Earlier this month, Amazon revealed their Amazon Business marketplace passed the one million customer mark since its launch in April of 2015. According to the official website, “Amazon Business provides purchasing solutions that let registered businesses and their designated users shop for business supplies on Amazon. People who have a business user account can purchase on Amazon.com on behalf of their employer.”
While Amazon has an advantage in terms of their large pool of existing B2C customers, Amazon Business’s growth can be partially attributed to the overall trend of the rising popularity of B2B e-commerce. Amazon.com currently has 250 million registered users and roughly 80 million Prime users. In June, Digital Commerce 360 revealed nearly a fifth of all business purchases were made through Amazon Business. Amazon Business’s conversion rate was just as high, with 24 percent of users having not made a purchase off of Amazon Business a year prior.
Amazon Business has been able to tap into some of the rising consumer preferences with regards to e-commerce. For instance, consumers have reported Amazon Business accounts are quickly set up and all products on the platform can be found easily, tapping into rising preferences among consumers for products to have a high ease-of-use. Because of innovations within the market and the new focus on revolutionizing the consumer experience, B2B e-commerce has and is expected to grow exponentially over the next few years. According to Forrester Research, the current value of the U.S. B2B e-commerce market is $889 billion and is on course to reach $1.18 trillion by the end of 2021.
Dirxion offers tools for businesses to capitalize on the shifting trends and growth in the e-commerce market via online catalogs services. Through differentiation of their shopping experience and engaging in the omni-channel experience, businesses can stake a stronger claim within the market. Dirxion online catalogs are versatile and optimized with HTML5 to ensure cross-platform and multi-browser performance standards are met. Dirxion online catalogs can be integrated into existing e-commerce platforms and live directly on a company’s website to ensure a seamless, optimized shopping experience for customers.
The Internet has created a new dynamic and structure for B2B businesses in which marketing teams, sales teams and e-commerce tools converge to maximize revenue. Some industry studies have painted a bleak future for sales teams, one in which they’ll be phased out entirely and replaced with automated e-commerce stores. The assumption is often backed up with data indicating a shifting consumer preference towards e-commerce. Even though Internet accessibility and overall technological adaption rates are increasing globally, e-commerce and traditional sales roles have integrated together. New studies and industry reports have now suggested B2B businesses can reinforce their existing channels while simultaneously integrating new technology such as e-commerce.
In a Forrester Research study of B2B businesses, 89 percent of businesses surveyed indicated that implementing e-commerce increased their annual revenue. The modern business world is dominated by efficiency: who can attract the most customers, who can capture new markets the fastest and who can get the highest return on their investments. E-commerce websites have allowed sales teams to become more efficient, especially within the B2B market. Sales team members save time and become more productive when an e-commerce website is available for customers to fill out their own orders through a spreadsheet ordering format.
Allowing e-commerce software to take some of the tasks that were previously completed manually by sales teams and digitize them increases productivity. Founder of B2X Partners Justin King analyzed B2B sales from Forst & Sullivan, which are expected to reach $12 trillion by 2020. “If a sales team is looking at e-commerce as a threat or as a hit to their personal income, they won’t get behind an effort like this,” says King. “Bringing them into the fold early and incorporating them into your e-commerce team early is important.”
“In most cases, a few sales reps will naturally latch onto the idea. Bringing them into the fold early and incorporating them into your e-commerce team early is important.” — Justin King, 2017
E-commerce can be used as a tool for B2B sales teams. E-commerce websites can take large amounts of data and condense them into a portable fashion, essentially allowing your sales representatives to access your entire inventory from anywhere. Dirxion online catalogs serve as both a reference tool to sales representatives and a familiar, fully-integrated e-commerce experience for customers. For instance, Dirxion customer Proface America uses spreadsheet ordering functions in their online catalogs, which allows customers to independently place orders, freeing sales representatives from having to complete the process manually. Dirxion online catalogs can also be easily updated, thanks to in-house production and development teams, ensuring all sales representatives, no matter where they are, has access to fully-updated product lines and prices. In doing so, Dirxion customers mitigate production, printing and distribution costs previously associated with constructing print catalogs.
In a recent article from Digital Commerce 360, Dirxion customer MSC Industrial was highlighted for employing new e-commerce software that recommends products to consumers based on their previous viewing and purchasing history. Large e-commerce corporations have been known to deliver similar experiences, most notably Amazon, which had recently unveiled the open source software they use to power their product recommendation system.
