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When digital trading platforms started gaining in prominence and market share, many people believed that brick-and-mortar companies were doomed. That the future belonged solely to digital trade. As with most predictions, the reality was far more complicated and lay somewhere in the middle.
The establishment of giants like Amazon, Alibaba and some smaller platforms has paved a major highway for digital trade, but the future held something more than just a single global warehouse connected to an online store. The future was hybrid.
Marketplaces in the B2B market
The history of B2B commerce revolves around trust-based relationships between the buyer and the seller. The reasons for this are more or less self-evident: the goods are complicated in nature or in distribution/shipping processes; support from the seller or producer is often required more so than in B2C; provisions and prices vary from deal to deal; advice and recommendations are often more helpful than in the consumer market.
B2B marketplaces have been showing Compound Annual Growth of +10% (CAGR), an indicator of healthy development. Standards for B2B convenience are also rising: 82% of B2B buyers now desire the corporate purchasing process to be more in line with the comfort and convenience of B2C. The features that have defined the online mass consumer market are integrating into B2B via platforms and marketplaces. Dynamic listings, an individual approach to customers, fast communication and support etc.
The B2B buyer generation is shifting, as even in 2015 almost half of B2B purchasers were millennials (Google studies) and that percentage is sure to have increased. This corresponds with the change in customer demands and perception of how sales should be done. Convenient, streamlined, empowered by choice… that is how modern B2B buyers see the future of the market.
The market is also quite optimistic in its expectations, as 41% of online B2B traders project considerable online market growth, looking at the data available to them (BigCommerce survey). New platforms are joining established ones and new features appear in this field on a regular basis.
From ‘brick and mortar’ to ‘click and mortar’
The term ‘click and mortar’ first appeared during the rise of dotcoms, yet has gained in prominence once more in modern days. As the B2B and B2C markets grow closer in sales methods, consumer expectations and digital tools, the combination of the “personal touch” (or business support) and online convenience becomes more important.
As we try to predict the future, we tend to fall into the pitfall of simplifications and generalized dichotomies: that’s why at one point it seemed that business had to become either completely physical or completely digital. According to Forrester research, 74% of B2B buyers research half or more of their purchases online. Even the relatively traditionalist area of B2B is on a fast track to the online trade world. Yet the reality of even the largest platforms like Amazon shows a digital storefront backed by physical infrastructure.
In an increasingly digital era, there’s a certain value to having physical operations where clients can receive personal support, negotiate deals, visit partners, etc. Yet, the digital component had become a critical necessity. That’s why ‘click and mortar’ marketplaces are becoming more prevalent.
They present various digital tools to combine the best of both worlds.
Perks and features of B2B platforms
Speaking of tools, an important aspect of platforms and marketplaces is how they empower all sides of the trade equation:
● The buyers - through payment safety and choice variety
● The sellers - through digital tools and trade opportunities
● Large businesses - in finding great value from procurement
● Smaller and medium businesses - in finding new markets and clients
BigCommerce studies cite seller reputation and price as the two most dominant factors in making purchasing decisions (once initial contact is established) at 53% and 47% respectively. On the seller side, businesses that attain B2B sales through their websites, 71% of surveyed representatives stated that intuitive site navigation was the most important tool in customer conversion, while 47% of sellers also focus on payment options for their customers as a vital business process.
Marketplaces often provide a superior experience on all four counts: they provide transparency in reputation on the platform; prices naturally become more competitive through variety; payment safety and choice is often a priority for B2B marketplaces; the process of attracting clients for sellers becomes easier as platform navigation and user experience are improved.
Technical support and trade assistance are also a vital focus of digital B2B sales.
A survey by DigitalCommerce360 shows that 57% of B2B executives consider their primary technological need to be an ecommerce platform. This corresponds to why companies are looking to move to ecommerce systems: user experience and addressing customer needs. BigCommerce research for 2018 clocked in customer acquisition and user experience as the top (combined) trend for the B2B market.
In both aspects, digital tools have proven to be far superior to older manual methods.
Challenges and solutions, strategies for further growth.
Most marketplaces are already looking towards the future as they implement their digital features: client acquisition and onboarding, intuitive UI/UX design, online tools for communication and contract creation etc.
However, not all marketplaces are created equal. When deciding to move your business into such an ecosystem, it’s important to evaluate the available options. Some questions to ask yourself are:
● How safe are my operations on the platform in terms of payment and fraud-protection?
● Does the platform offer any sort of analytics that can help me with general business goals and evaluation?
● What is the international reach of the marketplace?
● What are the ethical guidelines and values of the platform?
● What’s the support system like? What are the hours (24/7, 9-to-5, etc)?
● Does the marketplace invest in long-term functionality and features?
Some B2B marketplaces have gone further than just comfort and basic functionality. They look towards future strategic needs: namely, business growth of sellers and market satisfaction for buyers. This is why strategic goals are such an important focus for the most innovative platforms on the market.
The newly launched Tradalaxy for example, not only provides the standard host of important features (buyer/seller choice, convenience of use, payment safety etc.). It also emphasizes FTAs (Free Trade Agreements) as a way to empower both sides of the B2B transaction. The marketplace’s Trade Assistant provides analytics and data to help local businesses formulate export/import strategies and launch in external markets.
With shifts like these, it is becoming evident that digital tools are reaching into areas of strategic growth and development, affecting economies and trade at a more fundamental level.