While many B2B organizations have not yet been directly impacted by these developments, they should study and learn from their B2C competitors. Our sector is undergoing disruption, and ignorance is not an excuse for inactivity.
Every firm and sector is affected by the need to invest in operations and procedures that include digital capabilities. B2B businesses, however, have additional obstacles. Their customers are increasingly gravitating toward digital tools for product research and purchase—after all, like everyone else, they use Amazon at home.
Ecommerce—reported in 2018 that just 40% of firms had an ecommerce website. The industry, on the other hand, is catching on. According to the same report, 70% of businesses that did not have an ecommerce website were expected to have an online presence by developing a website by 2019.
While B2B Ecommerce is still at least a decade behind B2C Ecommerce in terms of product availability for sale on the web, the reality is that B2B Ecommerce is twice the size of B2C Ecommerce in terms of absolute revenue. In 2017, B2B ecommerce sales in the United States were anticipated to exceed $900 billion, compared to $453 billion for B2C ecommerce.
However, B2B purchasing and selling are often more complicated. There are more decision-makers and influencers engaged in final purchase choices, frequently higher price points, a broader selection of products and specifications, and a plethora of competing sales channels, both traditional and digital. Additionally, B2B consumers may have varying demands at various points of the customer decision process. Necessitating a multichannel strategy that may involve, at times, digital-only engagements.
The sell side is preventing the industry from seeing even more spectacular growth. According to Forrester Research, 38% of business buyers now make more than half of their work purchases online, and more than 55% of purchasers will do so by 2020.
Why aren't more B2B buyers purchasing online at the moment? The solution is astonishingly simple: the businesses from which they wish to purchase do not sell online! Retailers are dragging B2B merchants into Ecommerce. Every retailer who is a customer to the wholesalers, expects to have seamless order processing. No retailer wants to spend hours and manual labor while placing an order, processing it and finally receiving it. A retailer, like any customer, expects to place an order with ease, just like how customers shop seamlessly from Amazon with easy and straightforward steps.
Retailers are now pushing for change! With millennials and Gen Z entering the B2B marketspace, this younger generation expects anything but outdated, inadequate methods and processes while placing an order with a wholesaler.
Comparing B2B and B2C Digital Quotient scores across the four dimensions of various business components, we realized the underlying practices for each dimension. These underlying practices are as follows:
When it comes to the strategy of B2B businesses
B2B businesses lag behind B2C businesses in terms of how they use digital tools and information to develop a strategy. They frequently distinguish between overall strategy and digital strategy. Only 10% of B2B businesses rank digital as a top three investment priority, around half the average for B2C businesses.
As a result, digital initiatives are often dispersed across organizations rather than being implemented clearly and fluidly. Surprisingly, less than 24% of CEOs grasp how technology is disrupting their companies. Furthermore, just 6% of B2B organizations have a mobile strategy, compared to 30% of B2C enterprises.
Organization beyond traditional organizational frameworks
The majority of B2B companies have made no real initiatives to organize their organizations around digital technologies and data. The average DQ score for organizational maturity was 27 (compared to 35 for B2C companies), placing it in the range of laggard companies across our global sample and indicating a struggle to advance digital initiatives.
Only one in every four businesses said that their leadership communicates their digital strategy effectively, and the majority reported misunderstanding around digital responsibilities and ownership of digital activities. One explanation for the fuzziness is that we discovered attempts to create measures for the efficacy of digital activities were significantly lower than those of B2C organizations.
Deficit skill set capabilities
With a lack of strategic focus and organizational discipline, it's unsurprising that B2B businesses lag behind their consumer-facing counterparts in terms of digital skills. They are not as effective at reaching out to clients via social media or digital content development.
Additionally, they lag in terms of data and advanced analytics. This is demonstrated by their failure to provide great customer experiences across channels. This problem is exacerbated when clients express a preference for electronic interactions. The data-analytics divide also manifests itself in B2B firms' capacity to automate decision-making.
B2C businesses were able to automate, and hence improve, customer interactions throughout the purchase experience, as well as automate marketing decisions. B2B organizations have mostly automated internal procedures rather than customer-facing ones.
Foundation of B2B businesses in their work culture
B2B firms, on an average, fall behind their B2C counterparts across cultural DQ dimensions in important areas like trust and internal and external agility. In other words, entrenched cultural obstacles should not obstruct B2B digitalization. However, there is a significant divide between leaders and laggards, as well as several prominent pain concerns.
15% of businesses use test-and-learn techniques for new digital business initiatives and that 1/3rd of B2B organizations take more than a year to deploy a new digital concept. Fewer B2C businesses demand that level of delivery time!
Many B2B companies have not yet had to contend with these changes outright, but they need to study and learn from their B2C counterparts. Disruption is upon our industry and ignorance is not an excuse for inaction.