B2B businesses are beginning to explore the possibilities of digitally enabled business. What will this mean for manufacturers, suppliers, retailers and consumers? Jonathan Wright introduces our latest Research Report.
Is B&Q a B2C or a B2B retailer? To judge by the advertisements that crop up during Grand Designs or Location, Location, Location, it’s a DIY behemoth targeting those who want to posh up a bathroom or a bedroom at an affordable price. Yet, through its TradePoint scheme, which offers building contractors perks such as cheaper prices, special counters that are open early to late and expert services, it also operates in the B2B sector. This is just one example of how, in the digital age, the B2B and B2C sectors are blurring.
To take another example from the DIY sector, a company such as Johnstones Paints often offers trade-style discounts to regular customers who may not work in the trade but are decorating their own homes. Then there are the luxury brands that routinely sell direct to consumers via the web, as well as supplying retailers and selling via company-branded outlets and concessions. Some of these luxury brands, it might be added, came late to direct selling and so are focusing on tablet devices, because that’s what their consumers use to shop rather than PCs or laptops. It’s a changing landscape that’s throwing up new opportunities, new challenges and, perhaps most importantly, new ways of doing business for both B2B and B2C companies. For this reason, the next Research Report from Internet Retailing will focus squarely on theB2B sector.
BACK TO FRONT
At the core of the report lies the idea that an activity once considered to be part of backoffice activity – that is, the sourcing of products and the whole business of getting goods from suppliers to customers, whether directly or via stores – is now a key consideration in the emerging world of omnichannel.
This is having profound effects on the way the supply chain functions. Think of something as ‘simple’ as product photography. In a bricks-and-mortar store, it’s possible to put an item on display. It doesn’t matter that, say, a small and specialist supplier may not have the marketing budget to pay for highquality images because consumers can see and touch the company’s wares.
But as soon as this becomes a digital transaction, photography becomes a key consideration. It doesn’t matter how good the product is if it looks shabby because of poor imagery. Supplier and retailer may need to work together to ensure this doesn’t occur. Plus the supplier may conclude that, if it’s got to pay for better imagery anyway, why not use that imagery to help it sell direct too? Solving a ‘simple’ problem, supplier and retailer move to competitors who also cooperate.
The wider point here is that such scenarios will become increasingly commonplace. This means senior executives in both B2B and B2C companies need to think deeply about how they do business, and be prepared to adapt to a fluid, rapidly changing marketplace. If that sounds daunting, it’s because it is, and the specific challenges that face different companies will vary according to such factors as the digital maturity of different sectors and consumer behaviour.
However, certain themes and key questions will recur. In particular, the world of omnichannel is one where transparency trumps all. Already, consumers routinely check prices across different websites. That doesn’t mean they necessarily buy at the lowest price, although this is a key consideration, it means they’re checking out the offering of different companies. In doing so, they’re balancing such factors as, yes, price but also the reputation of different retailers; whether there’s an extended warranty as John Lewis routinely offers; and, if they’re ‘showrooming’, weighing up such factors against the convenience of just buying an item because they’re in the shop – possibly at a discount after pointing out the item is available cheaper elsewhere.
Now imagine this kind of behaviour extended down the supply chain, because that’s what’s already happening. Any B2B company focusing its energies on a hugely detailed trade catalogue in such an environment while neglecting the digital realm is, at the very least, missing a trick and possibly about to hit real problems.
NEW MODELS
But while acknowledging that each and every company always faces its own unique set of problems, the report will also look in detail at key concepts that cut across different sectors and markets. As well as B2B and B2C, this will mean considering such concepts as:
B2B2C: the idea that brands maintain contact with consumers through the transaction. This will often involve suppliers partnering with service businesses or solution providers and using digital channels.
B2SME: developing specialist business models such as targeting different sectors, for example, TradePoint or the way Staples tailors its offering differently to small firms buying office supplies and individual consumers.
BfromB: closer integration between suppliers and retailers through the supply chain in arrangements that help both to grow.
PRACTICAL ADVICE
As well as offering a strategic oversight of how the B2B and B2C sectors will evolve in conjunction with each other in the years ahead, the report will offer insight from companies sharing hard-earned expertise on practical issues:
How to help consumers who wish to connect more directly with suppliers and manufacturers.
Approaches to the inevitable tension between cooperation and competition as retailers, wholesalers, brands and manufacturers all chase sales – is it possible to manage relationships here in ways that grow the overall sales pie and benefit different parties?
How to manage and improve the day-today working relationship between suppliersand retailers.
What can the B2B sector learn from the B2C sector – and vice versa?
What are the most urgent challenges facingB2B businesses?
PARTNERS
Internet Retailing’s partners in this research report are:
Digital River offers revenue growth through global cloud commerce. Digital River’s solution combines the power of its worldclass commerce platform with the most effective business processes and services to grow clients’ business – all in an outsourced solution. The company’s specialties include ecommerce solutions, global payments and cloud based billing, strategic e-marketing services, physical and digital product fulfilment, fraud management, export controls and tax management.
www.digitalriver.com
EPiServer AB is a leading supplier of solutions that enable true web engagement and drive business results for end customers. The EPiServer platform is delivered through an extensive network of more than 690 partner companies in 30 countries. EPiServer combines the stability and support of a commercial product with EPiServer World, a thriving developer community of more than 20,000 developers.
www.episerver.com
NetSuite is the leading provider of cloudbased business management software. NetSuite helps companies manage core business processes with a single, fully integrated system covering ERP/financials, CRM, ecommerce, inventory and more. By using NetSuite to automate operations, streamline processes and access real-time business information anytime, anywhere, growing businesses realise breakthrough performance improvements.
www.netsuite.co.uk
IN CONCLUSION
A summary of the results will be published as a two-page article in a future issue of Internet Retailing and a standalone Research Report on B2B will be available to download from the Internet Retailing website. The report launch will be followed with a dedicated B2B briefing in the spring. If you want to contribute to the research report, please email jonathan@internetretailing.net.
