow customers to place re-orders and pay for them using an already established terms account.
The Present: Today’s B2B e-commerce sites are much more focused on generating revenue and attracting new customers. There has been a rapid shift to consumer-based technology to provide B2C-like shopping experiences to B2B customers. Sellers are purchasing e-commerce platforms that were originally designed for consumer sales to service their B2B customers.
The shift is being driven by two factors. First, all buyers have become accustomed to the consumer shopping experience and expect similar treatment, even when buying for their business. Second, sellers are turning to the web to differentiate themselves from the competition, expand reach and achieve more aggressive growth rates.
The Future: Online selling is admittedly new ground for many B2B sellers. Those that have been successful have a few things in common. B2B merchants that are looking to expand business online should keep the following guidelines in mind.
- The sales web. Change your perspective of the web from a place to service customers to a place to acquire new ones. While there may be pockets of individuals in your organization who get this, it’s likely to be a cultural shift for others. B2B sellers often have legacy systems and processes that represent obstacles to change. You need to have leadership and drivers in the organization that can motivate and drive change to make an online selling strategy successful.
- Start small and start now. For many sellers, picking one product line to sell online is a great way to get started with an e-commerce strategy. Pick a product that can be well represented online and has strong fulfillment processes you can tap into. Work out the kinks on a smaller scale before expanding your e-commerce reach. These steps will help minimize risk and accelerate the educational part of selling online.
- Pick the right software. Select a native e-commerce platform, not an add-on or plug-in to an existing system. While it might be tempting to buy that little piece of software that works with your ERP system because it’s inexpensive and seems simpler to implement, the limited functionality will likely bite you in the end. You’ll regret not having a platform that gives you design flexibility, a full set of features, robust performance, and extensions to help you customize the site to fit your business. Much as you’d invest in a new sales team or physical store, you need to treat your website the same way and invest in the new channel if you want to see significant results.
- Partner with an expert. Hire an agency and use the features that you paid for. Once you find the right platform, use it! Work with a digital agency to help you do things like utilize SEO to help shoppers find your products on the web, design an intuitive site navigation, create an attractive and compelling representation of your brand, present product content in relevant ways so shoppers can make better buying decisions, and offer a quick and flexible checkout experience.
- Give customers options. Provide multiple payment options and account transparency. B2B customers are more likely to buy if they have purchase flexibility, so it’s crucial to support payments by credit cards, Paypal and customer terms accounts.. Furthermore, offer customers the ability to apply for and manage their terms accounts online, including things like checking balances, viewing purchases and payment history, and making payments online.
- Establish trust. Customer loyalty requires trust – meaning inventory is accurate and orders are delivered on time (stock-outs and back-orders are sure ways to turn off new customers). So automate order management so that when an order is placed, it is fulfilled quickly, in order to both meet the needs of the customer and to update inventory. While an online B2B approach may require some integration to tie your online presence to your back-end systems, the experience you can provide your customers will far outweigh the additional investment it will take to integrate the systems.
- Focus on content. B2C strategies can work just as well for B2B sellers, so take advantage of your new site and use inbound content marketing strategies to drive new visitors. Start a blog and write content that will attract the persona of your typical customer. Build an audience of subscribers, then nurture those relationships through your content. Trust will build until eventually they become buyers themselves.
The evolution of e-commerce no longer just applies to B2C sellers, and the B2B players that adopt this new sales strategy, will come out ahead of their competition.
Steve Weber is president and CEO of nChannel Inc., a provider of technology and services designed to help companies sell through multiple online and offline channels. He is the former vice-president of e-marketplace outsourcing services for Sterling Commerce, a division of IBM Corp. Follow him on Twitter @nChannelSteve.
Favorite