7 Differences Between B2B and B2C eCommerce
Are B2B and B2C Converging?
Lately at Insite we’ve seen a dramatic increase in the number of articles and individual viewpoints proclaiming the “convergence of B2B and B2C” where eCommerce is concerned. While there are certainly aspects of B2C eCommerce that enhance the B2B customer experience, the fundamental purpose of B2B is much different than that of B2C.The idea that B2B companies must mirror B2C experiences in their entirety is creating expensive, if not dangerous, misalignment within B2B eCommerce initiatives. To create the best B2B eCommerce experiences, we need to focus on the areas in which B2B diverges from B2C. We must build commerce engines that support the unique complexities of B2B, not try to force B2C characteristics onto a completely different process.
The Similarities Between B2B and B2C
It is important, however, to acknowledge that on the surface there are areas where the two buyer experiences do converge. Regardless of whether we’re selling directly to a consumer or to another company, users want an intuitive, easy to navigate experience. Robust, well-designed website taxonomies and multiple points of access are important features no matter the product being purchased.
The rise of Google and other advanced search algorithms have raised the bar for search capability, which effects how users search for both products and content.
Auto-complete, spell check, and fuzzy search are just a few aspects of search that users have grown accustomed to across all experiences.
Product imagery is another area where B2B and B2C commerce needs are similar. B2B buyers and B2C shoppers alike have grown accustomed to multiple angles and views of the product. Application images, 360° rotators, and even videos help further the buyers’ or shoppers’ interest in a particular item. In fact, product imagery can often be the deciding factor in many sales decisions.
And, of course, every eCommerce system needs to provide a user experience that is familiar, whether it’s incorporating best practices around menu structures and labels, or using the commonly recognized icon for a shopping cart.
B2B companies need to create an experience that is relatable to their buyers’ world, both professionally and as an individual consumer. At a top level, a B2B buyer needs to seamlessly and intuitively navigate the fulfillment, or shopping cart, the process in much the same manner as a consumer on a retail eCommerce site.
It’s Essential to Recognize the Differences Between B2B and B2C
By not recognizing that convergence ends here, B2B companies can expose themselves to failed project development efforts, increased chances of expensive re-platforming, and unhappy customers.
As a company with solutions specifically Built for B2B™, we know how costly eCommerce project misfires can be, particularly when they stem from the incorrect assertion that B2B and B2C needs are highly similar.
Why is this happening, and why have these convergence messages proliferated? Many eCommerce companies built for retail are hugely incentivized to force B2C eCommerce processes into a B2B environment. They have made large investments in eCommerce features built for B2C. They may not have fully evaluated the needs of the B2B user personas, or the complexities of a sophisticated B2B ordering process. Quite frankly, retail B2C eCommerce providers are rushing into a B2B market based on the opportunity of what will likely be a trillion-dollar market by 2020. Unfortunately, their slick marketing promises are failing to deliver in the complex, highly customized world of B2B.
When we examine this problem, we realize that the fundamental purpose of the B2B buying experience is very different, and therefore the mechanics of the experience is different. This results in major divergence, not convergence, between B2B and B2C eCommerce systems.
The 7 Major Points of Divergence Between B2B and B2C
1. B2B buying scenarios are complex and customized.
In B2C the customer experience is typically one too many. One consumer making a decision based on many different choices. Most consumers buy in the same way and follow the same types of processes.
B2B buying experiences, however, are incredibly complex and vary widely by industry, product, company size, and business operation. The B2B buyer is often not really the buyer at all, not in a traditional sense at least, but a procurement expert hired to execute a previously negotiated contract. Those contracts contain specific pricing and promotion agreements for each individual customer. The relationship is many to many; many people, many channels, many products, and many different contractual agreements.
A retail eCommerce solution built for B2C requires major, expensive customizations to map the right processes for each unique engagement scenario native to the B2B world.
Here’s a great example: Consider employees or procurement specialists fulfilling an order on behalf of a branch or job site for replenishment of consumables. They would rather not need to search through every single item manually again, whether by clicking through multiple levels of taxonomy, or performing a search and filtering through a large number of results.
Instead, they want to enter a product identifier (usually a UPC, Model number, or any combination of unique identifiers) into a quick order pad; submit the quantity needed for multiple line items, and with one button click add all of them to a cart. Once in the cart, contract pricing and quantity discounts are automatically applied, and the order is submitted within seconds. Better yet, the procurement personnel may have started a spreadsheet of needs over the past few days or weeks. From there, an order can be uploaded and the B2B eCommerce site can automatically parse it into the cart.
