Last year and the current 12 months are two different stories but with each leading to the same ending.
In 2019, all forms of B2B digital commerce—electronic commerce, electronic data interchange, e-procurement, B2B marketplaces and a few other related channels—grew faster than total manufacturing and distributor sales. In all, about 10 times faster, according to data and analysis in the 2020 B2B Ecommerce Market Report, a newly published research report from Digital Commerce 360 B2B.
While total manufacturing and distributor sales grew year over year by 1.5% to $17.5 trillion, B2B digital sales in all forms grew 10.9% to reach about $9 trillion.
More digital than manual sales
Growing faster still were combined sales on B2B ecommerce sites, log-in portals and marketplaces (up year over year by 18.2% to $1.3 trillion from $1.1 trillion in 2018) and e-procurement, a digital sales channel that increased nearly 18% to reach $700 million in 2019 from $600 million in 2018. All in, more sales from U.S. manufacturers and distributors, wholesalers and other B2B sellers, such as retailers that sell business goods and products online, were more digital than manual: 51.4% versus 48.6%.
As 2020 began, many U.S. manufacturers and distributors, wholesalers and other B2B sellers anticipated a slowdown in total sales due to a combination of ongoing trade wars, a slowing global economy, and other factors.
But these same companies also anticipated another robust year of growth online. And then came the global pandemic known as COVID-19. In its wake, the coronavirus shuttered large sectors of the nearly $21 trillion U.S. economy, forced nearly 40 million people—about 1 in 4 workers—onto the employment line. It also sent companies of all sizes scurrying to close or scale back operations, quickly gear up to have as many employees as possible work from home, or shift production lines to produce badly needed personal protective equipment and ventilators.
Riding the wake of COVID-19
Also in its wake, the coronavirus permanently altered the course of B2B ecommerce. In the first quarter of this year, many B2B sellers experienced growth in ecommerce sales. But as the pandemic settled in, B2B web sales began to whipsaw wildly. Big public industrial distributors such as MSC Industrial Supply Co. experienced a rise and then a fall in ecommerce sales. In fact, March was a wild ride for the multibillion-dollar distributor of industrial supplies, as sales rose “nicely” and then and then “dropped off significantly,” says MSC CEO Erik Gershwind. Fiscal second-quarter ecommerce sales were down 3.1% from a year earlier.
There also are hard-won lessons learned from the pandemic that companies of all sizes are using to seek out new online business opportunities. Many of them will build post-coronavirus technology, business, marketing and operations strategies and programs that will work more effectively and efficiently for the long haul.
But there will be the ecommerce “haves” and “have nots, says Brian Beck, a managing partner of Enceiba, an agency that helps manufacturers and brands sell through Amazon.com and Amazon Business. “This crisis is widening the digital divide among those who made earlier investments in ecommerce and those that didn’t,” he says. “Some of those that didn’t, won’t survive.”
The 2020 B2B Ecommerce Market Report is available as a downloadable PDF for $399. It’s also included in our Gold and Platinum Memberships, which provide access to all Digital Commerce 360 research reports and certain online retailer databases.
Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at [email protected] and follow him on Twitter @markbrohan.
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