New year, new you, right? The same way we might make personal resolutions to improve ourselves, so do B2B ecommerce businesses need to take a look at what they’ve done and what’s on the horizon that they can leverage. After all, if you are not evolving, you are putting your business at risk. At least that’s the way I think about it, and so do some of the folks I admire that have built very large ecommerce businesses (shout out to Mr. Bezos!)
Consider this: Millennials are projected to be 75 percent of the global workforce by 2025. Gen Z, or those born after 1996, already makes up an estimated 24 percent of the workforce. These people are all digital natives, and they expect a digital experience in everything they do. You’re fooling yourself if you think this new uber-majority of the workforce will pick up the phone, send you a fax, or even compose an email to place an order. The digital natives are taking over, and quickly. Are you aware this is happening?
If 2019 was the year of the B2B buyer, as I called out in my January 2019 ecommerce predictions, 2020 needs to be the year of enlightenment for B2B ecommerce firms. Trends are only speeding up, and the longer companies wait to put digital at the center of everything, the more likely these businesses will not be able to compete with those that are digitally transforming themselves.
To that end, here are five trends and predictions to consider as you plot your digital roadmap for 2020 (and beyond).
1—Amazon Business will continue to become the distributor of the future.
Amazon, with its massive war chest and culture of innovation, continues to build the master distributor of the future. They move more products around the world via ecommerce than just about anyone else (OK, Alibaba… you give them a run for their money, but just in Asia). I spent a lot of time last year with the Amazon teams in Seattle, and I’ve been impressed with how they continue to relentlessly focus on the customer experience. They don’t just talk the talk, they actually do it. As a result, Amazon Business is now the fastest-growing part of Amazon’s retail division, and the unit will likely hit $52 billion in sales by 2023, according to RBC Capital Markets. You will have a hard time finding a larger distributor.
For manufacturers, this is an evolution of the distribution model, and they need to get on-board. For distributors (even the biggest of the big), this is a wakeup call to better meet their customers’ needs. The bar is going up, and you can’t rest on your laurels.
2—Niche marketplaces will continue to emerge.
Despite the massive growth of Amazon, there are still some industries that they haven’t been able to effectively reach (at least not yet). This leaves room for the growth of niche marketplaces. These are industry-specific, fueled by the knowledge that’s developed by players who have been in these categories for a long time. Translating traditional B2B workflows to digital channels in some of these industries can be truly complex and require very unique online experiences that must be tailored to that industry.
A few examples of this include Honeywell’s marketplace, which allows aerospace industry players to purchase jet engines (and other related products) online. Another great example is Chamfr.com, a marketplace for medical products and components. Both of these marketplaces provide very specific and difficult-to-source products and are designed to make the traditional buying process in their respective industries much easier and more transparent. In 2020, niche marketplaces will compete with traditional selling channels while also providing new opportunities for manufacturers.
3—B2B will adopt more proven B2C models, methods, and tactics.
Forward-thinking and -acting B2B sellers will continue to meet their customers’ needs digitally by adopting proven B2C business models, methods and tactics. We’re going to see more sellers develop seamless customer experiences, implementing approaches that have proven successful in B2C. For example, we’ll see more B2B firms develop drop-shipping relationships with manufacturers, where orders are placed on a seller’s website, but the supplier (usually the manufacturer) ships items directly to the B2B buyer. This is a tactic that major B2C retailers such as Home Depot, Staples, Dick’s Sporting Goods and many others have engaged in for almost two decades, and it’s a great way to add assortment to a website without having to purchase and manage stock. It is a proven way to grow ecommerce revenue in a capital-efficient manner.
Many B2B distributors are getting in the game with this tactic, including market leaders like Grainger and their Zoro division, and their competitors like MSC Industrial Supply. Implementing this approach is becoming easier for B2B firms. Traditional B2C solution providers like CommerceHub, are enabling their solutions for B2B and allowing distributors to cost-effectively deploy this functionality. With ecommerce becoming table stakes for B2B businesses, we’ll see firms using proven B2C methods to gain an advantage over their competition.
4—The digital gap will widen – the “have’s” will win more market share, and the “have nots” will fall further behind.
New digital technologies are regularly introduced in the marketplace, and this year we’ll likely see the gap widen between those firms that have invested in ecommerce and those that haven’t. In Billion Dollar B2B Ecommerce (my soon to be released book), I lay out the stages of digital maturity. The first three stages are really table stakes and basic customer expectations at this point. Stages 4 and 5 are what I call the “Digitally Transformed Enterprise,” and where you need to be as a B2B firm operating in the modern digital economy. Stage-4 companies have all of the foundational elements of ecommerce in place and are working to deepen customer connections across all selling channels (such as digitally enabling the salesforce, leveraging personalization, and enabling advanced site search). Get to Stage 4 in 2020 and you will continue to succeed. If you are at an earlier stage, you are risking your relevance to your customer.
5—More tools and resources will become available to enable your Digital Transformation.
Regardless of your stage on the digital maturity curve, there is an increasing number of tools and resources to help you close the gap and leapfrog competitors. Over the past year, new players focused on B2B have emerged. Take Znode, for example. This is an ecommerce platform that offers highly distributed multi-site implementations with complex catalogs. A great fit for many B2B implementations. Another is GenAlpha, a technology solution designed for manufacturers of complex equipment that has lived in the commercial vehicle space for a number of years, and is now expanding into other markets.
Another example is Liferay, a leader in the enterprise portal solutions category this is now enabling ecommerce by providing a unified digital experience. Elastic Path has taken a leading role in the merging headless commerce solutions category, providing a flexible approach to enabling commerce at every B2B touch point (web, mobile devices, equipment, and on and on).
These are just a smattering of firms that are out there to help you transform your business. The point is that no matter what industry category you are in, there are more tools and resources available to you than ever. And more will emerge in 2020. You are no longer handcuffed by having to build systems internally or by a limited number of very expensive enterprise software suites. There are options, and you need to be taking advantage of them.
Of course, none of these trends really matter. That is, they don’t matter if you don’t have leadership that is willing to take the steps necessary to take action and embrace digital as a key component of the future of your company. In a rather startling study conducted by Digital Commerce 360 B2B last year, the publication found that the top reason B2B sellers aren’t investing in digital is a lack of executive buy-in. This is an indictment of leadership. This doesn’t have to be your company, but the market forces are conspiring against those that don’t act.
And those that don’t act are risking everything. Don’t be one of these companies. Seize your digital opportunity in 2020!
Brian Beck, an ecommerce expert, advisor and author, is managing partner of Enceiba, an agency that helps manufacturers and brands sell through Amazon.com and Amazon Business. Follow him on LinkedIn.Favorite