2. Multiple shipping locations, will-call pickup branches, and billing accounts are involved.
The nature of B2B means that businesses can be both customers and sellers. While a B2C transaction usually includes just one seller, one buyer, and one payment type (credit cards), B2B transactions involve any combination of Bill-To accounts. These accounts include unique pricing agreements and ship-to locations that encompass many warehouses or job sites.
Orders may even involve will-call pick up at any number of distribution centers in a given area, or across multiple states. Furthermore, many B2B transactions aren’t transacted on credit cards, but rather via a line of credit or purchase orders. The majority of transactions are also invoice-based, rather than point-of-sale purchase.
3. B2B’s “many-to-many” relationships create complex customer interactions that B2C transactions simply don’t have to worry about.
Accounting or payables departments may want access to download historical invoices or pay outstanding balances while a job site foreman may want to check delivery status. The procurement manager needs a proof-of-delivery to close out an order.
These are just a few examples of the myriad of business and operation scenarios that are unique to the buying cycle of B2B commerce. In fact, the differences between B2B and B2C commerce often comes down to the stakeholders involved. The relationship is many to many; many solutions, many buyers and influencers, and many different contractual agreements.
A retail eCommerce engine requires lengthy customizations to be able to map the right processes for each unique buying scenario and in many cases, it simply doesn’t work.
4. Impulse buys are nearly irrelevant in the B2B world.
Most B2C eCommerce engines are built to encourage the sales-generating practices of brick and mortar shops. In other words, they’re designed to create impulse buys that add additional revenue to the initial sale. This is the world of retail, the world of add-on purchases, flash promotions and other enticements to sell more than the consumer originally set out to purchase. Retail eCommerce engines are built to reinforce the impulse buy, and it’s an incredibly valuable feature that drives a heavy return on investment.
However, the ability of a typical B2B buyer to act on impulse, or to respond to a digitally-motivated desire is low, if not non-existent. B2B buyers are trying to fulfill a business need, so there is no significant ROI for these kinds of mechanisms. B2B buyers rarely work outside of a predetermined procurement workflow that cannot incorporate impulse buying or add-on merchandise outside of application or installation-based needs.
Trying to realize revenue advantages from this component of an eCommerce engine is a fruitless enterprise in most cases. It’s important to note that B2B commerce experiences do benefit from other merchandising experiences such as kitting, bundling, customizable products, and the like. Often specific parts or items may need additional components for installation, depending on the application. With kitting or bundling, suppliers can offer all that’s needed in one single “add-to-cart” mechanism, with or without a pricing incentive over having separate SKUs.
Customizable products, where extensive choices exist from dimensions to color and finish options, are also a merchandising win for B2B commerce experiences. Instead of a buyer navigating a complex listing of multiple finish and size combinations, one single product detail page can provide the ability to select and change options, offer real-time pricing updates or supply the option to submit for a quote. For most buyers, the latter scenario is a much more desirable experience.
Consumable items or commonly re-ordered items are also common in many B2B buying scenarios, whether an item is used frequently, or needs replacing periodically. In these types of scenarios there are different merchandising mechanisms that can be beneficial for B2B sellers like quick order pads, reorders from past orders, and/or subscription purchases.
While the first two are self-explanatory, subscription ordering is becoming a much more common option and in fact there are multiple benefits to subscription ordering: a buyer doesn’t have to be reactionary in their ordering, can sometimes benefit from a subscription price discount, and will be less likely to be stuck waiting for replacements before work can continue.
For the seller, automated repeat business and increased customer loyalty are highly advantageous as the marketplace becomes more and more crowded.
5. The B2B buyer does not respond to traditional digital marketing tactics.
In the world of B2C, conversion is king. Heavy investments are made in creating engines that increase and optimize conversions during the customer experience.
In B2B experiences, the ability to optimize conversions is often hindered by traditional contract relations or legacy ordering practices. Either the product is already contracted at a certain price, or it’s simply the question of finding the lowest price for a commodity product.
Extraneous capabilities like merchandising and shopping analytics that work well to motivate the individual consumer and increase the size of each purchase, are simply unnecessary, if not burdensome, overhead in the B2B world.
However, there are still plenty of best practices that aren’t necessarily B2C-focused, but rather commerce-focused. While price competition is always a force in any form of eCommerce, B2B eCommerce players provide a strong value proposition that combines deep industry knowledge, well-honed experience, and personal customer service. Some customers will always be attracted to the lowest price, but in the complex world of B2B, there is always more value to be found within the customer experience beyond mere price.
