B2B e-commerce in the spotlight: Insights from Envision B2B
The B2B digital commerce space is up and coming. And although it’s still relatively new, plenty of experts have been championing for B2B to move online before it was even trending.
These experts gathered for a three-day event in Chicago, at Envision B2B. Leading industry players like Kelloggs, Grainger, Siemens, Staples, and so many more, came together to share their e-commerce journeys.
Over 50 speakers and more than 30 sessions and workshops later, there were three major themes that stood out to us at the conference. We’ll cover them below:
1. Marketplaces as a focus
Michael Brown, Founder and General Partner at Bowery Capital, spoke at a session titled: Wall Street’s Take on The Future of Digital Commerce. He made one thing abundantly clear: B2B marketplaces are here to stay.
Once considered the Wild Wild West of B2B – marketplaces have gone from speculation to reality.
And while Brown mentioned that certain industries like logistics, transport, and retail are the most attractive segments, investors are highly attuned to the opportunity in the marketplace space.
They are critical however when it comes to determining the ‘success’ of a marketplace. GMV for example, can help quantify the growth of the marketplace in terms of sales.
But it’s not the only thing that matters. For the success of a marketplace, Brown explained that merchants need to have sales efficiency, high margins, and strong customer acquisition costs.
That is obviously easier said than done. Luke Powers, Founder and CEO of Gearflow, spoke on a panel titled “How Online Marketplaces Strive to Better Serve Sellers” – where he mentioned how complex the transaction side is for marketplaces.
Between seller fees, returns, background checks, the complexity of launching a marketplace can be overwhelming at first.
But the same challenges are also a competitive advantage. Scott Barrows, CEO of BluePallet, explained how Amazon Business doesn’t do the kind of background and risk checks that vertical B2B marketplaces are doing in their vetting process. So sellers and buyers actually prefer the specialized marketplace model. “We’re not in the business of replacing or disrupting distribution,” said Powers.
Their tip? You don't want to compete with the seller/vendor relationship, instead you want to act like a network.
2. Customer-first as the leading approach to digital
One of the resonating messages throughout the event was: Know your customers. And meet them where they are. Lori McDonald, President and CEO of Brilliance Business Solutions, stressed the importance of taking a holistic approach to B2B e-commerce and thinking about the end-customer, not just the product you’re selling.
Something as simple as having the correct nomenclature for your products is key to building trust and adoption.
Kelloggs made it a priority to tune their digital strategy to their audience. They serve a number of different customers: from convenience stores to schools to hospitality and non-restaurant businesses.
Each one has different challenges and Rob Birse, VP of Global E-commerce at Kelloggs, explained that the online experience needs to reflect that.
Innovate based on what each one of your customer groups need.
For example, in the safety profession, buyers need to communicate quickly and on-the-go so mobile is important. On the other hand, there are buyers in other verticals that do want the option to call in and speak to a sales representative.
The overarching recommendation was that merchants need to be familiar with all of the use-cases of how customers will interact and use your site. This is what should influence the functionality and features of your digital storefront.
3. Measuring success
According to an in-session poll, 62% of the audience was in the middle of their digital transformation process.
But even with a digital strategy in place – it can be hard to know that you’re on the right track.
Birse, in a session on Kellogg’s digital transformation journey, outlined some key metrics they used to measure the impact of e-commerce.
Some of which included: higher gross-margin, higher cart value, and percentage growth of online vs offline users. In other sessions, metrics like sales lift, repeat customers, and churn rate, were also mentioned as key indicators of your online business. And there were plenty of success stories to prove it.
Parts Town shared that 70% of their sales are from their digital channels and that they saw a 34% annual organic growth with e-commerce.
Parts Town, which sells OEM restaurant equipment parts, knew that they couldn’t ignore the B2C shopping expectations that are influencing how buyers want to purchase online.
For them that meant putting a big focus on things like creating a positive UX experience, building trust with customer reviews, and launching a mobile app to make ordering and tracking as easy as possible. Linda Ramsey, SVP Marketing at Parts Town, mentioned that to build stickiness, it’s not about having the best prices – it’s about creating the best experiences.
TLDR: B2B e-commerce is here
We could feel the buzz at the conference. And while each session covered different topics and case studies, there was one obvious consensus: the time to launch a digital strategy is now.
The companies that are already doing a large part of their business online are reaping the rewards. Connect with our team to learn more about how Balance can help you move your business online.