Business-to-business (B2B) is a commercial transaction that is conducted between businesses, as opposed to B2C which is a transaction between a company and its customers. B2B transactions might take place between, say, a manufacturer and a wholesaler, or a wholesaler and a retailer.
Multiple B2B transactions take place in a supply chain where a manufacturer might buy raw material or components that can be used in the manufacturing process. The end-result is the finished product. Much of the purchase process occurs through electronic data interchange (EDI) currently. EDI is well suited for large, recurring orders. B2B eCommerce can also include electronic products such as websites as well as software to increase business efficiencies.
Learning from B2C
Spurred by the success of eCommerce in the B2C space, many organizations are gradually moving to the Internet and applying some principles and practices from that sphere to that of their supplier or wholesaler and retailer relationships. In 2019, global B2B eCommerce gross merchandise volume (GMV) amounted to 12.2 trillion U.S. dollars, up from approximately 5.83 trillion U.S. dollars in 20131.
Just as an eCommerce shop uses the power of the Internet to allow people to find out more about the company’s products or services and purchase them, online product or supply exchange sites allow other businesses to find out about the products and initiate procurement via an interface. B2B eCommerce sites also allow for more information, images and product descriptions that allow for cross-sell and upsell opportunities.
B2B vs B2C
While B2C involves more impulse buying, B2B solutions purchasing is more thoughtful and planned. B2B relationships are long-term and ongoing and purchases are usually recurring, and for this, the customers expect reliable deliveries along with attractive and dynamic prices and terms.
It is no wonder then that B2B purchasing has become even more complex with more stakeholders involved and deliberating in the purchase process2. These developments have become imperative to make the process itself easier. A smooth customer experience is paramount, even in a seemingly standardized B2B purchase journey3.
B2B eCommerce Marketplaces
Leveraging an eCommerce platform, companies can set up marketplaces and online directories specializing in certain industries or products that facilitate B2B transactions. Besides Amazon Business which uses very similar principles to its B2C business, some of the most well-known B2B marketplaces include:
- Horizontal marketplaces: An early pioneer of a horizontal B2B marketplace was Alibaba. Launched in Guangzhou by Jack Ma in 1998, Alibaba filled a need – to connect Chinese small and medium-sized businesses and wholesalers with clients overseas. Like Amazon, it charged a subscription to sellers who wanted to customize their shop. Unlike Amazon which leveraged its logistics network, Alibaba remains a platform player. Similar generalist marketplaces such as ThomasNet in the US and Tradenet India also exist. The other elephant in the room is Amazon Business. Like Alibaba, an Amazon Business account is a one-stop shop that enables a company which purchases corporate items and supplies to save costs and makes the process efficient. Amazon Business is set to top US$31 billion in revenue and US$52 billion in gross merchandise volume by 2023, including sales by third-party sellers on the marketplace, according to RBC Capital Markets4.
- Vertical marketplaces: Vertical marketplaces have been around in industries such as automotive and healthcare for a couple of decades but new ones such as Makers Row for fashion, GoDirect Trade in aerospace, CheMondis in chemicals, FastMetals in iron and steel, and Farmers Business Network in agriculture are proliferating. Today, there are more than 70 B2B marketplaces in more than 13 diverse industries, according to research compiled by Digital Commerce 360 B2B5.
- Service marketplaces: Service marketplaces such as Upwork (for freelancers) and Fiverr (micro-services), where the buying process is different from that of physical goods. One does not choose a supplier or offer but instead sends a request for quotation through the system, and receive offers from all the service providers. Buyers generally can’t browse seller profiles.
B2B eCommerce Trends
- Mobile: Mobile transactions for B2B eCommerce are becoming increasingly popular as more millennials drive the purchasing process. Given the 90% increase in B2B executives using mobile devices to research business purchases, mobile sites are now an essential business tool6. Mobile B2B eCommerce requires dynamic pricing and stock indications as well as real-time discount calculation.
- Personalization, user personas and user journeys: According to Salesforce, almost 75% of business buyers expect vendors to personalize engagements to their needs and 8 in 10 say that the experience is as important as the products and services themselves7. These are high-level decision-makers with complex priorities and speaking to them about their pain-points, roles, goals, and objectives cuts through the noise.
- AI-driven features: Tools powered by machine learning such as search enable the customer to find what they are looking for faster, with features like auto-suggestions, as well as fuzzy, partial and faceted searches, only added to the utility of the site.
- Content marketing: The General Electric (GE) B2B experience is held as the gold standard of how to communicate with customers in a B2B environment. Using innovative videos, blogs, user-generated content and collaborations with influencers, GE uses content marketing to demystify its business products and build its brand8.
B2B at BORN
For a North American machine tool manufacturer, BORN implemented a sophisticated solution whereby when a part of a client’s machine goes down, an automated email is sent and the unit is reordered and replaced. This was a vast improvement from the previous system that consisted of multiple steps executed manually.
In another use case, BORN developed an innovative and efficient eCommerce and service experience for client Nestlé Starbucks and its Starbucks Branded Solutions by delivering a best-practice, extensible, global eCommerce framework leveraging an enterprise-grade platform and other key systems to amplify the growth of the online channel.
Over the years, BORN has worked with leading enterprise eCommerce platforms with a focus on B2B commerce, as well as associated applications such as order (OMS), content (CMS) and product management systems (PIM). Powering many of BORN’s solutions are B2B accelerators such as the first-ever SAP-certified accelerator for SAP Commerce Cloud, Eagle. Eagle is our eCommerce framework built exclusively by BORN for SAP Commerce Cloud (B2B, B2C & Custom C2C). In addition, Bulldog is BORN’s Adobe Commerce accelerator which includes pre-built extensions, B2B custom UX & UI features, and special B2B enhancements to essential functionalities.
For more information surrounding BORN’s B2B offerings and case studies, please visit here.
1. Global B2B e-commerce gross merchandise volume (GMV) 2013-2019, Statista, https://www.statista.com/statistics/705606/global-b2b-e-commerce-gmv/
2. The New Sales Imperative, Harvard Business Review, March-April 2017, https://hbr.org/2017/03/the-new-sales-imperative
3. New B2B Buying Journey & its Implication for Sales, Gartner, https://www.gartner.com/en/sales/insights/b2b-buying-journey
4. There’s a unit inside Amazon that will be a $31 billion business in four years, RBC says, CNBC, https://www.cnbc.com/2019/12/06/amazon-business-a-b2b-unit-to-reach-31-billion-revenue-by-2023-rbc.html
5. Why marketplaces occupy center stage in B2B ecommerce, DigitalCommerce360, https://www.digitalcommerce360.com/2020/03/05/why-marketplaces-occupy-center-stage-in-b2b-ecommerce/
6. The Changing Face of B2B Marketing, ThinkwithGoogle.com, https://www.thinkwithgoogle.com/consumer-insights/consumer-trends/the-changing-face-b2b-marketing/
7. Young Buyers Are Driving B2B Expectations of B2C-Like Experiences, Marketingcharts.com, https://www.marketingcharts.com/industries/business-to-business-83757
8. GE Raises the Bar for B2B Content Marketing, enveritasgroup.com, https://enveritasgroup.com/campfire/ge-raises-the-bar-for-b2b-content-marketing/