We’re running a series of pieces looking ahead to the first InternetRetailing Events B2B Summit, to be held in Berlin in January.
Today we hear from Jonathan Newman, CIO and VP ecommerce and marketing operations at Office Depot Europe on how the B2B sector is progressing the task of digital transformation. This is the first part of a two-part interview.
InternetRetailing: At the InternetRetailing B2B Summit, you’ll be taking part in a panel discussion around the pain points of the changing sales process and digital transformation in B2B. Firstly, can you tell us how the challenges in selling online in B2B are different from B2C trading?
Jonathan Newman, CIO and VP ecommerce and marketing operations at Office Depot Europe: I think the difference is that as a consumer you’re buying for your own use. When we understand your browsing behaviour, your preferences, the products you respond to and don’t respond to we have a really interesting profile of your personal preferences and then how to influence based on those preferences.
In a B2B context you’re buying as part of your job. You might be an office manager buying stationery for the whole workplace. Your own emotional response to the product, and some of your preferences are overridden by company policy and technology decisions. You’re not shopping because you’re a consumer and you want to consume but because you have a work task to complete.
Secondly, there will be constraints applied to your decisions on budget, delegation of authority on what you can and can’t select because of the work environment. I think understanding that and bringing it to life as a meaningful, consistent, multi-touchpoint digitised journey has been that much more difficult for the B2B world. The technology is there and the maturity of capabilities is such that it’s within reach and best practice is emerging. Companies are starting to act on that and they are able to deliver it.
IR: In your experience, how far along the line to digital transformation is the B2B sector?
JN: I think the transformation of B2B is lagging behind B2C. B2B is a more complicated beast and having that continuity of experience across all the different touchpoints is a little harder to achieve. That said, I think that’s changing rapidly and it becomes more pressing now than ever.
Business-to-business relationships are inherently company-to-company relations but each company consists of people who have preferences at a personal level. Those preferences need to be viewed in the context of the business-to-business relationship with that company. Trying to get that balance right is challenging, and then distinguishing not just the company but also the user consistently across the various touchpoints gets complicated.
B2B typically has pre-negotiated assortment agreements. Being able to materialise that online is complicated, to make sure that when a customer is searching a large catalogue they’re only seeing products they are entitled to buy.
When you want to sort a catalogue of 100,000 products, and you’ve got 100,000 customers, and each one of those products can have a unique price, that exponentially increases data and complexity. This is no longer the technology challenge it once was but it has been a problem and slowed digitisation of the B2B sector.
IR: Tell us about one or two particular challenges or pain points that now face businesses in this area as they move established business processes online, and how are companies such as Office Depot responding to those challenges?
JN: The identification of the person and the person’s intent in the context of their company and their company’s relationships with you is very complicated. We find that the answer to that lies in understanding the data. We’ve spent time trying to consolidate and harmonise data across our various touchpoints. We know a lot about businesses and we know a lot about the customers that we’re sending catalogues or other print marketing to. We know a lot about what’s happening in our call centres and on our websites. We’ve been focusing and stitching that together.
As we do that personalisation becomes a key capability that helps to drive that digital experience for our B2B customers. We’ve gone from some fairly simple personalisation based on large lookalike segments and groups, to the point where we believe that in 2017 we will get to real time true one-to-one context-based personalisation. In that evolution we’ve gone through a number of steps. It’s been an interesting transition for us and one that’s probably been the key area of interest and investment for a couple of years now.
IR: What one or two benefits, perhaps unexpected, have companies such as Office Depot seen as a result of this change?
JN: We expected to see improvement in conversion rate, improvement in category and cross category penetration with an increased share of wallet and increased loyalty. We expected to see those things and I think there are still opportunities in those areas.
But one example of something that surprised us a little was when we optimised the experience for some of our most frequent visitors and most valuable customers. We gave them short cuts to their most frequent processes and tools so that they were the first thing they saw when they logged in. Doing this we reduced their time on the site, reduced their need to call us to fulfil their need and then reduced the time it takes to solve their problem using our online tools.
That sounds counter intuitive – a lot of companies would see increasing time on site as a good thing because it exposes product that browsing more we’re able to push towards them. But as a B2B user you’re on a site doing your job, and if doing your job takes five minutes rather than 10 you’re inherently happier. We didn’t set an objective to reduce the time on site but we’ve seen that with our most frequent users that by making it easier and reducing their time on site we haven’t impacted their frequency but we’ve given them time in their day. I think that was a benefit we didn’t target but that has helped us with customer satisfaction.
Part two of this interview will run next week.
Jonathan Newman will be discussing digital transformation in B2B at the InternetRetailing Events B2B Summit in Berlin in January. Contact Lee Price (Lee.Price@internetretailingevents.com) if you’re interested in applying to attend.
