As the end of Q1 looms near, we have some predictions about how the rest of 2020 will shape out. Our new guide, Five Disruption Distributors in 2020 details upcoming disruptor impacts and offers guidance for turning challenges into opportunities. Here’s a taste of what you’ll find inside.
#1 – B2B marketplaces are inescapable
A new study by iBe TSD Ltd, found B2B marketplaces could reach $3.6 trillion in the next five years, making up 30% of all online B2B sales by 2024. Business buyers use sites like Alibaba and Amazon Business for easy access to pricing, clear information and comparisons. We value these things in B2C. Businesses are as savvy as consumers.
Broad B2B marketplaces like Amazon Business are only part of it. Niche B2B marketplaces are growing. In 2020 Predictions for eCommerce Forrester noted, “Buyers will begin to prefer marketplace buying for a wide range of products ranging from equipment used for maintenance, repair and operations, to networking equipment and scientific supplies.”
Manufacturers are jumping on the bandwagon, too. Distributors are unhappy. We understand the angst. B2B buyers can now easily bypass distributors. Someday B2B marketplaces could carry all your products, deliver faster, reach a larger audience and collect more data than you can. But this disruptor is a chance to adapt with a strong marketplace strategy. Industry expert and President of Real Results Marketing, Ian Heller, explains, “You can’t stop marketplace erosion throughout the industry, but with the right plan, you can stop it in your business.”
B2B marketplaces are here to stay. Our guide will help you rise to the challenge.
#2 – Hiring digital talent won’t get any easier
Even though unemployment is down – according to the U.S. Bureau of Labor Statistics, it’s reached a 50-year low at 3.5 percent – finding digital talent is tough. Candidates are quickly swooped up by competition.
Yet digital talent is a must-have. Forrester predicts U.S. B2B eCommerce will hit $1.8 trillion by 2023. Digital technologies like eCommerce are on the rise because customers want to do business differently. But with digital technology, comes the need for digital talent to keep things running. Digital technology is changing most industries, so you’re competing with a lot of companies.
Distribution is not typically the first industry new graduates seek out. Distributors must be creative about where they recruit and make vacancies seem more attractive than the jobs competitors are trying to fill. According to Digital Commerce 360’s Mark Brohan, “It’s still a candidate’s market for qualified executives with the right skill set in B2B eCommerce. The right candidate for any eCommerce job may, in fact, be juggling multiple offers.”
And once you acquire digital talent the cost of retaining them is higher than ever. According to research by Bernhart Associates, the average annual salary for a VP of B2B eCommerce and a VP of digital marketing in 20 of the largest U.S. cities are $221,400 and $232,800 respectively.
Planning to find and retain the best digital talent is challenging, but we have tips for getting the job done.
#3 – Growth, consolidation and forced evolution
Independent distributors go regional, then mini-national, then global. The big guys get bigger. Distributors are growing organically or through mergers and acquisitions.
Bigger distributors will continue buying smaller ones. Private equity firms will always snap up companies of interest. Distribution companies are attractive because of economies of scale.
Consolidation is good for growing geographical reach and branding, reaching new customers and discovering bigger audiences. Growth equals lower overhead and bigger distributors have more power in negotiation, access to cheaper products and more credit.
Consolidating comes with some bumps in the road, but we’ll help you navigate the path to the big leagues.
#4 – Data can’t be ignored
Salespeople must adapt. Analyzing and understanding data is critical. B2B sales focuses on the customer, adds value and generates new business.
The selling process must be strategic and driven by data. Successful distributors will leverage data, identify trends and focus on their customers’ buying behavior to target the most relevant products for them.
Distributors have a wealth of information. Invest in a data analyst and good analysis tools to mold your data into something useful for your business. Then, motivate your salespeople to offer creative and strategic selling based on that data.
#5 – Customers want new technology
Your customers expect convenient and quick access to your catalogs and a seamless ordering process – on their terms. If you don’t offer this, they’ll go to a competitor who does.
This change has been coming for years. Companies like Amazon have set a standard for customer experience in B2C. Now, B2B buyers expect the same. Generational shifts play a factor in driving these demands. According to Merit, by 2025 millennials will form 44% of the U.S. workforce and 73% of millennials are involved in B2B purchasing decisions. Millennials are a digital generation.
Now the buying process is about self-service and discovery. According to Forrester, 68% of B2B customers prefer to self-serve and complete independent research online. Buyers are still combining traditional and digital sales channels, though, so you need a new strategy for including new technology in your existing customer experience.
If these insights have piqued your interest, read our full guide for more details about the points and predictions we’ve covered here.