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Wholesalers and brands have no future without eCommerce, omnichannel and personalization
27-01-2023
Inflation rates we haven't seen for a generation, energy and material prices shooting through the roof, personnel shortages, consumers putting their hands on the purse strings, global supply chains still not recovered from the corona shock, and the EU and UK heading for recession: the short-term economic outlook seems murky.
Does this mean companies are going to put the brakes on digital transformation and their IT spending? You might expect it, but the answer to this question is abundantly clear: definitely not! Even if a recession becomes a reality, many wholesalers and brands will continue to increase their spending on digital. Indeed, it is now clear that eCommerce, alongside traditional sales models, is essential to the growth and even survival of wholesalers, retailers and brands. For example, 65% of wholesalers now already offer online sales channels and capabilities. So it's high time to take a closer look at the key eCommerce trends for wholesalers and brands in 2023.
Social media and eCommerce are merging more often. More and more B2B companies are using social media to engage customers and strengthen their brand identity, a trend that started in China but is now being replicated worldwide. Where social media were initially primarily advertising platforms, today companies also regularly use them to actually sell products.
For example, a live shopping event on TikTok earned modest British skincare brand Mallows Beauty revenue comparable to the fortnightly sales of their largest physical store in Cardiff. And an Instagram livestream from furniture maker Snug, where followers also had the option to buy products, generated 40,000 comments in just over half an hour. Even a social giant like Pinterest is plunging more frequently into online selling with "shoppable pins.
A survey of Dutch consumers indicates that 42% of Dutch people placed at least one order through a social medium in the past year. Not surprisingly, the young people of Generation Z are leading the dance. Moreover, the possibilities offered by augmented reality (AR) (simulation, getting the customer up close and personal with a product in an alternate universe) are creating new commercial opportunities on social media that wholesalers and brands are slowly beginning to discover. The B2B companies that are able to make the most of the power of social platforms will be the winners of tomorrow.
A second key trend is the continued rise of omnichannel. In a typical B2B transaction, a customer today interacts with an average of 10 channels before making a purchase, double the number in 2016. This means companies need to find ways to engage and engage (potential) buyers before interacting with them in person.
To do this well and effectively, it is important to offer customers the same story, the same price and the same stock and availability through every channel (website, social media, print, physical store, ads, customer service). This is the core of B2B omnichannel, a strategy that wholesalers, retailers and brands can no longer ignore. According to a survey by McKinsey, 94% of B2B decision-makers now see a good omnichannel strategy as an essential success factor that is at least as important as traditional face-to-face sales models. Omnichannel is rapidly evolving from a trend to an absolute must-have.
The B2B customer searches the Web with a clear goal: to find the right products at a good price. As a wholesaler or brand manufacturer, you can make that task easier and more pleasant, for example, by linking your ERP system to your eCommerce platform.
Personalization goes a step further. For example, consider suggesting an alternative product with an earlier delivery date, or even the same product you get from a warehouse with excess stock that is closer to your customer's factory, office or distribution depot. A chatbot or representative can make personalized suggestions. These are based on the customer's order history and the products they have previously viewed or searched for. You can also perfectly personalize your content by fine-tuning text, images and branding to clearly defined buyer personas.
Trust is the cornerstone of B2B relationships. You see this clearly in cross- and upselling, for example. With a new prospect, you have a 5 to 20 percent chance of selling an additional product this way, while with existing customers the percentage is 60 to 70 percent.
Artificial intelligence helps you scale up cross- and upsells. This is because technology can recognize and uncover connections in customer data that previously remained invisible. This helps you surprise customers. Moreover, it gives salespeople the ability to provide better (problem-solving) advice to customers and link it to bundles that create interesting opportunities for cross- and upselling.
B2B marketplaces are currently the fastest growing channels within business eCommerce. Marketplaces also account for a growing share of total B2B sales: 6.9% versus less than 2% in 2020. There is certainly also evidence that selling through marketplaces works: companies with a marketplace were more likely to increase their market share in 2022 than competitors who did not have such a sales platform.
For about a quarter of B2B buyers, a marketplace is the first stop on their digital search journey for new products. By being visible on a marketplace, you are showing yourself early in the customer journey to potential buyers that you would normally find difficult or impossible to reach. Marketplaces increase your online "surface area" (the more touch points, the more likely people and businesses are to find you) and give you the opportunity to expand into new markets. Selling on online marketplaces also requires little effort and investment on your part.
One of the biggest differences between B2B and B2C are the more complex pricing structures and settings in the former. Integrating eCommerce platforms with the ERP system helps you leverage data such as discounts and payment terms, things that in a B2B environment often vary by customer.
Actually paying, however, is a different story. In personal finance, we see that the fintech revolution has spawned numerous digital payment solutions (payment apps and apps for buying and investing in foreign currency) that increase ease of use and provide a frictionless experience. In the B2B world, companies are still a bit more reluctant to widely adopt new digital payment solutions. For example, a survey by PYMNTS shows that 81% of B2B companies still regularly pay invoices with paper checks.
This creates friction when you consider that the majority of customers actually need a fast digital checkout and payment solution. Indeed, it is a deciding factor in choosing a vendor that uses eCommerce. Automating the process known as accounts receivable and using digital wallets are the most popular and promising digital payment solutions in the B2B sphere.
The former gives you the ability to automate payment processes to create smooth experiences that drive customer loyalty. Digital wallets help b2b sellers embed fintech functionality into their ERP systems and easily pay across markets, currencies and countries. This way, you avoid the complexity associated with using multiple payment providers and different accounts. You provide customers with additional convenience while improving the efficiency of your own accounting and payment processes.
The economic outlook for 2023 is not very bright. But brands and wholesalers often look 2 or 3 years ahead in their strategic planning. While we don't have a crystal ball, there are a few predictions we can make with confidence. For example, Generation Z and Alpha will take eCommerce development via social media to even greater heights. The annual market for B2B transactions already exceeds $50 trillion and will only continue to grow in the coming years. So there is plenty of room for technical innovation in eCommerce and payment solutions. In conclusion, brands and wholesalers that do not fully commit to eCommerce and do not work on personalization and omnichannel will soon have no future or relevance.
The myth that most B2B companies don't do eCommerce has been busted. This whitepaper summarizes the key eCommerce trends in 2023.
