In the early 2000’s, many traditional brick and mortar retail companies moved their customers’ shopping experiences online. While some were more successful than others, this shift to a digital B2C buying experience was a massive trend as retailers struggled to not only remain relevant, but survive. Some, like Barnes & Noble, missed the boat entirely while brands like Macys are keeping their head slightly above water.
In an effort to create new revenue streams, many well-known B2C brands are now gearing up to enter the B2B online commerce space. Office supply giants like Staples and OfficeMax/Office Depot, have focused their efforts on vertical industries, targeting schools and universities with robust online ordering experiences. Staples in particular has been able to grow its B2B eCommerce business significantly, reporting in 2017 that this particular revenue stream accounted for more than 60% of the brand’s total sales.
For midsize distributors, the B2B eCommerce play made by highly recognizable B2C brands who have spent decades building awareness and loyalty, can be disconcerting. Many of these brands have thousands of followers on social media, further creating familiarity among B2B professionals researching and buying within a particular market space. In our third disruptor in the series, we examine how these “new” players in the market are creating massive disruption as B2B buyers may decide to give their “old friend” a try.
If the moves by brands like Staples and OfficeMax/Office Depot weren’t unsettling enough, smart retailers are also creating huge commerce hubs to compete with traditional distributors. Ace Hardware, for example, created TheSupplyPlace.com as a B2B commerce site to connect schools, government agencies, and small businesses with their local Ace store as well as the brand’s company-wide inventory. The commerce hub is heavily optimized to attract online buyers. The transparent pricing and “helpful hardware store” branding is convenient and familiar and so far, Ace has moved in on this distributor market in a big way. Other B2C brands have noticed the success of Staples and Ace, and are following suit by making plans to attempt to cash in on the lucrative B2B commerce market.
To combat this disruptor, small to midsized distributors need to remember that despite brand recognition, B2C retailers struggle to provide a strong hybrid commerce experience because they simply do not understand the complexity of the B2B buying cycle. In many cases, these brands gain initial traction, and yet ultimately fail because they cannot adapt to the needs of a multi-person buying cycle with its complex logistics, delivery and support needs.
Distributors can rely on the fact, as the Wall Street Journal reported last year, that digital customers are far more fickle than traditional brick and mortar customers. Although they may lose a purchase or two from buyers intrigued by their old friend entering the market, it’s important to remember that retailers often regard B2B commerce as merely a shopping cart, or at best a website. They don’t have the knowledge or experience to deal with common characteristics of B2B commerce like custom catalogs, complex procurement processes and the need for a hybrid full service, online customer experience. By focusing on providing a strong, efficient commerce experience for every person involved in the B2B cycle, distributors can win back or compete against these retailers very handily. In fact, their status may be elevated as customers return to the “fold” with a better understanding of the quality of experience that is only delivered from a commerce environment that is truly built for B2B.Learn how Insite Software can help you compete against big brands with digital commerce solutions packed with native B2B functionality
Distributors may also be able to siphon off new business as a result of the increased attention brought on by some of the B2C brands’ massive marketing engines as they enter the B2B market. In many cases, these marketing programs increase interest and organic search traffic. Carefully watching the data-driven practices of a better-known brand is not that hard to do – and can provide some easy tactics to test and possibly adopt.
In the end, a flashy brand will never be able to stand up against a distributor as long as they have a robust, efficient B2B commerce experience; one that is focused on increasing the productivity of every person in the complex B2B buying cycle and closes the information gap. Recognizing the heightened competitive environment and making data driven marketing decisions is key to survival when it comes to this disruptor. Speaking of, next week we’ll dive into our final disruptor in the series: how modern data-driven marketing is disrupting the distributor market, and of course, ways to take advantage of that disruption.