The seamless experiences we have with our favorite consumer ecommerce sites have set a very high bar for the expectations of B2B buyers.
No longer satisfied with conducting business via catalog, phone and fax, business buyers desire the ease of purchasing found in consumer sites, including features like intelligent search, personalization and self-service. According to Statista, in 2019, B2B represented a $12.2 trillion global marketplace, six times larger than the B2C market. And in the U.S., the B2B ecommerce industry will hit $1.8 trillion by 2023, according to Forrester.
In addition to selling directly to B2B buyers (wholesalers, distributors, retailers), most manufacturers also understand the benefits of establishing a direct relationship with end consumers. Yet, it is also well known that channel conflict prevents many B2B companies from selling online as they don’t want to disrupt their channel relationships. The default option for many B2B companies is to opt for the status-quo: a digital catalog that features products but lacks transaction and customer experience capabilities.
Ironically, breaking through this status-quo has been one of the key growth drivers for Magento in the B2B market. According to Shannon Hane, Senior Manager, Product Marketing for Adobe.
“We’re seeing a trend of B2B companies needing to sell to channel partners AND consumers on a single platform.”
Since adding B2B capabilities in late 2017, Magento Commerce has experienced a steady growth of B2B customers seeking this hybrid use case. Given their long history in B2C ecommerce as well as their robust content management capabilities, they have unique features that B2B organizations can explore, whether they are looking to build out a commerce capability or are looking to replatform.
Feature 1: B2B and B2C on a single platform
Magento long recognized that consumers want a direct relationship with manufacturers, and today, a direct-to-consumer capability has become a critical business requirement. Akin to a rising tide lifting all boats, when a business invests in and maintains a consistent digital brand experience across audiences, sites and geographies, everyone benefits. According to Hane, a direct to consumer relationship doesn’t have to take away from other sales channels. In fact, many manufacturers have found that investing in their own digital presence can actually create a halo effect for their channels including more traffic going into retail. Many of Magento Commerce’s B2B clients have pursued innovative ways of working with channel partners including creating their own marketplaces. By “controlling the glass” and having channel partners handle sales and fulfillment, B2B companies can optimize their brand experience and get closer to their customers without disintermediating their partners. Establishing a direct presence is becoming more of a necessity. History has taught that any disruptive event can cut off traditional sales channels, and manufacturers are well advised to have a direct-to-consumer safety valve in place.
Feature 2: Actionable direct-to-consumer (D2C) data
By operating both B2B and B2C on a single platform, manufacturers can more easily consolidate the data and get a holistic picture of their digital commerce business. They can use the D2C channel to connect more closely with their end customers and gather valuable data through site and sales metrics, customer ratings and reviews, a/b testing, and more. This data can help them refine existing product offerings, determine what new products to add, and gather insights that will help them determine the right products to sell in the physical retail channel.
Feature 3: Amazon marketplace integration
In addition to its consumer marketplace, Amazon’s B2B marketplace, launched in 2015, hit $1 billion in its first year and has quietly grown to over $10B in gross merchandise volume, faster than Amazon’s retail and AWS segments. For any B2B company looking to enter this massive marketplace, Magento Commerce has Amazon Sales Channel allowing merchants to manage products and sales on Amazon from within Magento Commerce. Through one interface, B2B companies can synchronize product catalogs, inventory and order information with Amazon. B2B pricing enables B2B merchants to offer businesses tiered pricing based on quantity purchased. For consumer goods manufacturers, the interface allows a manufacturer to sell on the consumer marketplace and for industrial supply manufacturers, the interface enables selling in the B2B marketplace. Both scenarios offer seamless integration so you aren’t burdened with managing multiple storefronts.
Guidance client Rubies Costume Company is the world’s largest designer, manufacturer and distributor of Halloween costumes and accessories. Prior to partnering with Guidance, Rubies did not have any ecommerce capabilities and their website primarily served as an online catalog. Rubies wanted to scale their business and needed an online solution to accept all orders. Given their extensive catalog, Guidance developed a Magento B2B ecommerce website with a wide range of integrations to support their large B2B business. More recently, Rubies costumes has entered the direct to consumer space with an exclusive Amazon store. Through a single interface, Rubies can manage both businesses simultaneously and leverage the data from Amazon to influence future product development.
It’s safe to assume that B2B ecommerce will continue to surge ahead with new businesses entering the B2B market resulting in more competition and new buyer behaviors. For any B2B organization that is defaulting to a status-quo solution or is concerned about channel conflict, the Magento Commerce B2B ecommerce platform provides unique capabilities. To explore whether this Magento website development solution is right for your business, give us a call.