Blog series part I: Here's why the Future of Commerce is important

Traditional sales models are dying out rapidly

Customers now expect their B2B suppliers to behave in a way, and provide an experience and capabilities, that resembles their consumer-facing buying experiences. That’s forcing a lot of companies to rethink their business models and practices, their pricing and product structures, how they’re organised, and of course, their technology landscape. Read the first part of our Evolving Customer study to learn about the Future of B2B Commerce and why it is important.

The future of B2B Commerce

B2B commerce has come a long way since the early days of clunky price lists on a basic website. Until recently, though, it seemed not every enterprise was convinced that it was necessary. Businesses around the world spent the past decade actively debating how important B2B commerce was, whether they should do it, or whether they even needed it. Today, there is no longer a question whether businesses should be playing in the B2B commerce space, or have some form of digital self-service. Covid-19’s acceleration of the digital space didn’t merely settle the B2B commerce argument: it highlighted the critical need and urgency for a digital business capability that is able to support customers across the entire spectrum of their commercial needs.

For too long, B2B commerce was seen as little more than a digital catalogue with the ability to place orders, with little to no priority placed on the end-user experience. The general approach was ‘if it’s available, it will be used’. It wasn’t. As a result, most organisations thought their customers were not interested in B2B commerce when they had in fact missed the opportunity to create a valuable business capability for them. Customers now expect their B2B suppliers to behave in a way, and provide an experience and capabilities, that resembles their consumer-facing buying experiences. Consumers have come to expect real-time visibility into stock availability, updates and insights into their order status, one-click check-out, and expedited and next-day delivery options.

That’s forcing a lot of companies to rethink their business models and practices, their pricing and product structures, how they’re organised, and of course, their technology landscape. B2B brands are now rushing to implement ways to make digital buying and selling easier. Between January 2020 and August 2020, B2B orders placed through e-commerce solutions increased by 44%, and most B2B leaders expect digital sales to make up over 50% of their business in the next two years.

The ramifications for businesses are significant. As most B2B sales interactions between suppliers and buyers shift to digital channels in the coming decade, this is going to demand untold levels of digital transformation from enterprises. Traditional sales models are dying out rapidly. Technology will fundamentally change the way businesses placed through e-commerce solutions increased by 44%, and most B2B leaders expect find and retain their customers, take products to market, function within supply chains, and provide services. So where to for businesses next? PwC gathered a group of leading thinkers in commerce and digital transformation to talk about the key issues that every B2B enterprise should not only know about, but be acting on right now. digital sales to make up over 50% of their business in the next two years.

«There are clear incentives for companies to pursue an e-commerce model. Digital B2B channels open new opportunities, lower the cost-to-serve, increase value for customers, drive competitive advantage, expand customer bases and increase loyalty.»

Quinton Pienaar,Partner, PwC UK

Decoding the buzzwords in a pandemic affected world

B2B vs B2C. B2B and B2C commerce solutions vary in numerous aspects. These include the type of vendors, business requirements, and target audience. B2C commerce is suited for branded manufacturers, direct-sellers, and online retailers looking to sell their products directly to consumers. B2B commerce is the best fit for business manufacturers and consumer packaged goods brands who aim to serve their business buyers in an entirely new way. More and more companies are looking to connect B2B and B2C commerce programs to enhance agility and create virtuous cycles, but many are still trying to resolve siloed B2C or B2B efforts.

Headless commerce. This is one of the least understood buzzwords in e-commerce. In simple terms, headless commerce means the front end and back end of an e-commerce application are separate. Separating the two allows brands to move quickly to offer new customer experiences without having to rebuild the entire back end at the same time. It also allows them to connect into various channels more quickly, creating commerce point of sales through a social media post or video post without having to rebuild or develop a whole new e-commerce approach and tool. Salesforce’s API-first approach is a great example of how extensibility can be achieved easily, and importantly, by planning your approach upfront.

Omnichannel. Many people confuse ‘multi-channel’ with ‘omnichannel’. Multi-channel simply means you sell, and interact, across several channels. Omnichannel means you create a consistent and seamless customer experience, no matter what platform or channel the customer is on. This term is often used when talking about headless commerce applications.

B2B Marketplace. In its simplest form, this is an online commerce platform that brings together a range of buyers and sellers to check prices for the best deals and transact in one place. These marketplaces can be organized vertically or horizontally and have a number of different business models. Examples include Amazon Business, Alibaba’s B2B Marketplace, Mercateo, Global Sources, and others.

Vertical marketplace. This is where marketplaces really get interesting. Here, buyers and sellers in specialised industry segments can compare prices and buy and sell. We see this as a clear growth area in the coming years. There is the opportunity for this to expand into a location where buyers and sellers can co-develop solutions, as well as share information on market trends and existing solutions.

Horizontal marketplace. Horizontal marketplaces connect businesses across different segments. This is important for several sectors, like the construction industry: you don’t just want to buy construction supplies and services, but you also want to link with associated professionals – and maybe even buy office furniture for a new build.

Hybrid marketplace. Any marketplace offering more than one type of business model is a hybrid marketplace: B2B, B2C, C2C, with an array of products and services.

«When done correctly, digital B2B channels open new opportunities, lower the cost-to-serve, increase value for customers, drive a competitive advantage, expand customer bases and increase loyalty among existing customers.»

Quinton Pienaar,Partner, PwC UK

Here’s why the Future of Commerce is important

As in all aspects of their lives, they’re looking for a secure, slick customer experience. Making their job easier, protecting their identity and caring for the world around them are important. Time is a precious resource, and they certainly don’t want to spend it battling with systems, processes, and organisations that are making interactions with them difficult.

Businesses are also demanding greater clarity on the end-to-end lifecycle of their data. They are reluctant to share information unless necessary. There is a greater understanding of how B2B commerce increases the threat landscape and therefore the risk posed to their business.

Despite the challenges involved, there are clear incentives for companies to pursue an e-commerce model. B2B commerce, if done right, allows real-time feedback, supports the ability to earn and use loyalty rewards, and drives cross and upsell opportunities with segmented and personalised offers. That’s because digital channels allow businesses to leverage new customer relationships and capture data and intelligence about their needs and preferences. They’re going beyond selling goods and services online to gain new 360-degree views of customers, distributors, and the supply chain. They’re suddenly getting the ability to use technologies like artificial intelligence to help anticipate customer preferences and needs.

Getting B2B commerce right involves some effort. To ensure seamless order management, stock replenishment and omnichannel sales management across owned stock and distributors - and the ability to make a promise during the sale and fulfil it - means organisations must connect front office to back office, and ensure they can provide the right information at the right time to fulfil the client’s need, or offer alternatives. Additionally, companies must ensure alignment with local government’s tax laws and specific e-invoicing features.

If you like what you’re reading, please reach out to us to discuss the next steps in your business transformation, and how we can help you build the B2B omnichannel commerce platform of the future.

For more information on the topic of customer transformation, please visit our website.

In the following blog articles, we will deep dive into the trends driving the commerce book, the challenges commerce faces and how to get ready for the commerce journey and differentiate yourself.

In a nutshell

B2B commerce is undergoing radical change
Most B2B sales interactions between suppliers and buyers are shifting to digital channels
This results in demand for untold levels of digital transformation from businesses

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