B2B E-commerce
Real ROI and Why the Time for E-Com is Now
Here’s What B2B Brands Need To Know About E-Commerce
E-Commerce with Coffee?! guest Brian Beck comes onto the podcast to talk about B2B shifts in e-commerce. With so much attention on consumer expectations and direct-to-consumer (D2C) sales models, B2B has been lost in the shuffle.
The shifts in B2B are arguably even more influential, however, and Brian spells out why.
Brain got his start in e-commerce back in the 1990s. In the podcast, he recalls with a certain nostalgia his first job with a computer, but without an internet connection. He was on the ground level of major initiatives by AT&T to “figure out this e-commerce thing” with walled internet gardens.
That’s when Brian became hooked on e-commerce.
Fast-forward 20 years and Brian is an E-Commerce Expert advisor and the author of the book Billion Dollar B2B Ecommerce. The linchpin for him to write this 400-page tome was when he made the shift from B2C to B2B five years ago.
That was when he discovered that the B2B world was where B2C had been 15 years ago.
The opportunities Brian saw for B2B brands were so colossal that he spent the next two years researching and writing his book. A total of 35 case studies are featured across the 12 chapters, because when applied, Brian’s B2B strategies have been worth hundreds of millions of dollars for brands.
The Convergence of B2B and B2C
Consumer expectations have shifted in a huge way in the last five years with an unprecedented acceleration during the pandemic.
It is, Brian says, unsurprising that B2B brands have been slower to adopt the flashy technologies and channels associated with the consumer market today, such as augmented-reality shopping experiences, instant customer service across multiple channels, and social selling.
“This is a novel concept for some B2B businesses,” Brian jests, “product images for your products!”
Those same buyers on the consumer end, however, are now starting to expect the same experiences when buying online for work.
The first steps Brian takes with the B2B brands he consults has been to bring them “up to speed” with the same optimizations present today in the B2C world, like syncing up their ERP to their selling channels.
When B2B brands simply catch up to the basic optimizations present in B2C, the ROI is incredible.
What’s Unique to B2B?
There are unique considerations to the B2B buyer experience, too.
For one, B2B often extends credit terms like paying over six or nine months. This is done because B2B transactions are considered easier to collect, and because the purchases frequently climb over tens of thousands of dollars.
Pricing versions are also a consideration unique to B2B. Some buyer-seller contracts have clauses that dictate cost, and any B2B brand in e-commerce will need to consider the best ways to manage and display that disparate product data.
KPIs for B2B
One of the most important parts of calculating the ROI for B2B brands entering e-commerce is knowing what KPIs to focus on.
The most common KPI in consumer-facing e-commerce is conversion rate, or the percent of people who buy after visiting a product page. A conversion rate of 3–4% in B2C is considered spectacular.
In the B2B world, there’s a higher intention to purchase by the time a buyer visits a product page, which drastically changes the target conversion rate.
“10, 15, 20, 30% conversion rates aren’t uncommon in B2B,” says Brian. The metric is the same, but the measure is different.
B2B buyers also tend to buy more (in both quantity and frequency).
Therefore, the most important KPI for B2B is the share of wallet.
To increase your brand’s share of wallet with B2B customers, focus on making the buyer’s job easier. Even price differentials don’t have the same weight of making someone’s job feel less like work.
Getting in front of the buyer at the right time is a key to securing a bigger share of wallet.
Channel Conflict
Another big conversation in B2B today is around channel conflict.
Channel conflict happens when brands also want to sell B2C, and then channel partners have to compete against one another or against a vendor’s internal sales department. If the end product is yours, you don’t want to compete with yourself.
“Too often I hear manufacturers using ‘channel conflict’ as a reason not to engage [in e-commerce],” Brian says, “and… that’s a losing strategy.”
Brian recommends facing the “brutal reality of the situation” head-on. Confronting changing channels is how brands stay competitive, otherwise, they will quickly lose relevance with buyers. Shifts are happening at the market and industry levels, and channel conflict is the inevitable result.
Ultimately, brands and manufacturers “have to get closer to the end consumer,” Brian adds. “Maybe you’re not selling all the same products to the end consumer, but channel conflict isn’t an excuse.”
Brian explains how, otherwise, your current distributors could go away or change their structure, and your brand would be in “a world of hurt.”
E-Commerce in a Post-Covid World
If COVID-19 taught us anything, it’s that we can adapt. The importance of digital has been elevated in a big way.
“In the first three months of the pandemic,” Brian recalls, “we saw 10 years of growth in e-commerce.”
The pandemic forced consumers out of their old habits, including B2B buyers forced to form new buying relationships and internal processes. “We accelerated B2B adoption faster than B2C adoption,” Brian notes.
The buyers and suppliers forming new relationships essentially hit the “reset” button on brand loyalty, because at the end of the day buyers needed to favor the brands that made their online buying experience as easy as possible.
B2B businesses optimizing their online buyer journey has “become existential. If you don’t do this, your customers are going away.” Brian talks about how the pandemic woke the B2B industry up.
There is a huge ROI if you play it right, too. Perhaps you do feel “bullied” into joining e-commerce, but it comes with proven dividends, namely:
- Incremental revenue with greater purchases from existing customers while attracting new customers
- Improvements in margins with smarter process (and due to the B2B sector favoring convenience over price)
- New organizational efficiencies where people can even be repurposed to new roles
Amazon in B2B
Amazon has clearly made its mark in B2C commerce. Is it as pervasive in B2B, though?
Brian gives several in-depth answers to questions about Amazon over the course of this interview. Yes, he assures us, Amazon has already arrived as a B2B distributor. Brands need to decide what role Amazon will play in their online strategy as a result.
“Amazon Business is the fastest-growing part of Amazon. Period.”
There’s a lot of momentum that Amazon Business has across categories. It’s not all notepads and pocket protectors. In total, Amazon has at least four times the breadth of products of many leading B2B distributors. It’s also five times the size of Granger.
The next question Brian answers is, how should a B2B brand engage with Amazon?
Brands need to regain control over their presence on Amazon, for one. About 70% of brands selling on Amazon say they don’t know all the sellers who are promoting their products, and that kind of confusion will be detrimental to omnichannel branding.
One of the biggest shifts happening as a result is B2B brands moving from Vendor Central (“1P”) to Seller Central (“3P”). It’s true, this isn’t quite as comfortable for brands, and requires more work. Brian dives deep into why it’s worth it and how it’s a key to tapping bigger ROI.
There’s plenty more that Brian covers in this episode of E-Commerce with Coffee?! Listen in to get more insights into the B2B world and the changes that are taking place. Brian gets into some case studies from his book, too, and leaves you with specific, actionable advice.
Don’t miss out! Listen to the full episode on Apple Podcasts, Spotify, or wherever you get your podcasts.
