- long-term nature of the business relationship
- complex discount structures
- individual assortments and services
- individual products
- sophisticated logistics
- complex calculations of logistics costs
- Collection and payment of country-specific taxes
The typical sales channels in B2B are characterized by the so-called push principle. This means that manufacturers, e.g. via trade fairs and customer visits, present their products in direct customer discussions. The information is thus transferred to the customer or pushed to the customer.
These factors put B2B sales work in extreme contrast to the marketing-driven B2C business. Due to the described circumstances and a complex digitization process, many manufacturers and wholesalers have not yet started to capture and systematize processes, product data or parts lists. And this despite the fact that, for example, the innovative use of artificial intelligence can automate efforts in the creation of product data.
Many manufacturers and wholesalers already offer their customers digital product catalogues or online shops. To what extent these offers can actually be described as a B2B eCommerce solution, in the sense of a digitalization of sales, is questionable at this point. This is where we should delve deeper. What functions do these product catalogs, configurators and online shops offer customers and the company?
Often, online portals have arisen from the desire to offer an additional service and transparency to existing customers of manufacturers and wholesalers, who regularly order the same products over and over again and in some cases have a great knowledge of the products. Personally, I have noticed in a large number of B2B online shops that customers have to use a search that has no tolerance for errors or only finds products via article numbers. Or individual assortments are only made accessible to certain customers, whilst these products can only be found by searching for the article number. And this article number is communicated to the customer via e-mail. Shadow accounting of specific, individual part numbers by the customer is required. These online product catalogues or online shops were created 7 to 10 years ago, usually on the basis of individual software developments, and have been continuously developed since then. In many companies, these webshops are run by the IT department, which implements every feature requested by the business units. A modern, informative or sales-promoting user guidance cannot be realized in this way.
Usually these shops are hosted by the companies themselves. The accessibility of these B2B online shops is only guaranteed during the operating hours of the main location, so that internationalisation is not possible. In most e-shops, no ERP or at most one ERP system is connected for reasons of reducing complexity. Customers almost always buy on account and the online shop can only be accessed by the user via a login. All this appears to be low-risk and generates minimal costs in operation and further development. However, on the basis of this initial situation, no opportunities for more efficient internal processes, growth or additional sales with existing customers can be generated.
As a result, companies rarely tackle innovative improvements to their online store or even a complete relaunch of a new online store, and the door to new opportunities remains closed.
Business models & products go digital
- The spread of business models in the area of “Internet of Things” is increasing massively.
- The number of products that are digital themselves or have digital added value, e.g., in the form of a digital product, is growing. “predictive maintenance” is on the rise.
- The offer to customers to buy services “on premise” is growing. For example, the restaurant owner no longer buys a dishwasher, but clean glasses. “On premise” services only create added value if they can be purchased online without media disruption.
- New generations of products, such as the “Smarthomes” need to be operated, managed and monitored as a platform. Customers expect to be able to buy additional services through the platform as well. A media break is not accepted.
- The average age of the sales force is steadily increasing; already today, the majority of the sales force is over 50 years old. There is a lack of young talent, especially in B2B sales structures, and new paths must be taken. Online shops are a very good option here.
- The product knowledge of employees at manufacturers, wholesalers and customers is declining as employees change employers more frequently. That’s why more item information needs to be made available online. The result is a democratization of product knowledge.
Internationalization / scaling of markets / technologies
- Pandemics and other restrictions make access to markets via push (trade fairs, sales force, etc.) uncertain; online shops and the digitalization of sales are the tried and tested means of minimizing this risk.
- MVP and prototyping make it easier to solve the complex challenges of B2B e-commerce with new and innovative technologies.
- The “buying centers” at the target customers are getting bigger and bigger and the right information has to be offered to more people at the right time.
- Tools like real-time consulting incl. Image transmission is becoming a matter of course in use due to the Corona pandemic, among other things, and will be demanded more by customers in the future. Online advisors must be provided with digital information on products and services.
- Customer access has become more volatile. Customers today are more willing to switch, even in B2B. They want to get information on their own and, if in doubt, get very far along in the sales process themselves. Waiting for a personal appointment with the sales force is now only accepted by the customer when covering new requirements with unknown products.
- Customers are getting younger and are digitally native. You want to cover your information needs online and carry out simple regular procurements quickly and autonomously online.
- International online B2B platforms such as Alibaba and Amazon Business already offer suitable products for many product categories including detailed product information and are thus attacking their own market shares, at least in the low price ranges and for mass products.
- Modern online shops of competitors are rolled out internationally quickly and cheaply and attack their own market shares in their home markets.
- The stronger position of IT also in the development of industrial products will enable startups to innovate and bring new products to market more quickly than traditional providers.
We facilitate the entry into our clients’ digital transformations with strategy workshops and market analyses as well as develop successful, scalable and future-oriented digital solutions and individual developments for them.