The software also relies on MSC’s email campaigns, displaying what products and promotional offers consumers have responded to and interacted with in the past. It integrates with other customer relationship management software to base product recommendations off of customer account activity and product life cycles.
Overwhelmingly, consumers have shown an increased preference for a personalized e-commerce experience. According to Accenture, 75 percent of consumers would be more likely to buy from a retailer that either knows their purchase history, recommends options based on past purchases or recognizes them by name. Certain levels of individualization translates to brand loyalty, as brand relationships are often driven by emotion. Consumers who interact with a personalized shopping experience have also been more likely to recommend it to their peers; 77 percent of consumers have chosen, recommended or paid more for a brand that provides a personalized service or experience, according to research from Forrester.
The company’s investment in e-commerce has benefited them even in the short run. As reported in a separate article by Digital Commerce 360,e-commerce sales increased by 6.4 percent and now accounts for nearly 60 percent of their total net sales. MSC, No. 74 on the B2B E-Commerce 300 list, has continuously invested in new ways to implement e-commerce within their business to remain an Internet powerhouse.
MSC implemented Dirxion’s online catalog directly within their website. “The Big Book,” MSC’s annual catalog, can be opened and closed from wherever within their website using a tab on the left-hand side of their webpages. Dirxion’s online catalogs are optimized with HTLM5 and are supported by a multitude of proxy servers to assure fast loading times, in spite of large databases from which to pull information. Dirxion’s commitment to industry revolution gives MSC Industrial and hundreds of other B2B businesses the tools to meet consumer needs and remain leaders within their market.
Global B2B e-commerce has already outgrown B2C, with the B2B e-commerce market expected to reach $1.1 trillion in value in 2019 as compared to B2C ($480 billion), according to Forrester. B2B e-commerce on the global scale remains in its infancy, despite the market having some sort of B2B e-commerce for the past two decades. At one point in the late 90s, Gartner estimated B2B e-commerce would reach $7.2 trillion by 2004.
The majority of the business world is now online, but technology adoption has moved at a slower-than-average pace within the B2B e-commerce sector. The technology and systems of the average B2B business fell below rising standards set by larger B2B corporations who could afford to invest in e-commerce technology. According to a 2015 survey conducted by eMarketer, 55 percent of B2B corporations in the “Leader” category of technology adoption considered e-commerce investment critically important for sales.
“We are still fairly early in the maturity. It’s started to accelerate, but adoption has been a little slow. In the next five years, we’ll probably see a significant amount of growth in B2B ecommerce. —Brian Walker, SAP Hybris
The Chinese market for B2B e-commerce has grown at an increasingly rapid rate, netting $2.3 trillion in e-commerce sales in 2015, 80 percent of that being exclusively from B2B sales, according to Cross-border eCommerce. Compared to the U.S.’s B2B e-commerce value, China’s will reach $2.1 trillion by 2020 with companies such as Alibaba (valued at $264 billion) bolstering China’s exports.
Dirxion online catalogs give B2B businesses an opportunity to tap into the developing global e-commerce market. Businesses that fail to include and accommodate for an international market essentially choose to leave sales on the table. Business Wire forecasts English-language exclusive sites will account for only 33 percent of online global purchasing in 2020. Dirxion online catalogs can support a variety of languages or multiple languages at once. For instance, Dirxion customer Kennametal has a language toggle feature on their online catalogs to support languages such as French and Japanese.
Recently, CEO of W.W. Grainger D.G. Macpherson, one of the largest B2B companies in the U.S., predicted 80 percent of their sales will occur through online channels by 2020, according to Industrial Distribution. E-commerce as a whole has grown for the company, accounting for 41 percent of their total sales in 2015 and 60 percent in 2016.
We’re still focused on the online model. It’s a strong source of profitable revenue growth. We expect that to grow 20 percent this year and grow profit even more off of that. — D.G. Macpherson, CEO of W.W. Grainger
B2B businesses have benefited greatly from the market’s transition into e-commerce. Forrester Research analyst Andy Hoar conducted a report that predicted U.S. B2B e-commerce will generate $1.18 trillion in revenue by 2021. The Internet has eliminated sales barriers as well. Though this means your direct competition no longer has to be close to you, it opens the door for new sales in markets that were previously not accessible. The B2B buying market has evolved to conform to the shopping habits of its dominant buyer, millennials. According to Think With Google,in 2014 nearly half of B2B researchers, those making B2B buying decisions, were millennials. Compared to other generations, millennials grew up in the digital age and are digital natives, taking their online preferences with them when they moved into the workforce.
