Guide: How to get started with B2B commerce
If you’re a B2B company making your first steps into digital commerce, read on as Kasper Knudsen, Senior Client Director at IMPACT Commerce, guides you through the steps you need to follow to make your transformation a success.
RISING DIGITAL DEMANDS
At IMPACT Commerce, we’re seeing that manufacturing and distribution companies are investing more in their digital capabilities than ever before – and this observation is supported by data.
Two-thirds of corporate buyers now rely on digital and remote channels during their purchasing process (McKinsey 2023), and a significant 72% of B2B buyers initiate their journey online (Salesforce, 2023).
The reality is that as the next generation becomes influential B2B decision-makers, they expect vendors to provide a frictionless and consumer-like digital experience.
The baseline has shifted significantly in just a few years. It’s time for manufacturing and distribution companies to evaluate their potential and start investing in digital commerce.
Essentially, digital commerce involves trade of goods and services online. In recent years, the expansion of B2B commerce has begun accelerating and there’s a good reason why. By working strategically with e-commerce, manufacturing and distribution companies have been able to attract a larger customer base and increase profits.
Over the span of just three decades, e-commerce has completely transformed our shopping habits. Shopping no longer confines us to physical stores, manual selection and payment of products. What was once a time-consuming shopping expedition can now be done seconds, accessible from any location at any time.
The trajectory of e-commerce has been a steady upward climb ever since the inception of the first online transaction in 1994. However, the eruption of the COVID-19 pandemic and subsequent global lockdowns propelled customers further into the digital realm. In the United States, e-commerce sales penetration skyrocketed, doubling to 35 percent in 2020 compared to the prior year—an advancement equivalent to a decade’s progress. On a global scale, nearly 20 percent of overall sales in 2021 originated from online transactions. Projections indicate that by 2025, almost a quarter of all worldwide sales will occur online (McKinsey, 2023). Even businesses that currently do not have e-commerce expects to make investments. According to a recent study 75% of all companies expect e-commerce to be part of their business within five years (World Economic Forum, 2023).
Nevertheless, there are still B2B enterprises that continue to overlook the situation, relying on arguments that were valid a decade ago. Numerous misunderstandings surround the realm of B2B e-commerce. Despite being one of the preferred channels for corporate buyers’ procurement, we often hear statements from B2B companies such as “our products are too complex” or “our customers aren’t ready”. However, two-thirds of corporate buyers extensively depend on digital and remote platforms during their purchasing process (McKinsey, 2023). Furthermore, we experience that B2B suppliers are investing in their digital capabilities like never before.
4 STEPS to get STARTED WITH B2B COMMERCE
With more than 25 years of experience with commerce strategy consulting, implementation, and optimisation, IMPACT Commerce has compiled a four-phase model for B2B companies to get started with digital commerce:
- Customers (behaviour, motivation drivers, and jobs-to-be-done)
- Business (business goals, organisation, and processes)
- Technology (IT architecture, platforms, and data)
- Business goal formulation (improve customer satisfaction, retention rate, increase revenue, optimise internal processes, and cost reduction)
- Prioritisation of digital initiatives 2-3 years ahead
- Organisational change and change management
- Joint team (client and agency)
- Agile approach
- Track (customer behaviour, platform performance, SEO performance, and business goals performance)
- Optimise (conversion optimisation, search engine optimisation, and customer data utilisation)
Benefits of starting with insights and strategy
The insights and strategy phase typically spans 1-3 months in total.
By anchoring your strategic decisions to a valid and data-based knowledge foundation, you’ll be sure your priorities are in the right order. With insight gathering and analysis, you’ll build a strong knowledge foundation, and you’ll enable your management group to make more qualified decisions, set a clear strategic direction, and prioritise initiatives for the coming years.
This evidence-based approach significantly enhances your chances of achieving real and ongoing business value – both short-term (3-6 months ahead), and long-term (2-3 years into the future).
Historical evidence shows that underinvestment in the insights and strategy phase can have negative long-term effects on your company’s return on investment. Moving ahead too fast also increases the degree of re-work in the future.
Once insights are gathered and your strategy is set, we transition to the implementation phase.
Implementing the solution: consider a Co-pilot
What might seem like the most straightforward part is where some companies tend to fall short.
Knowledge and experience with implementing digital commerce is essential to achieve a good process and result. It optimises your chance to meet the expected scope, deadline, and budget of the project.
Doing it alone is possible but can be tricky. It’s not just a matter of staff availability, but also of having the right capabilities involved. For this reason, collaborating with an external partner with knowledge and experience in B2B digital transformations can be a good idea.
It’s no secret that a successful implementation phase is highly dependent on experienced management and a close, mutually respected cooperation between your business and your digital partner.
The extent of a collaboration and which specific working model is most appropriate depends on your company’s digital maturity and specific situation. The digital partner’s involvement can extend from consultancy only, to full strategy and implementation.
A healthy digital partnership commonly extends beyond the implementation phase.
Continuous improvement and digital maturity
To get maximum value from your new solution, we recommend your team to continuously work on optimisations and feature improvements.
The positive side effect of this hands-on approach is that your company and your employees’ digital maturity level will make significant progress. The adoption of digital skills will become a valuable asset for your business to build upon in the future.
Also, employees will become increasingly competent in initiating and running new digital initiatives themselves. We experience some companies move from being reactive, to being proactive and digitally driven, by leveraging new technologies to support future growth.
The digital maturity journey is 80% about people, and 20% about technology. Change management is important. Having an experienced co-pilot by your side will help you stay clear of known pitfalls and make the journey less bumpy.
Before you jump in, it’s important to be aware of some often-overlooked aspects of B2B commerce.
Pay special attention to
It demands a strong comprehension of both upstream and downstream operations.
Making the move to digital commerce require change management, digital training, and onboarding of employees.
The influence of habits and individual resistance may be stronger than you anticipate.
Incentives and bonus schemes must be aligned to accommodate both digital commerce and traditional sales. If not, your sales staff will perceive digital commerce as a competitor rather than an enabler.
Technology is important, but your business and the customer experience aspects are equally essential.
Learn more about the mistakes B2B companies are making when it comes to commerce strategy in this article →
THE FINAL WORD
There’s never been a more critical time to get start started with B2B commerce. We hope that instead of sticking with the old way of doing B2B, you’ll feel informed and empowered to make your first steps into future-proofing your company, making your customers’ lives easier, and boosting your revenue by prioritising your digital transformation.
Are you considering getting started with B2B commerce?
Contact Kasper Knudsen if you want case examples and advice on strategy.