2020 may come to be seen as a watershed in the history of e-commerce due to the impact of the COVID-19 crisis.
The boom in online consumer marketplaces and delivery services received much of the world’s attention, but in many ways this was simply the accelerated evolution of an ecosystem that had been steadily growing since the 1990s.
For businesses – many of which were caught off-guard by the pandemic – the outbreak has been an existential crisis and the related transformation has been profound.
For B2B organisations, COVID-19 triggered a race against time to migrate sales operations online and at scale, optimise sourcing, create real-time inventory information and automate procurement flows.
From the beginning of the crisis, it was clear that companies that had invested in digitalisation and e-commerce prior to the crisis had the upper hand.
Often, the notion of crisis management goes hand-in-hand with patchwork solutions and short-term costs. In the case of traditional B2B organisations, however, we’re seeing the long-lasting transformation of business strategies designed to invest in a vast well of future opportunity including embracing e-commerce.
And regardless of where they sit on the adoption curve, B2B e-commerce has now become a key priority for the digital transformation of organisations as they begin rebuilding with a focus on becoming more resilient.
A customised and effective e-commerce solution can enable organisations to scale their businesses by expanding into new markets, gaining access to a larger customer base and by opening new sales channels. This is critical for businesses to succeed and future proof themselves. Digital leaders in B2B significantly outperform their peers in terms of revenue growth and earnings1. The pandemic has reinforced this reality.
“For these and other reasons, B2B e-commerce is the fastest growing segment for many companies and is now worth somewhere between four to six times the value of the B2C market,” says Mahesh Narayan, Global Product Lead – Mobile Money & E-Commerce at Standard Chartered. “But if we look at the sheer potential of e-commerce across all channels, it’s phenomenal.”
More and more companies are waking up to this potential. According to McKinsey, preference for digital sales channels is twice as high as before the pandemic, and digital interactions with customers are now seen as three times more important than traditional face-to-face relationships. Remote selling has become the norm.
Two distinct trends are driving this e-commerce boom, Mahesh Narayan says. The first is the ‘direct-to-consumer model’, in which companies from small retailers to multinationals are setting up their own portals and going direct to consumers, product distributors or dealers.
The second is “the rise of vertical or specialised marketplaces” – online portals that are creating ecosystems, bringing multiple buyers and suppliers on a single platform and offering a deep range of products in a particular category or industry.
Replacing face-to-face interactions – which until recently was a crucial element of building business relationships – has been particularly difficult. B2B sales cycles are long and more complex. Also, when it comes to placing orders, they will be higher in quantity of products or services, have much more complicated requirements, not to mention the higher and variable value of transactions.
Therefore, companies need to make the right choice when it comes to investing in a B2B e-commerce platform. This is also driven by the fact that B2B customers tend to seek the same user experience as B2C customers when it comes to a speedy check out process, flexible and trusted digital payment options and fast delivery.