Digital commerce has become a universal theme for organizations across various industries and business models. Whether B2B or B2C, businesses have ramped up their efforts to deploy digital channels to engage their clients more aggressively and deliver highly personalized customer experiences.
Although, it seems, the average person understandably associates digital commerce with the B2C realm for its obvious popularity in verticals such as food and retail, the great push is actually taking place somewhere else, a place that is perhaps often overlooked for being less flashy: B2B manufacturers.
According to a Gartner survey, the average revenue contribution of online platforms in B2B businesses has caught up that of those in B2C. In addition, the number of B2B businesses that generate revenue from digital commerce has jumped ahead of B2C businesses.
The report states: “Innovation, transformation and the desire to improve customer satisfaction are driving B2B digital commerce initiatives.” Another important finding of the report is that 75% of organizations selling directly to consumers will offer subscription services, but only 20% will succeed in increasing customer retention by year 2023. In 2025, 75% of B2B manufacturers will sell directly to their customers via digital commerce.
To understand how manufacturing has emerged as the trailblazing industry of digital transformation, it’s worth paying attention to what is happening in the B2B space, which historically lagged behind B2C until now.
In the wake of the pandemic, digital commerce became more mainstream for B2B businesses that helped them close the gap with their B2C counterparts. It is expected that online channels will overtake direct sales channels in terms of the number of transactions by 2023.
B2B businesses have a much stronger motivation to reduce the high cost of doing business through innovation. Turning websites into e-commerce hubs where buyers can discover and compare prices instantly proved to be beneficial for B2B sellers. As buyers can search products more easily, the 24/7 availability of websites turned B2B organizations into virtual shops with no “Closed” signs.
Even though B2B customers don’t order online as frequently, they tend to place much larger orders that match their B2C counterparts in transaction value. As websites have relatively low operating costs, the uninterrupted sales flow that they can generate makes them lucrative platforms for B2B organizations.
However, the story goes beyond simply cutting costs and increasing profitability, which, of course, is the be-all and end-all for all business. From a customer experience perspective, B2B businesses are finding that their customers are largely behaving in the same way as B2C consumers who prefer much personal customer experiences that are customized for their unique needs.
As a result, more and more B2B organizations with digital commerce capabilities are building additional features on their digital platforms to enable their clients to configure products. B2B organizations are finding major value in this strategy, which is evidenced by the fact that they are twice as likely as B2C organizations to sell customizable products on their websites.
B2B customers expect digital commerce platforms to be more intelligent and understand their needs without the need for human interaction in the process. In the past, it was often the case that customers needed to exchange a few emails with an organization or speak to a representative to get information or reach a deal.
Now, however, these manual steps are getting eliminated by the prevalence of automation in sales processes that are powered by digital interactions that sort themselves out without any middlemen. This means that B2B organizations have a strong incentive to incorporate automated sales solutions, since those can will be the ultimate winners.
In order to achieve that goal, B2B digital commerce platforms need to get access to end-user data. Leveraging customer data is especially a high business priority for B2B manufacturers, as that is how they can manage to predict and provide what their customers want. Being one step ahead of the competition to get to their customers (an even acquire new ones) before everyone else is what makes all the difference.
This sparked the exodus of B2B manufacturers from third-party marketplaces. B2B manufacturers are widely launching their own individual marketplaces to keep their revenues to themselves and not share their own customers with third-party service providers. With their own platforms, B2B manufacturers enjoy direct access to their customers and collect the necessary data to run personalized campaigns that increase customer satisfaction and loyalty.
The digital transformation journeys of B2B manufacturers is still in the early stage. It is working as a stepping stone for them strengthen their existing customer relationships and acquire new customers in a cost-effective way. It seems that the adoption of digital platforms are not only important for providing enhanced customer experiences but also for making customers more sticky. The incorporation of website-driven digital commerce has been absolutely a dominant force for the rise of the B2B segment and the evolution of manufacturing is definitely a step in that direction.