E-commerce has changed how consumers interact with B2B products. E-commerce websites for B2B businesses allow products to be sorted and easily filed into a searchable format. Consumers react positively to well-designed websites and will often abandon a company if they feel their online presence is subpar compared with a competitor.Mobile e-commerce has seen a boost in recent years, meaning B2B businesses can profit from consumers being able to access their e-commerce site on a smartphone or tablet.
Dirxion online catalogs give B2B businesses another avenue in a multi-channel marketing approach and allows them to capitalize on the rise of the B2B e-commerce market. For B2B businesses with many catalogs spanning multiple departments of their company, Dirxion’s bookshelf feature organizes the individual catalogs on a central landing page and integrates cross-catalog searching. Existing e-commerce platforms can be integrated into the catalog or B2B businesses can employ the Dirxion order form feature to generate a request for a quote.
The B2B e-commerce market is estimated to be worth roughly $1.1 trillion by 2021, according to predictions from Forrester Research. The market is at an inflection point, driven by the changing preferences of the B2B customer. According to the same Forrester study, 74 percent of B2B buyers research half or more of their work purchases online before buying. The number of customers who make half or more of their work purchases online is expected to increase 26 percent in 2017. It’s also seen as more convenient to purchase online — 93 percent of B2B buyers prefer to buy online when they’ve decided what to buy.
According to “think with Google,” the way B2B customers conduct research has changed as well. Purchase rates of B2B customers on mobile devices has raised 22 percent in the past two years. Online shoppers in general have become accustomed to their preferred e-commerce websites providing a multi-channel approach. B2B e-commerce empowers buyers by giving them the convenience of researching and purchasing from anywhere 24/7. The internet has changed not only how consumers buy products but how they research them and interact with brands.
Businesses can cut costs by shifting their B2B business more into the e-commerce realm. According to Forrester, Coca-Cola reduced their average cost-per-interaction by 85 percent by moving offline B2B customers online. Thanks to the Internet, consumers now have more information and options for purchasing than ever. Online catalogs provide a new purchasing platform for consumers, either integrating with an existing e-commerce platform or providing an order form that’s then sent to the company’s sales team upon completion.
As reported by Digital Commerce 360, MSC Industrial attended the Internet Retailer Conference & Exhibition June 6-9. Senior Director of E-Commerce Mike Roth discussed the company’s balance between investing in the digital shopping experience while still retaining a personal customer service experience. The article points out MSC’s high ranking (72/300) on the 2017 B2B e-commerce 300, a list of high-profile B2B companies that represent 72 percent of B2B e-commerce sales in the U.S.
Steve Baruch, senior vice president, chief strategy and marketing officer, also spoke at the presentation. He highlighted the positive relationship between digital and customer experience and how when digital presence rises customer support has to follow. He and Roth then go on to describe the three ways a B2B business can successfully combine e-commerce and customer service.
1. Know your audience. According to the article, MSC has applied a variety of digitally-driven marketing research to supply their sales teams with information valuable in making personal connections with their customers. By examining certain customer habits, MSC gained valuable information about their customer’s buying behaviors. Such data opens news doors for MSC’s sales team.
2. Listen and respond. By gathering and evaluating customer feedback from a multitude of avenues, MSC has been able to evolve their customer interaction methods. For instance, after analyzing feedback data, the company realized customers wanted their shipping data in real time and changed their website to include shipment tracking. The company adjusted to the changing needs of their customers.
3. Build loyalty by winning your customer’s trust. MSC knows the preferred communication and ordering methods of a business can vary. Baruch mentioned, for instance, that some small customers prefer to work through the website for communication, order management and inventory control but prefer to speak to a dedicated customer care team for real help. MSC also pushes to promote their customer care phone number as a way of balancing online presence and personal care.
Dirxion provides MSC with new ways to meet the growing e-commerce needs of their customers through Dirxion’s online catalogs. MSC’s Big Book is embedded within their website and can be accessed from anywhere without having to leave the site. This allows customers to work within their preferred methods of ordering. Other Dirxion features, such as Google Analytics support, allows MSC to know what products their customers are interested in and interact with the most. Dirxion’s customization capabilities keeps the catalog on-brand, an aspect of building brand loyalty and earning customer trust.