The online shopping experience has never been better, thanks in large part to Amazon. The company’s unparalleled focus on delivering first-class customer experience has given consumers greater expectations in terms of service, delivery, choice and price transparency.
Further, Amazon would not have been able to achieve such tremendous results without launching its online marketplace, providing increased product choice, competitive prices and superior customer experience, without the restraints of inventory and logistics. Today many other click-and-mortar retailers have followed suit and launched their own online marketplaces in an effort to strengthen their position and reinforce their omnichannel offering.
As seen with the phenomenal success of Alibaba, this trend is also a major threat to B2B firms. Whether they are distributors or manufacturers of their own products, the rise of e-commerce and the service provided by many of the pure-players in the sector is having profound impact on their business. B2B buyers, procurement managers and indeed anyone responsible for purchasing equipment or services in businesses has had their expectations changed forever by B2C e-commerce. They now expect a more customized omnichannel purchasing experience with an equivalent level of choice, price transparency and service. Online marketplaces can definitely help address this.
Many distributors keen to capture a share of the B2B market are now adopting this new model. Staples, one of the leading distributors of office supplies, has made its marketplace, launched in 2014, a key focus of its ecommerce strategy.
In addition to the generalists, we are witnessing specialized marketplaces that seek to position themselves as ‘one stop shops’ for clearly identified markets. Indeed, marketplaces are a particularly suitable sales model for niche or vertical business areas as they allow for extremely broad and deep product ranges to be offered, as well as bring together significant communities of buyers and vendors. Compared to generalist marketplaces, vertical marketplaces offer a shopping experience that sticks to sector specific codes.
How can this new model work in a B2B setting? What are the main issues facing B2B companies to successfully embrace the marketplace revolution?
B2B Ecommerce is Adapting to New Expectations
B2B buyers are changing the rules of the game by conducting their research and purchasing online. According to Forrester, all of the B2B distributors surveyed agreed that their main growth driver lay in online sales, and nearly 50% of companies with an Internet storefront estimated that more than half of their client portfolio would fully or partly migrate to the Web channel over the next three years. This movement is expected to accelerate with the arrival of a new generation of procurement professionals already well versed in e-commerce. As well, traditional “customer service” method has now been replaced by the relevance of algorithm results and search engine recommendations, as well as exhaustive product sheet content.
Surveys of procurement professionals all confirm that B2B purchasing behavior is changing to become more and more like that of B2C purchasing. In fact, 49% of major B2B buyers surveyed by Accenture prefer to use B2C websites to make their purchases, and 52% plan to carry out more than half their purchases on e-commerce pure-player platforms in the next three years. Expectations concerning the smoothness and simplicity of purchasing processes are so high that 56% of buyers said they would pay up to 30% more to benefit from a better online experience.
Marketplace Can Help B2B Distributors Adapt to New Requirements
Faced with these new requirements, distributors have invested heavily in maximizing the online experience and aligning themselves with the best practices of B2C. No surprise, Amazon has become the reference model for B2B players investing in the e-commerce channel, but the challenge quickly becomes how to cover the long tail in various categories.
For a distributor, the marketplace can also be a good tool to strengthen cooperation with suppliers. Most B2B distributors do not source their suppliers’ entire catalog, instead only selecting part of it to include in their offering. When a distributor opens his marketplace, it can offer its suppliers an additional turnkey sales channel for all the products it does not buy from them. The integration of a partner can also go further than a simple catalog import. If the supplier has a brand to promote, the distributor can propose a dedicated sales area on the marketplace, via a corner presenting its offering under its own brand.
The marketplace can also be an excellent lever to strengthen the integration of online and in-store offerings. Because of the accelerated convergence of physical sales and online sales, buyers now expect a unified offering from one sales channel to another. A growing number of physical chains, like Staples in the U.S. or Retif in France, have opted to open marketplaces in addition to their e-commerce sites or otherwise be left to propose an online offering that would be less significant than that of their physical points of sale.
Conclusion
Make no mistake, the traditional boundaries of B2B commerce are being completely remodeled, and marketplaces are the main driver of this transformation. Tomorrow’s leaders of B2B ecommerce will be those that manage to capitalize on this model to stand out from the crowd, by meeting the increasingly demanding requests of B2B buyers.
Adrien Nussenbaum, is the U.S. CEO and Co-Founder of Mirakl