5 Min Read |
An increasing number of B2B companies are focusing on online sales. But the success of B2C e-commerce far outruns that of B2B. We look closely at the gap between B2B and B2C, and consider why B2B is falling behind — before considering how it could do better.
The Gap Between B2B and B2C
E-commerce solutions company Sana, commissioned Sapio Research to
create a B2B Buying Process 2019 report. It surveyed 560 buyers
who make purchases from manufacturers, wholesalers and distributors, asking
detailed questions about the role and demand of e-commerce in B2B buying
The report found that B2B buyers now purchase an average of 75%
of products online; but fewer than a fifth of buyers purchase 90% or more of
their products online, despite the survey responses showing that 30% would
prefer to do so. Why? Because vendors are failing to meet their B2B customers’
A key issue that buyers face is that the companies they’re buying from often require purchases to be made via email. This does work on a basic functional level, with the buyer communicating directly with a contact at the manufacturer, wholesaler or distributing company. But email does not offer the potential for automated buying and, for a busy buyer or buying team, it is not an efficient purchasing channel. Compare it to the B2C market, and it’s clear that very few B2C customers today are asked to make purchases by email. Online retail sites are easy to use, offering quick purchases, automated returns, and terms and conditions built in to the buying process.
A number of companies are recognising the changing landscape and adjusting their business model to suit. Eideal, distributes salon professional products in the United Arab Emirates. It sells a range of products in the categories of hair care, hair color, styling, tools and accessories. The company also provides education services, such as in-store demonstrations, in-salon trainings, regional classes, and large-scale stage presentations at industry shows; and business-building support services. The company not only distributes through traditional channels but also through it’s e-commerce platform.
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Globally, 41% of buyers in the Sana report identified email as their most important buying channel. A significantly smaller 28% said e-commerce was their most important buying channel, while 25% said that the majority of their B2B purchases were made over the phone.
These numbers are surprising in 2019 — email and phone certainly
don’t win out over e-commerce platforms in the B2C market. Why has e-commerce
not taken control of the B2B buyers market?
Today, it almost goes without saying that positive customer
experience is crucial for B2C companies. There is enormous focus on making
purchasing an efficient and feel-good experience for customers. However, B2B
businesses are failing to provide the right customer experience on their
e-commerce stores. An optimized buying experience is even more important when
you consider that every B2B e-commerce buyer is also undoubtedly a B2C e-commerce
buyer on a personal level — so they know what a good e-commerce platform looks
and feels like.
Born in 2008, Morphe Brushes was created by artists for artists. Originally a makeup brush company, Morphe grew to create makeup for eyes, lips, and face. With over 5.5 million followers on Instagram and a loyal YouTube audience, Morphe’s popularity — and profitability — continues to be based on the community of men and women who endorse and champion their products. In keeping with that community focus, Morphe operates on a multi-channel ecommerce platform both offsite and on.
Morphe features a shoppable Instagram feed on their homepage, includes user-generated content on their product pages, and follows a Pinterest-inspired layout on their #Morphe page. Leveraging the power of influencers and their loyal customers they use social proof as a means driving awareness and raising their brand profile.
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Morphe goes beyond the typical loyalty program and offers “Pro Memberships” to beauty industry professionals: certificate holders, students, and self-taught professional artists. These paid memberships are an example of how Morphe connects with and serves its audience.
A quarter of B2B buyers reported that they “want easier and
faster checkout, easy repeat ordering, quicker delivery and improved tracking.”
These simple demands are very basic in the B2C experience but appear to be
largely neglected in B2B e-commerce.
Of course, B2C and B2B buyers do have different requirements, and
the ideal automated system for a B2B customer would have more complex needs
than an ideal system for a B2C customer. B2B vendors have to offer different
pricing tiers and there is often negotiation involved in each sale; with
long-term relationships between buyer and vendor which have an impact on cost
and expectations. Payment terms and other contract elements also vary between
customers — and it is difficult to create and maintain an e-commerce system
that can handle all of that.
This is reflected in the finding that 44% of B2B buyers
experience online order errors with their top 10 vendors at least once a
fortnight. Those errors commonly include incorrect product selection, purchase
entry and pricing. It is certainly possible to develop and customize e-commerce
software to eliminate those errors; but such a complex system is expensive, and
requires ongoing maintenance which can also incur significant cost. For a small
or medium sized B2B business, those costs may be impossible to cover.
Nonetheless, it is clear that if vendors do not focus their
efforts and funds on creating and sustaining e-commerce platforms with good
customer experience ratings, they could be in trouble. It is likely that B2B
companies that do not offer such services will increasingly lose out to
companies that do. More than a third of buyers in the Sana report said that they
could be convinced to purchase from a vendor if the functionality was available
to place, pay for, track and return orders online.
That 30% of buyers who do not currently place their orders
online, but who would like to, is an important indicator of the changing market
demands. There is an opportunity here for B2B vendors to grow their businesses
simply by investing in their e-commerce services. Those that develop an
excellent customer experience for their clients will begin to win out over
those who stick with old-fashioned email and phone sales systems.
The evidence suggests it is unwise for B2B companies to remain stuck in their ways. A quarter of buyers indicated that online automation will change the B2B buying role itself in the next five years. The influence of the B2C e-commerce experience on the expectations and needs of B2B customers is clear; and as more B2B vendors take note, those that don’t will start to lose business.
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The post Why Can’t B2B Businesses Keep Up With B2C E-Commerce? appeared first on Beauty Business Journal | The Business of Beauty.