Manufacturers and distributors involved in B2B ecommerce ended 2019 anticipating that, 2020 would be another year of steady growth in ecommerce, even while trade wars and other economic factors might slow manufacturing productivity and sales in some vertical markets, according to data and analysis in the newly published 2020 B2B Ecommerce Market Report from Digital Commerce 360 B2B.
But then came the coronavirus, a full-blown global pandemic that caused a virtual shutdown of big parts of the $21.43 trillion U.S. economy, including key manufacturing sectors. COVID-19, the disease caused by the novel coronavirus, has permanently altered the direction of U.S. B2B ecommerce, say ecommerce analysts.
“The big news for 2020 and beyond is the impact of coronavirus on how commerce is conducted in B2B channels,” says Brian Beck, a managing partner of Enceiba, an agency that helps manufacturers and brands sell through Amazon.com and Amazon Business. “Homebound B2B buyers are being forced to utilize web channels to purchase, as they can no longer go to a branch or interact face-to-face with a salesperson, and digitally-enabled sales teams and customer service departments working from home are using web tools, rather than outmoded manual processes, to place orders.”
Digital sales outpacing total sales
In 2020, total electronic sales will continue to grow. And a Digital Commerce 360 B2B analysis of ecommerce data—including first-quarter economic figures from the U.S. Department of Commerce, and historical and year-to-date ecommerce numbers from big public U.S. distribution companies such as W.W. Grainger Inc., MSC Industrial Supply Co. and Watsco Inc.—shows that B2B ecommerce will also continue to grow.
But the big question remains: By how much and how fast? In the first two months of the year, total U.S. manufacturer sales grew year over year by 1.8% to $293.75 trillion from $288.57 trillion. At the same time, total U.S. distributor and wholesale sales in the first quarter dropped year over year by 4.6%, to $1.408 trillion from about $1.476 trillion.
Using that same percentage drop for the first quarter applied to 2020 suggests that total U.S. manufacturing and distributor sales could shrink by around 5% to approximately $16.57 trillion. But as total sales shrink as the economic fallout of the COVID-19 pandemic continues, there already are strong indicators that digital sales as a whole will grow in 2020 but at a slightly slower pace than in 2019.
While it may be too early to forecast full-year 2020 ecommerce growth, an analysis of the year-over-year increase for the first several months of this year in online B2B sales—including early quarterly results from public B2B sellers that break some or all of their digital sales metrics, and interviews with manufacturers, distributors and ecommerce analysts—indicates that total sales for ecommerce sites, log-in portals and marketplaces grew by around 10% to $1.43 trillion.
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.