Justin Main is Vice President of Integrated Payments for Billtrust, a B2B accounts receivable automation and integrated payments leader.
Some may be surprised to hear that B2B e-commerce is growing at over twice the rate of its B2C counterpart. With so much written about the latter’s tremendous growth—especially this time of year when the excitement of the holiday season drives even more interest in the space—you’d be forgiven for being unaware. But the truth is, the size of the B2B e-commerce market and its potential impact on the global economy should really be driving more headlines.
Roughly $84 trillion worth of B2B payments switched hands in 2021, according to Juniper Research, a substantial portion of which undoubtedly stemmed from sales made through e-commerce platforms. In fact, a recent study conducted by Billtrust found that demand for e-commerce options in B2B has enticed 88% of the wholesale suppliers surveyed to deploy an e-commerce solution. And since deploying these solutions, these suppliers have watched their revenue grow by an average of 49%.
It’s safe to say that B2B e-commerce’s growth is playing an enormous role in the movement of a historic amount of cash between businesses. But what’s changed?
The Impact Of Covid-19
Over 90% of B2B service provider respondents across industries report that they’ve experienced an uptick in e-commerce usage since the onset of Covid-19. This has brought us to a stage where U.S. B2B e-commerce sales are expected to cross the $1 trillion mark for the very first time this year, before catapulting to an anticipated $1.8 trillion in 2023.
This represents a dramatic surge for an industry that prior to the pandemic was not expected to reach either milestone for a number of years. But what changed during Covid-19 to instigate this e-commerce boom?
When disruptions in the supply chains, challenges to logistics, and slow-moving cash threatened the financial health of buyers and suppliers during Covid-19, e-commerce offered new pathways for them to pursue consumer-like digital experiences. Moreover, with the pandemic leaving an indelible mark on the sales industry as almost every facet of business shifted online, e-commerce provided a way to reach and serve customers from afar.
But this isn’t to say B2B’s long-standing tradition of in-person meetings and securing deals with a handshake is outdated. Rather, e-commerce is enabling buyers to quickly and seamlessly place repeat orders with just the click of a button, which is massively contributing to the space’s growth trajectory. This means that once a supplier and a buyer establish a relationship, e-commerce crucially helps them to automate and streamline future orders.
So even though Covid-19’s peak has passed and some organizations have returned to the office, all signs suggest e-commerce will continue to solidify itself as a preferred sales channel for suppliers and their customers.
The Amazon Effect
B2B buyers’ priorities have certainly shifted. Those personal relationships that not too long ago drove B2B sales are no longer a top priority for many. Rather, according to Billtrust’s latest data, many of these service providers now rank shipping speed, availability and price as the most important factors when choosing a supplier.
These are ingredients of an e-commerce experience that are vastly similar to what they expect in the B2C world. Indeed, it’s becoming increasingly clear that B2B buyers’ rising expectations of brands outside of work are having a dramatic impact on who they do business with in their professional lives, too. These are expectations that can be traced back to one company: Amazon.
From the digitization of sales to customer experiences, Amazon has had an undeniable effect on how businesses operate and how people obtain products. All of which are heightening the importance of B2B e-commerce. If the everyday consumer is doing it, the B2B world can surely adapt.
But transitioning to e-commerce doesn’t mean abandoning customers—it means bringing them down the path toward the future of business. E-commerce has the potential to expand businesses’ outreach and actually can help them adhere to the transformation of buyers today.
The Emergence Of A New Generation Of B2B Buyers
With Amazon research finding that nearly three-quarters of business buyers today are millennials, digital natives are ushering in a new era for B2B sales. In particular, the emergence of this generation as key decision-makers is revolutionizing the supplier-buyer relationship, given these relationships are now almost entirely started—and nurtured—online.
In fact, 60% of B2B buyers surveyed by Billtrust say that their supplier’s e-commerce experience is “very important” to their relationship with the supplier. Meanwhile, 67% report switching to vendors that offer a “more consumer-like” experience.
These statistics help illustrate that selling online in B2B isn’t just in high demand, but it’s also under the microscope. How easily suppliers enable their customers to access and purchase their products and services is becoming a key competitive differentiator, and the reason why many B2B buyers choose to return to a specific supplier or not.
What Does This Mean For B2B?
With the trends and technology always advancing, it can be difficult for business leaders to decide what direction to take. However, the data shows that businesses even beyond Amazon are excelling following their adaptation to e-commerce. In doing so, businesses can differentiate themselves through e-commerce just as much as they can expand their outreach with it.
Whether through e-commerce or an approach that brings similar outcomes, it’s more than clear today that to succeed, businesses must implement new ways to offer their products and services in ways that fit the needs and expectations of today’s buyers to a larger audience. The common outlook that the future of shopping is online is no longer fitting. Shopping both exists and is taking place online now and at rates higher than ever before. And, with the new generation of buyers, businesses must put in the extra work to upscale their digital transformation and distinguish themselves from the competition.
But, what will come after e-commerce? That’s up to the next generation.