The development of B2B E-commerce (Long-read)

The development of B2B E-commerce

E-commerce 360 B2B Summit

Our CEO: Gerben Nelemans and CCO: Redmer de Vries at the table with moderator, business developer and self-proclaimed B2B e-commerce layman: Willem van Kralingen, to talk about the current state of B2B commerce, the differences with B2C and the bottlenecks for further development. This conversation was recorded as part of the Watch the Vodcast below or read the blog post and discover how you can achieve online growth as a business-to-business company using practical experiences and insights from the Thesio leadership team.

First-things-first: What exactly is B2B E-commerce?

B2B E-commerce is a relatively “new” way of doing business online with other companies. For example, with the help of a business webshop, company portal or customized software application. It is the answer to the question how, as a company, you can make your sales process more efficient, easier and perhaps also a little more fun. In that sense, this is certainly not a new development but a development that is still ongoing. However, companies are increasingly knowing how to serve each other online or digitally.

Business-to-business is people and business

To a large extent, B2B sales or doing business with other companies is seen as people and businesses. Depending on your industry, business vertical or company, this may still be the only way to do business with each other. In that case, the B2B sales process roughly always follows the same steps.

The 'traditional' B2B sales process:

1. Business buyers and sellers look for potential suppliers and make physical or telephone appointments with representatives to obtain more information.
2. With a good 'click or fit', a few more meetings are then scheduled, e-mails are sent and (in some cases physical) documents are exchanged.
3. After a period of internal coordination, a final choice is made and possibly further negotiations.
4. Finally. A contract (whether printed and scanned) is signed, followed by communication to the outside world.

The goal for both parties: to make the most favorable deal possible with a reliable company that also fits its own culture.

A personal experience

In the situation described above, a personal, interpersonal experience is crucial for gaining trust and making an informed choice between available parties. Nothing wrong with that. However, with the state of the current technology (including current social issues), this way of doing business for modern B2B companies is highly outdated and (at least partly) simplifiable.

Redmer de Vries: “The beauty of the internet and modern technology is that we are increasingly able to add that personal experience to online sales. Nevertheless, B2B companies still find it difficult to go online.”

B2B E-commerce in practice

At Thesio, we notice that there is a lot of demand for new, better ones. So there are more and more companies that can and want to offer their services or products online to other companies. Nevertheless, the actual figures are still disappointing. Based on various surveys from the United States, in 2022, only 14% of companies are really actively involved in B2B E-commerce. So the vast majority of them are not yet. In practice, the development from a 'traditional' to a modern way of doing business among themselves still faces a lot of resistance.

The most common reasons not to do business online (yet):

• The desired, personal customer experience is not yet technologically feasible.
• The product or service offered is too complex to sell online.
• Doing business to business is a personal and interpersonal process.
• The company, management layer or culture is strongly traditional.

Online findability is a must

Despite these objections, there is a consensus among most companies that not being online at all is no longer possible these days. Especially in the exploratory phase, it is important for every company to be well represented online. In the subsequent phases: comparing, deciding (buying) and caring (after-sales), personal advice is often still required.

The new generation of E-commerce players

An important factor in the further development of B2B e-commerce is therefore a personal one. More and more often, the extent and form in which business is done online within B2B companies has to do with who is at the helm. The people responsible for buying and selling business services and products today are from a different generation than their predecessors.

Influence of millennials

These include the millenials who are now running the company or setting up or further developing the e-commerce branch within a company. Previously, the buyers of large business companies were naturally “older” and thus from a generation that saw B2B sales primarily as people and businesses.

Technological development

Partly linked to this, but at the same time an independent factor, involves a bit of habituation. People (young and old) and companies are increasingly used to being fully served online. Also with regard to previously relatively complex processes such as returns. Within companies, people are then increasingly used to implementing technically complex solutions and thus further developing B2B e-commerce.

B2B customers and the difference with B2C

In our opinion, the way in which a customer approaches digitization is one of the biggest differences between B2B and B2C (business-to-consumer) projects. A typical B2B customer generally tries to create a successful e-commerce solution from a complex back side (such as an existing ERP), at the front end. A B2C customer, on the other hand, starts with the question: how am I going to sell the most and what actions, techniques or systems are needed for that? In addition, they are less likely to stick to how that is simply arranged in, for example, an existing ERP.

Little innovation in standard B2B processes

A similar difference lies in the extent to which the e-commerce solution itself innovates the standard working methods or processes. Many B2B e-commerce solutions are in principle supporting tools for the sales process as it is or digital copies thereof. This includes, for example, a B2B order portal. More often than not, these are mainly used by their own sales representatives to submit orders for their customers. It is therefore less likely to say goodbye to the “old way of doing business”.

Outdated working methods stand in the way of (digital) progress

These differences sometimes make developing a successful B2B e-commerce solution extra challenging. In order to keep this on track as much as possible, in our experience, it is necessary to ensure an open and honest (sometimes difficult) conversation with the customer. Immediately at the start of the project, discuss the willingness to review existing processes and possibly say goodbye to processes that no longer work. Clearly state that some processes may need to be set up differently, but that they will be a lot easier or more efficient from a digital point of view.

Gerben Nelemans: “Make sure there is a good interaction between making a little bit of the solution what my process is, but also making my process what my solution is. This includes, for example, the limitations of the e-commerce platform with which you want to create a good B2B experience.”

