B2B e-commerce has considerable potential for growth. What distinguishes it from B2C?
When it comes to presenting our e-commerce business, we often highlight our references in the luxury, fashion and retailsectors i.e. our B2Creferences. It makes sense as they are better known and more impressive. However, in the field we are seeing growing demand from B2Bcompanies of all sizes which want to have an effective e-commerce website. I have identified 3 major areas which characterise B2B e-commerce projects.
This appetite has been confirmed by a recent Fevad (the French e-commerce and mail order federation) study which predicts that B2B e-commerce will grow by more than 30% in France by 2020. Indeed one figure struck me and confirms B2B e-commerce's potential: the share of purchases made on an e-commerce website by French companies is only 3%. This is 10% for U.S. companies and 15% for German companies. In France this proportion increases with the size of companies, which suggests that B2B e-commerce has a great future, especially among very small businesses and SMES.
B2B e-commerce - different purchasing mechanics
We sometimes hear and read that B2B e-commerce has similarities with B2C e-commerce and it's true that they have things in common. Professional buyers are all consumers in their personal life, and like 36 million other people in France they make their purchases on the 200,000 e-commerce websites that the French web offers. They want to have the same experience when they are at the office. It is obvious that when you design a B2B e-commerce website it is useful to take inspiration from and adopt certain standards which have made B2C websites a success.
But when you look at this in more detail, you soon realise that there are significant differences. A B2B buyer is perhaps also a B2C buyer personally, but the fact remains that when they are in a professional situation the mechanics of purchasing are different.
The B2B buyer must respond to a request from their management. They are rarely on their own when it comes to the purchase decision. They will therefore take some risk and look for a supplier that fulfils various criteria: flexibility in terms of payment methods and deadlines, flexibility in managing returns, confidence in the quality of products, a guarantee in terms of delivery deadlines and a long-term supplier for theafter-sales service. Only then, will they be interested in the price positioning and make their purchase decision. They will be attentive to the effectiveness of the design and ergonomics of the website and the emotion generated by their user experience when making their purchase, but these criteria will not be the priority. The B2B buyer will need accurate and complete information about the product but also about the company, their expertise, their services, and on the sales and after-sales process, to be able to make their decision in a considered way. They will think as much about the link that they could create with their supplier, before and after the purchase, as the characteristics of the product. I remain convinced that this is much less so in a B2C context.
It is sometimes said that a B2B buyer buys with their head whereas a B2C buyer buys with their heart. That's a bit simplistic, but it illustrates the point nicely. This fundamental difference must be taken into account in the design of a B2B e-commerce website, and indeed how it is run. B2B has functional particularities.
When you develop an e-commerce website, you are essentially dealing with Products, Customers and Orders. In these 3 areas, B2B e-commerce projects have certain specifics.
Multi-user customer accounts
Unlike a B2C website, customers of a B2B e-commerce website are companies and legal entities with their own organisations. These companies must be allowed to have several user accounts (a different account for each employee authorised to purchase). Often we have to manage different rights for users and validation workflows: each user, depending on their role in the company (operational, purchasing, administrative) will have different rights; some users will be able to place orders up to a certain amount; above this limit, orders will need to be approved by their line manager.
Opening a customer account
On a lot of B2B e-commerce websites that we have developed, customers must be previously known to be able to browse the catalogue and place an order. Opening a customer account is not done online, at least not entirely or immediately. It requires a number of checks to be done by the selling company (business sector, legal structure, credit check) and configuring in terms of their Information System (creating a customer account in the ERP and/or commercial management, configuring the commercial terms and conditions, the terms of payment, etc). Only then can the customer account be created on the e-commerce platform and the first order placed. Depending on the case, this process can take several hours or even several days. There are solutions to get round these delays; we can for example authorise the immediate creation of a customer account on the e-commerce platform but demand payment by bank card for the first order while credit checks are done; we can also accelerate the process of creating a customer account with synchronous transmissions (webservices type) between the e-commerce platform and the IS, rather than exchanging asynchronous files, if the tools in place make it possible.
Products selection and customised prices
In B2B e-commerce, the Products selection may be different depending on the customer connecting: in the case of manufacturers who are selling spare parts or accessories, you need to be able to recognise the customer to offer them just spare parts or accessories adapted to their range of machines. Prices and terms of payment must also be adapted to the customer. Your B2B customers are often subject to customised commercial agreements, and these must be available on your B2B e-commerce website. In some cases we have to manage a customised price for each customer for each item in the catalogue. The volume of this matrix can quickly become problematic if it has not been planned for. In other cases it is complex pricing rules which make it possible to determine the price of an item for a customer and then you need to choose the best solution between duplicating these complex rules on the e-commerce platform or querying the ERP in real time to get the price of a product for a given customer.
Complex order process
Before ordering on your website, the professional buyer will very often need a quote. Making it possible to manage quotes and transform a quote into an order on your B2B e-commerce website can therefore be a highly appreciated feature. Some B2B e-commerce websites also offer expense budget management, i.e. controlling the amounts spent annually for each user, by department or by categories of products. The professional buyer will also tend to place orders regularly. It will therefore be necessary to facilitate their task by offering to manage their basket models, or even offering them a quick order form where you enter item references. Managing the payment is also a particular issue for a B2B e-commerce website as you need to authorise 'account' payments and manage the terms of payment negotiated with each customer; the customer's outstanding amount can also be controlled to know the order amount authorised.
This list of features which are specific to B2B e-commerce could grow longer. And when you need to choose the e-commerce platform which will be used for your B2B business, you need to ensure that it can address (natively or with some developments) these specific features. On this very subject, we are looking forward to the B2B module announced by Magento for its Enterprise 2.2 version which will be released very soon. The first presentations and our first tests suggest that it will cover a large amount of the specifics mentioned above.
To sum up, I see 3 fundamental differences between B2B and B2C e-commerce:
- The potential for B2B e-commerce use to grow in the years to come, particularly among very small businesses and SMEs.
- The expectations of the B2B buyer and the mechanics which guide their purchase decision.
- The functional particularities generated by the inter-company relationship.
B2B e-commerce projects are therefore very different to B2C projects, but they are just as exciting.
Author Eric Costechareyre, Directeur SU e-commerce SQLI