The domain of B2B ecommerce is one of the most dynamic and lucrative sectors of the global economy. According to Forrester Research, ecommerce statistics for 2018 indicate that the total sales of B2B ecommerce hit an all-time high of one trillion dollars.
The most important reason behind this is the widespread impact of digital technology on conventional business models. By leveraging technology, an increasing number of people are starting their B2B ecommerce companies because for such ventures they do not need to have large capital, or human resources to become entrepreneurs.
This is an interesting development because compared to B2C, the B2B ecommerce sector was slow to develop and grow. Here is a look at some of the most viral ecommerce stories from the last year that took the internet by storm.
Ecommerce 2018 Story # 1: Essendant Bought out by Staples
Essendant is one of the top B2B ecommerce distributors, specializing in both office and industrial products. Staples, on the other hand, (acquired by Sycamore Partners last year for a mammoth $6.9 billion), is a giant player in the office supplies distribution sector, as well as, catering directly to consumers. Its B2B ecommerce portals include StaplesAdvantage.com and Quill.com, while the B2C portal is Staples.com.
The acquisition, valued at $996 million, will be crucial in helping Staples realize its vision of expanding its distribution capabilities across different regions. Previously, Staples bought out HiTouch Business Services, giving the company an entry point into the lucrative IT products and services categories. With ecommerce statistics indicating that online commerce is set to grow exponentially in the coming years, the acquisition of Essendant makes even more sense.
This is because Essendant offers a host of services enabling various ecommerce retailers to use their own sites to sell various products. For Staples, this acquisition brings it a step closer to realizing its vision of becoming a dominant entity in the B2B ecommerce sphere.
For Essendant, given the ecommerce statistics predicted for the next few months, the acquisition means a greater chance of providing office and industrial goods to both businesses as well as end consumers.
Ecommerce 2018 Story #2: Back to Business initiative by Amazon
Of its many ventures, Amazon Business has undoubtedly proven to be a huge success for Jeff Bezos’ brainchild. From what has become an annual campaign for Amazon, the focus of Back to Business is to further increase the customer base for Amazon Business.
The level of prominence that Amazon is offering to Amazon Business is interesting. With different Amazon initiatives vying for exposure on the company’s main website, the Back to a Business campaign is enjoying a banner ad promoting the deals on offer. As per B2B ecommerce experts, there is a very compelling reason as to why Amazon is pushing to add to its customers and sellers database on Amazon Business.
More than 63% of B2B ecommerce companies hold the opinion that having an online ordering system is a necessity today for them to remain competitive, as this has become a top customer demand (source: 2018 Manufacturing & Distribution Sales and Technology Report).
The benefit of registering on Amazon Business is that buyers enjoy access to specialized pricing arrangements with credible office product sellers as well as business-related IT products. Therefore, buyers know they are getting the best possible prices for quality products. Keeping in view the statistics for the B2B ecommerce sphere, the focus on expanding Amazon Business’ base is an excellent decision by the world’s largest ecommerce player.
Ecommerce 2018 Story #3: Coca-Cola Taking Advantage of Ecommerce
One of the world’s most valuable and recognizable brands – Coca Cola – is also utilizing B2B ecommerce to maximize its sales with the least amount of investment. Traditionally, the company relies on its army of sales representatives to ensure that profits continue increasing despite competition.
However, given the current ecommerce statistics, Coca-Cola was quick to realize the added benefit that ecommerce can offer in increasing sales while minimizing costs. The company is currently training its sales force to use ecommerce to acquire customers who do not buy in bulk, and therefore, the cost of making in-person calls does not make sense in such cases.
The biggest fear of salespeople is that if they rely too much on technology, they will lose their jobs to automation. Before pursuing B2B ecommerce strategy, it was crucial that the company highlighted the benefits of using B2B ecommerce tools to their sales force. Now, by taking advantage of call centers, the sales representatives are finding it easier to schedule appointments, set up meetings and reminding customers to close the deal.
The idea behind this combination strategy was to develop synergy between the skills of their sales force and the capabilities that technology offers. Through B2B ecommerce tools, Coca Cola’s sales force is able to segment consumers and decide which touch points will be the most helpful in signing up new consumers.
In the coming years, there are plans to increase ecommerce usage so that even more cost reduction is possible.
Ecommerce 2018 Story #4: More Warehouses as Ecommerce Booms
As per ecommerce statistics, by the year 2020, there will be a demand for almost 184 million square feet of warehousing space by online traders and distributors. This makes sense because as the volume of online sales continues to grow, there will be an increasing demand for space where products can be stored before shipment.