6. B2B has unique differentiators that drive buyer loyalty based on experience.
While some traditional digital marketing tactics may not be as successful in B2B, many factors beyond service have an impact on the B2B buying cycle. Differentiators like negotiated pricing or preferred vendor status for procurement are often major drivers, and making it easier to do business with you how your customers want to do business, by offering the most comprehensive online experience and advanced purchasing options like PunchOut and automated order processing from emails or faxes are all value-driven differentiators customers notice.
7. The underlying purpose of B2B eCommerce is entirely different.
To ensure that B2B eCommerce is providing a strong return on investment, we need to remember that the largest economic opportunity in B2B eCommerce is efficiency, not additional sales. A retail eCommerce engine is built to maximize the purchases of each individual customer.
An eCommerce engine specifically built for B2B must accelerate the productivity of every single person involved in the buying experience. In other words, B2C is built to maximize the needs of the seller.
The right B2B eCommerce solution should maximize the needs of the buyer. This is realized in many forms, not the least of which is time saved on the customer side by making orders and self-service tasks easier to do from anywhere, at any time.
Conversely, the time savings realized by B2B sales and customer service arises from not having to facilitate routine tasks like reorders or search for order status. This helps CSR’s, sales and others spend more time helping introduce new solutions to existing customers, or finding and assisting new customers.
Are there some ways in which B2B and B2C are similar? As we’ve discussed, the controls and general navigation must be relatable. Best practices must be incorporated in terms of the look and feel of the screen they see in front of them. But that’s where this so-called “convergence” ends.
B2B eCommerce is driven by the need to take complex business processes and data from the back office and expose that information in a user-friendly experience. Those business processes and data must drive that experience, or the B2B eCommerce initiative will fail. Trying to force a B2C eCommerce experience into a complex B2B buying environment is, in our opinion, irresponsible at best.
Bonus: But what if I’m a Manufacturer or Distributor who Wants to Sell Directly to a Consumer?
For manufacturers and distributors considering a B2B eCommerce solution, it is becoming more common to incorporate the requirements of a B2C experience as well. In this scenario, it is important to define what is truly meant by “B2C”.
In many cases, the application ends up becoming closer to a B2b (“B to little b”) scenario. In the B2b scenario independent contractors or smaller businesses often don’t have pre-negotiated contract prices, aren’t regular customers, or don’t have a line of credit. These buyers are often utilizing the public-facing B2C experience because, for many, the B2C experience is focused on the ability to accept credit card transactions. These types of customers still benefit greatly from specific B2B commerce experience points, such as expanded specs (dimensions, MSDS information, material composites, etc.) that can be leveraged from the existing B2B commerce infrastructure.
Additionally, these customers may have found your offering through more traditional digital marketing tactics such as paid search, price-based shopping ads, emails, or others, where the needs are more similar to a “B2C-type” experience. These customers may eventually convert into a more traditional B2B-type account, but a more B2C-type experience as the first touchpoint has built important awareness of the brand and its offerings.
As a result, they may end up shifting more of their online business to that seller. For manufacturers selling directly to consumers, being the “source of truth” when it comes to product information is a unique value proposition.
Many consumers will look to manufacturers’ websites for definitive answers and information on products, accessories, and components they manufacture. Capturing consumers who wish to purchase directly from the source, whether that’s the original product or genuine replacement parts, is a strong motivation for manufacturers to develop a B2C experience, while still leveraging the information from their B2B commerce and other back-end systems.
The fact of the matter is that this B2C experience is essentially just another channel within your current offering and fulfillment chain. The rich integration work required for a best-in-class commerce experience that’s already wired for a B2B commerce platform can easily be leveraged onto a B2C instance. Real-time availability or volume based pricing adjustments are already integrated into your B2B commerce system. If the choice is to include a B2C experience running off the same commerce platform, those adjustments can be seamlessly reflected across both experiences.
In our newest Wholesale Distribution eCommerce Success Story, we heard from Macpek, a leading distributor of heavy-duty vehicle parts and car wheels. Steven Wark, Information Technology Director at Macpek shared how Macpek has experienced success since the...
Small distributors have a massive advantage over their bigger competitors where data-driven marketing is concerned. They just have to follow some simple steps to building a centralized data source.
It’s a common misconception that distributors must buy a massive, powerful tech stack to manage every aspect of the enterprise, including B2B commerce. Instead of helping them compete, tech stacks often bury small to midsize distributors in integration and management overhead.