Modern B2B companies

Of course, there are also customers who approach B2B e-commerce in their own way or completely differently. At the moment, however, these are mainly new companies, young companies and startups. From the first moment (sometimes as part of their proposition), these customers combine B2B e-commerce with the proven functionalities for a good B2C customer experience. B2B companies that have been doing business in the same way for a long time could occasionally learn something from this.

Trend: The B2C customer experience in B2B E-commerce

Although this is talking about a trend, B2B companies have been looking for a way to offer experiences similar to B2C companies for a long time. Experts therefore say largely the same thing as 5 years ago. In order to be and remain successful in the future, 'traditional' B2B companies must also offer an optimal consumer experience online. It is a slow, long-term trend in the global development of B2B e-commerce. Just like the number of really active B2B e-commerce companies, the customer experience in B2B is still far behind B2C.

B2C functionality within B2B

Nevertheless, both worlds are slowly coming closer together. A number of elements that you are used to within the customer journey of B2C companies are already regularly reflected in the B2B landscape:

• Ways of communication and service: including, for example, AI chatbots, whatsapp messages and extensive frequently asked questions pages for faster responses and 24/7 answers (see e.g. Oometrics).
• Search behavior and search methods: more, more detailed and transparent information including ways to find it more quickly via filters, search tools, or an online decision aid (Searchanise).
• Additional sales and customer retention: Loyalty programs for additional (free) services and products or discounts. But you can also send similar or additional items online or via (email) marketing.
• Payment methods: More convenience, more flexibility (payment terms) and more options for paying afterwards (such as Biller).

No merging of worlds

However, B2B and B2C will never become complete look-alikes. In our opinion, this is also not practical because a B2B buyer simply 'shops' in a different way than a consumer. In most cases, he is probably not sitting on the couch at night scrolling for purchases for his employer. However, we do see the aim to bring it closer together and a slight acceleration in this. In addition to taking over things that work well within B2C, things that do not work well within B2B are also often jettisoned at the same time.

Gerben Nelemans: “I find chatbots so annoying. The first thing I always type in is: employee, please.”

Acceleration due to external factors

Finally, external factors such as Covid may have had an influence on the acceleration of this trend. Barriers to starting B2B e-commerce have become lower or disappeared. For example, more companies started delivering direct-to-consumer (D2C) themselves because stores were not allowed to open. It became painfully clear to some companies why it is so important to have an online presence and also to offer a good customer experience.

The opportunities and caveats in B2B E-commerce

For almost all companies or branches, B2B e-commerce is of added value and is practically applicable. Perhaps this does not directly apply to your most complex product, but it does apply to your spare parts, for example. B2B companies are dealing with buyers who are ultimately looking for the same ordering, payment or shipping convenience that they are used to as consumers. What we are used to as consumers, we will ultimately also want for business. Companies that respond to this early see the benefits in more or more returning customers and lower costs.

The benefits of doing business digitally

A well-thought-out B2B e-commerce solution can simultaneously save costs, bring in new business and increase existing conversion. Existing customers can, for example, draw attention to other items or make the buying process faster or easier. Just like B2C, data and technology can be used to respond to buying behavior, such as with an automatic follow-up email or incentives to make a new purchase.

Rob Schalker — A Fish Named Fred: “B2B and B2C customers have different information needs. B2B customers have extra administrative actions that they need to be able to carry out easily, quickly and properly. To do so, they must be able to view old orders, retrieve invoices and packing slips, or copy current product information. If that is properly arranged digitally, it saves an enormous amount of time for a back office. But this goes far beyond what a consumer wants to know.”

Feasibility for all B2B companies

As a side note to these benefits, it's important to also know the differences and limitations. The B2C customer experience is only feasible or desirable to a certain extent for many B2B companies. B2C is simply easier to incorporate into a standard process than B2B. At the same time, B2B should sometimes adapt more to the standard process. By occasionally letting go of old processes and standard practices, more companies would see that successful B2B e-commerce is actually feasible for everyone.

Key takeaways:

1. B2B e-commerce is going to happen. Perhaps not as fast as we expect, but the worlds of B2C and B2B are slowly coming closer together.
2. There are many complex processes, customized systems and exceptions to the rules, so the further development of B2B e-commerce is slow.
3. To succeed online as a business-to-business company, you have to dare to do things differently. Say goodbye to processes that have been done the same way for years but are actually not working properly.
4. The B2C customer experience can only be applied to B2B to a certain extent. There will always be a difference between the two worlds.
5. There are good solutions available to bring every B2B company (partially) online. Anything that is not yet available as standard can be built.

BigCommerce as a B2B platform

At Thesio, we use the Open-Saas e-commerce platform BigCommerce. It offers the benefits of SaaS with the openness to build your own customized solutions for it. As a result, it lends itself extra well to B2B e-commerce because that's where you'll find all those complex underlying systems. At the same time, the platform has good B2B functionalities on board as standard and can possibly be further expanded with the B2B Edition:

• Organize accounts into customer groups.
• A different price list per customer group.
• Bulk prices for offering volume savings.
• Quotation functionality (if direct selling is not possible).
• Preparing orders for the customer (for example, for processing telephone orders).