Not only that, but to ensure efficiency and save time and cost, the demand of ecommerce players will be for automated warehouses that keep tabs on inventory, and have the ability to process and dispatch orders according to a specific schedule. Keeping both of these developments in focus, it is only logical to conclude that the cost of warehouse space will be on the rise.
The problem, especially for B2B ecommerce companies (since their products are of larger sizes), is that warehouses built decades ago lack features such as high ceilings and large loading bays, both of which are essential now, for automated order processing. This means that new warehouse constructions are no longer optional, but are essential if the ecommerce boom is to continue.
This also has long-term implications for online merchants. As commercial warehouse space becomes scarce and the number of customers grows, ecommerce firms will need to decide how best to select a warehouse space depending on their business model and needs.
For instance, if an online merchant has to choose between an automated warehouse in the suburbs versus a decades-old warehouse at the heart of a commercial district, it may very well choose the latter one, if the bulk of their customers reside within the city. Keeping up with ecommerce statistics currently available, online traders must prepare for a drawn-out battle for warehouse space with other online businesses, as well as traditional manufacturing companies.
Ecommerce 2018 Story #5: On-Demand Manufacturing Marketplace Model of Xometry
Since its inception in 2014, Xometry is well on its way towards creating a profitable on-demand manufacturing marketplace. One aspect that differentiates this B2B ecommerce company from all others is that until now, the on-demand marketplace model was predominantly only for B2C ecommerce portals.
Within a short span of four years, the company has expanded to include more than 2,400 manufacturing enterprises and close to 10,000 customers. Xometry is working as a B2B ecommerce platform that is connecting people in need of products – manufactured with very precise specifications – that are not available elsewhere in the market.
Perhaps the most interesting aspect of the kind of business model that Xometry is using is that it is providing services, not just to other startups or small enterprises, but to full-fledged large-scale companies as well, such as BMW and NASA. The USP of Xometry is that it provides access to customized products that suit a niche need of customers.
Of course, due to the nature of the services that Xometry provides, the B2B ecommerce software that it uses is very sophisticated. The process starts with a quoting engine which allows people to input data about the kind of product required, including possible materials/ingredients, exact dimensions and if there is a requirement for a particular kind of finishing treatment to the product.
For this to be possible, customers, uploading information, must have access to Computer Aided Design (CAD) software, which creates a digital prototype of the product they want. Once this information is available to Xometry, its software processes the data to calculate an approximate price for the product that a customer wants.
After this, Xometry’s software will send this order information to a manufacturer (registered on its network) who is most likely meet the customers’ requirements, leaving them the choice of accepting or declining the order. In addition to simply linking manufacturers catering to a niche in the market, Xometry is also offering its registered manufacturers to easily purchase technology hardware and software they need for their operations.
There is no question that with ecommerce statistics expected to rise, the scope of Xometry’s services will continue to increase, as more manufacturers and customers with specific needs will sign up with the company.
Ecommerce 2018 Story #6: Boeing Leveraging Online Commerce for More Business Volumes
Even though Boeing has been in the B2B ecommerce sphere since 1996, the launch of Modification Marketplace last year completely changed the role of technology in their domain. Before the launch of Modification Marketplace, customers of the company relied on paper-based catalogs to see the Boeing products, features, prices and order times.
With an automated version of the paper catalogs, customers now have access to instant information about the availability of specific parts and retrofit features they are searching for, as well as price adjustments and updates about order shipment and delivery times. Through its subsidiary Aviall, Boeing offers everything from tyres, aerospace chemicals, spare parts, machinery as well as different types of engine and machine oils.
To provide a more customer-friendly experience, Aviall even has a mobile app, which people can use for an instant, comprehensive searches for products they need. They can also track their orders. Such a personalized experience for customers is not usually the kind of service that B2B ecommerce companies offer. Yet, Boeing is becoming a pioneer and deriving profits from it. The ecommerce statistics show that customers tend to prioritize user-friendliness during supplier/manufacturer selection as well as order processing.
Another Boeing subsidiary, Inventory Locator Service is also taking advantage of B2B ecommerce tools to automate order placements and deliveries of aerospace spare parts and related products and services. With the automation, it will be a less time-intensive endeavor to look for and order the aviation product that a customer is looking for. If ecommerce statistics are anything to go by, providing this ease to customers will definitely give Boeing a distinct edge over all competitors.
This brings us to the end of this article. We hope you have gained valuable insight into the stories of the top B2B ecommerce companies and how they have evolved with time. If you think we have missed out on a company you know of, please tell us in the comments box below.