Overview
Today, the eCommerce market has been displaying some innovative and interesting changes. The playing field has been leveled and the B2C market now faces a new entrant at par with its original status in the form of the B2B market.
In its traditional form, eCommerce was directed to typical retail customers. However, markets the world over are facing tremendous upheaval. B2B businesses are now inching towards the reputation enjoyed earlier by B2C companies.
How B2B is changing and challenging B2C
Traditionally, these markets were earlier closed domains, as they had complex business processes and needs. For example, only five years ago, the traditional B2B markets would not fit into what could be defined as an online business.
This has changed now largely due to improving technology and changing business laws around the world, resulting in a tremendous shift in how business is being done in the world markets presently.
This tectonic shift can be seen in the statement made by Jack Ma in March 2013, wherein he slammed the traditional B2C eCommerce model, which he also calls the Amazon model, as the wrong way to do business online. The following points apply:
- Thus, as eCommerce is becoming a leveled playing field, B2B is now becoming the fastest growing segment in eCommerce, as brands and manufacturers are going directly to the consumer. However, none of the brands as well as verticals are doing right, as they are trying their best to resolve the issue of what is called the Channel Conflict.
- It can be easily said that eCommerce is no longer just B2C, as B2B businesses vie for the same customer attention that B2C businesses generate.
- As one website puts it, B2C is more emotional as the are based on an immediate perceived need. However, B2B falls in the realm of corporate sales and purchase, which are evaluated, planned and have a longer term
- Hence, what B2B has done is to replicate similar business tactics employed by the B2C industry and by ‘integrating the sales rep’ business model and utilize similar business portals and tools as the B2C segment. This has made B2B a very strong sales channel.
The B2B2C Sales Model
To emulate their B2C counterparts, the B2B commerce have started going to the customers themselves, in what is called the B2B2C sales model. They have realized that going directly to the customer can be rewarding indeed, especially with the technology around that supports this tactic.
Better margins are tempting merchants to go directly to the customers. With B2B able to sell at better margins, which means that it can sell products at wholesale prices. Therefore, the market is now full of many brands that have opened their own stores. Following points reveal how things are shaping up:
- Since customers trust brands, they could buy the brand from a dealer or could even end up buying the brand from the manufacturers themselves. It is strange to believe this, but by going directly to the customer, businesses have discovered that they can have tighter control over their customers’ brand experiencing ability.
- The fact is that B2B businesses are building stronger relationships with their end users. Brands they build are talked about and even go viral, and the information the B2B companies are able to gain from these customers is invaluable.
- Hence, the ability for B2B companies to build their own relationships with the end user is now becoming even more powerful year upon year. The relationship building is now called brand loyalty, which has turned into a business relationship where transactions take place.
- Keeping an eye on the competition is yet another way that the B2B sector is utilizing to improve their customer relationships. Its indeed advisable to keep an eye on the business your competitors are doing, and its a part of your full analysis and planning.
- Out there in the real world, retail shelf space is shrinking down. B2B firms are becoming more and more powerful by controlling product offering, providing it through the online channel for customers to manage themselves and through the ability to control the brand image. This also includes marketing knowledge, and also the overall purchasing ability for their end users.
How B2B is facing challenges itself
- AS B2B is getting into B2C space, the challenges are overwhelming. The biggest consideration is channel conflict as we have discussed before. Also, understanding the local customers is proving to be a hitch with many B2B customers. Penetrating local markets is proving to be more of a headache to B2B companies than previously thought.
- Lack of backend systems and migration to IT is proving to be another pain in the neck for many B2B companies. These do not have the necessary logistical or even the backend support for this purpose. The continued use of legacy software might not be a good idea as seamless integration becomes a major issue here.
Other issues such as consumer demand planning and planning for IT infrastructure issues are a major blockages in the pipeline.
Overall, B2B and B2B2C are are a new trade to learn, which needs a fresh look at issues such as frontend user experience, A/B testing, conversion optimization, analytics tracking, and so on. It needs meticulous planning and accommodating and if not taken seriously, the challenges that this could offer are enormous.
Some businesses that have recently entered the eCommerce arena in many countries around the world are the home and garden industry as well as the food and beverage industry.
These segments are doing extremely well in the online market, and if you belong to these segments, it would be a wise strategy to get your B2B or B2C eCommerce website constructed or tuned up in Magento for an excellent start in this hotly competitive sector. Additionally, you can consult us for a rocking eCommerce strategy that will take your eCommerce business places. The gains are all yours!
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Shivi Rao is a content marketer with Krish. She has worked in various industries spanning technology, science, rural marketing, startups & unicorns, eCommerce business, and digital marketing, believing that content is the foundation to facilitate the visibility of any organization and ensuring her words do the same. In her free time, you can either find her lifting weights in the gym or feeding the strays.
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