As part of SMITH’s ongoing research to better monitor market trends and validate our observations, our team conducted a survey of 200 B2B buyers and sellers on a range of topics, ranging from challenges they face in eCommerce transformation within their organizations to buyer-side issues faced by suppliers who don’t offer their entire catalogue online, and aren’t mobile-ready. The research summary is available for download here.
One of the key insights that we were able to quantify was how customers are, in essence, pulling their suppliers into digital transformation. In the gap between what customers want and what sellers offer, those who have rapidly adapted their offering are winning, and the rest are having their lunch eaten by someone else.
To set the stage, 92% of buyers prefer suppliers who sell online, and 90% are making digital purchases there. As an added incentive, 80% of these customers spend more money with sellers who are allowing them to transact online.
A range of factors are causing this shift, including the dominance of digital interaction in customers’ personal lives, but the key economic driver comes down to efficiency. Customers are researching
online. Products can be explored in depth with videos and reviews from other customers. Digital makes transactions more flexible with 24/7 purchasing. Transactions happen more quickly. Digital makes work easier for the customer, and customers won’t pick the harder route if an easier one can get them to the same destination.
North American brands are catching up to the customer, with 85% of B2B sellers transacting in some form online. However, the full transition is far from complete, and most are relatively new to the field, with only 34% of B2B brands carrying more than 5 years of online selling experience.
So what’s slowing everyone down? Respondents listed budget and time as the two largest impediments to ecommerce improvements. It’s positive to see that many are overcoming those hurdles, with 60% planning on budget increases in digital capabilities and 64% planning upgrades to their ecommerce platforms over the next 24 months.
While the online buying options from B2B brands are increasing, customers still aren’t completely happy: 70% of buyers indicate that there’s still “a lot of room for improvement” in how their suppliers provide online buying services.
The majority of companies only offer a subset of their product catalog online due to the challenges presented by their existing legacy systems. Only 21% of Canadian sellers and 32% of U.S. sellers have reached the point of making 100% of their products available online. Customers engaging with those who lack a complete online catalog may find the experience inconsistent as they encounter being able to only make some transactions online with their seller.
Moreover, many initial B2B ecommerce deployments have been developed on a limited scale to “test the waters” and often lack features such as contract pricing to ensure best-pricing or effective account integration. Taken together, these shortcomings paint a slightly different picture of digital readiness that indicates, while many are selling online, not many are masters.
As we will outline in our next Research post, one of the biggest challenges was a market shift that happened much faster than most anticipated: The Shift to Mobile B2B Selling.
For free access to the research summary, it's available here.