From: Pavlos Tsulfaidis
Date: 04.04.2016
Amazon would not have been able to achieve such outstanding results without opening its Marketplace, as this allowed it to expand product selection, pricing and superior customer experience without the limitations of warehousing and logistics. In the meantime, many brick-and-mortar retailers have followed suit and launched their own Marketplaces to strengthen their position and expand their multichannel offerings.
As Alibaba's phenomenal success has made clear, this trend is becoming a significant threat to B2B companies. Whether they are middlemen or manufacturers of their own products, the rise of e-commerce and the service of pure players is fundamentally changing their business. B2B buyers, purchasers, and all responsible parties in a company for purchasing equipment or services have an entirely different set of expectations as a result of B2C e-commerce. They now expect a tailored omnichannel buying experience where selection, price transparency and service should be comparable. Online marketplaces can help serve this.
Many retailers eager to secure a share of the B2B market are now adopting the new model. Staples, one of the leading retailers of office supplies, has given its Marketplace, founded in 2014, a key role in its e-commerce strategy.
In addition to the generalists, we are currently also seeing the establishment of specialized marketplaces that aim to establish themselves as 'one stop stores' for clearly defined markets. Marketplaces are indeed particularly suitable for niche markets or vertically oriented industries, as they can offer an extremely broad and deep range of products and at the same time bring together the crucial groups of buyers and sellers. Unlike generalists, vertical marketplaces offer shopping experiences related to the specific sector.
How can this new model work in a B2B framework? What are the challenges B2B companies need to address to succeed in the marketplace revolution?
B2B e-commerce adapts to new expectations
B2B buyers are changing the rules of the market by doing their research and purchasing online. According to Forrester, all B2B retailers surveyed consistently indicated that the most important growth driver is online sales, and nearly 50% of companies with an Internet store estimate that half of their customers will switch fully or partially to the Web channel in the next 3 years. This movement is expected to gain speed as a new generation of purchasing managers, who already feel at home in e-commerce, enters the market. In addition, the traditional "customer service" approach, as well as extensive product sheet offerings, will be replaced by the importance of algorithm results and search engine recommendations.
Surveys of buyers confirm that B2B buying behavior is increasingly aligned with that of B2C buyers. 49% of key B2B buyers prefer B2C websites for their purchases, according to a survey by Accenture, and 52% plan to make more than half of their purchases on pure-play e-commerce platforms in the next three years. Expectations for smooth processes and ease of shopping are so high that 56% of shoppers said they would pay up to 30% more to get a better online experience.
Marketplace can help B2B merchants adapt to new requirements
In the face of new demands, retailers have made extensive investments in maximizing the online experience to offer B2C best practices as well. It is little wonder that Amazon has become the reference model for B2B vendors building a sales channel in e-commerce, but the challenge is how to implement The Long Tail in different categories.
For a distributor, a Marketplace can be a good tool to solidify relationships with supplier companies. Most B2B dealers do not offer a supplier's full catalog, but select parts to offer. When a retailer opens its Marketplace, it can offer suppliers an additional sales channel for all its products without having to buy them. Integrating a partner can go further than simply importing the product catalog. If the supplier has a recognizable brand name, the retailer can set up an extra area in the Marketplace where the supplier can offer products under its own brand.
A Marketplace can also be an excellent lever to drive the integration of online and offline offerings. With the accelerating convergence of physical sales and online sales, shoppers now expect a coherent offering across all channels. A growing number of brick-and-mortar chains, such as Staples in the U.S. or Retif in France, have decided to open marketplaces alongside their e-commerce offerings, as the online offerings would otherwise be less significant than the brick-and-mortar stores.
Summary
You can be sure that traditional B2B commerce constraints will be completely transformed and Marketplaces will be the main driver of these changes. The future leaders in B2B commerce will be those who stand out from the crowd with such a model by serving the upscale demands of B2B buyers.