- 28% of respondents said that over 50% of their revenues come from the online channel.
- 31% of respondents said direct sales are still driving most revenue, but online is growing in importance.
- 80% of respondents agree that customer expectations have changed due to B2C/retail practices.
- 80% of respondents said that they invested in their commerce platform in 2012.
While it may yet be a few years before B2B supply chain networks are totally disrupted, we can already see the first signs of disruptive changes. Three major players have already made some critical moves. For example, many traditional and standard industrial goods can already be purchased on the Amazon Supply platform. Google is developing a powerful marketplace for B2B companies to search for product alternatives. And Grainger has become a very large B2B sourcing platform, and is well-recognized as one of the most user-friendly B2B sites.
What are the critical implications for B2B and industrial firms?
- Conduct a deep customer segmentation process based on user needs and what they are looking for through each potential trade channel.
- Address the role of e-commerce platforms in their current business models. It is inevitable that e-commerce is going to be a prevalent force in the B2B world. Oracle reports that 26% of B2B respondents said that mobile web /apps influence revenue the most.
- Be ready to solve channel conflicts quickly as B2B buyers have more choices in the market and faster ways to source standard off-the-shelf products.
- Be equipped with price intelligence technology to be able to respond to price pressure and price matching requests, the importance of which has been underscored by recent acquisitions by The Home Depot and McKinsey (more on these in an upcoming blog post by the authors).
- Have candid and realistic internal discussions on what might happen when Amazon Supply starts offering a large portion of your products online at a potentially lower price. How do you prepare for it? How do you react? What comes next?
Stephan Liozu (www.stephanliozu.com) is the Founder of Value Innoruption Advisors and specializes in disruptive approaches in innovation, pricing and value management. He earned his PhD in Management from Case Western Reserve University and can be reached at email@example.com.
Alexander Rink is the CEO of 360pi, the leader in delivering price intelligence to help retailers right-price to increase their revenues and margins. A veteran entrepreneur, technology executive and former management consultant at Bain & Company, Alexander is an INSEAD MBA, with an Engineering degree from the University of Waterloo. He can be reached at firstname.lastname@example.org.