If you are a B2B business, should you rent or own an e-commerce platform ?
E-commerce channels are digital real estate. And just like tangible real estate, you can rent or you can own. A major dilemma most B2B organizations go through while planning to launch a digital channel is deciding on the right e-commerce solution strategy.
We know the B2B vendor market is still in its infancy and no single platform can meet the needs of every B2B industry. Hence, among the many criterias that businesses apply while platform shopping, evaluating the platform for key B2B specific functional requirements should top the list. Vetting the platform based on functional requirements will give a clear indication whether you should rent a pre-built vendor solution or custom build one and own it.
It is important to emphasize the functional requirements because businesses are often tricked by vendors that the platform is customizable to meet functional needs but in reality adds to much complexity, as good as building it custom.
10 Key B2B Requirements That Drive Business Decision
1. Corporate Accounts
Unlike B2C, where consumers are the people shopping on the site, B2B buyers are part of an organization buying for the companies. Typically, it’s not a single buyer who makes the decision to buy, there usually is an hierarchy of people involved in making buying decisions. The solution being vetted should meet this basic requirement where corporate accounts are supported along with defining different levels of roles and permissions. Technically, many companies also go one ahead and want their procurement systems integrated with the platform to enable seamless ordering, approvals and invoicing.
2. Buying Behaviour
In B2B, spontaneous buying is rare, rather most buying is planned ahead of time, usually involves buying large quantities of same products. They need to have multiple ways to create and place orders such as — re-ordering previous orders, quick ordering by uploading a list of products as a file. Some features to enable these types of ordering involve creating and storing multiple product lists which can be swiftly converted to orders.
3. Quote Management
Large enterprises typically do not place orders before negotiating the commercial aspects, they go through a quoting process where they initiate a quote request by adding the products to the quote. Only when both parties agree on the commercials, the quote is converted to a purchase order. The e-commerce solution should have a robust quote management module with seamless communication between two parties involved. Many large manufacturers also use complex CPQ systems in the backend which do the heavy lifting of quoting process, the e-commerce solution integrate with the CPQ system to enable the entire quoting life cycle.
4. Workflow Management
Purchasing, especially in large companies, follows defined processes and responsibilities in the buying center. Digital commerce systems should support these in the best possible way. Many organizations deal with cost centers & budgets which requires them to create a workflow model with defined hierarchy of approval/rejection mechanism.
5. Complex Product Structure
Products in B2B can be very complex and product catalogs can be vast. The more complex a product is, the higher the need for flexibility in creating custom product catalog structure in the digital commerce systems. More often, B2B organizations retain their master catalog data in legacy PIM or MDMs which needs a seamless real time integration with the commerce platform with richer merchandising capabilities.
The more complex a product is, the higher the demands on the quality of product data in an online procurement platform. Product data is an important driver for sales; the better its quality and the more attractive the products are presented in the platform, the better the data will support important functions such as search or cross-selling recommendations.
6. Quick & Simple Search
B2B buyers want simple search engines in online procurement platforms, since highly regular customers usually search by product number (EAN). Nevertheless, retailers should offer their customers an intelligent search function that can handle different types of search queries which requires the commerce platform to support AI based smart search features or support an integration with cutting edge external search engines.
7. Custom Pricing
Besides specific ordering processes, in B2B each corporate customer usually has a pre-defined negotiated price point for the products. As such, the commerce platform should be able to support multiple price lists per B2B customer. Also calculation of prices for products in B2B differs significantly from B2C, pricing for bulk orders is calculated on the basis of scaled prices, which in many cases are also individually discounted. Smart algorithms need to be built within the solution to calculate very complex prices accurately and in real-time.
Even though at a nascent stage, B2B customers eventually expect a personalized procurement experience. Typically most vendor B2B platforms restrict personalization to basics like custom catalog and custom pricing, beyond that there are different levels of personalization such as proving a customised site experience or even providing a separate microsite branded with customer’s branding and styling.
9. Traditional Payment Options
Traditionally B2B payments have been invoicing, advance payments, credit limits, direct debits, POs, wire transfers etc.. Online B2C payments where you have CC payments and other wallet based payments, commerce platforms need to support this traditional payment methods to ease the overall payment transactions & financial reconciliation processes.
10. Purchase Touch-points
While personal contact with sales staff remains the number one buying channel in B2B, the number of purchases performed online is constantly increasing. This also applies to B2B procurement, where the systems of sellers and buyers are seamlessly connected. The strategy for B2B sellers is to provide a platform which can seamlessly integrate with buyer’s procurement systems. Mechanism’s like punch out solutions already exists and supported by many vendor commerce platforms, one level up, further evaluation is needed to see if the platform can support automation of the business processes in purchasing through multiple touch-points.
As mentioned earlier, there can be many B2B specific features depending on the segment to which the seller belongs but there is ample evidence that every B2B seller requires the above set of minimum basic requirements to be met natively in the solution.
Markets and customer requirements in B2B are constantly evolving. Vendor based digital commerce systems that used to work in the past without being extended are now reaching their limits. For a solid B2B strategy, businesses have to base their solution decision based on the core functional feature support with added flexibility of extending the solution.