It’s time for industrial e-commerce

Few markets are measured in trillions of dollars, and are expected to have a 20% compound annual growth rate up to 2030. Yet business-to-business digital commerce (B2B e-comm) remains on the rise. Its $17.9 trillion global market value amid the COVID-19 pandemic is five times larger than that of B2C.

Still, B2C e-comm sets the standard for how B2B transactions are managed. Comparatively, most B2B e-commerce experiences lack the engaging features and ease of use we’ve come to expect from consumer e-comm.

In the online B2C market, Amazon controls nearly 40% of all sales.  No company has done more to reinvent the way we shop. Millennials have come of age with Amazon boxes peppering their doorsteps, and they comprise the majority of today’s digital-savvy shoppers. They carry those high expectations of digital shopping experiences into B2B e-com.

For dramatically underserved submarkets of B2B digital commerce, like industrial e-commerce, adapting to the needs of today’s digital-first shoppers is a tall order. The route to a completed transaction is made all the more tortuous because most large B2B transactions are executed on credit using prenegotiated terms. Those rates and negotiations present an upfront acquisition hurdle and a barrier to switching. This has often added up to less than-stellar B2B shopping experiences.

Already, 83% of all B2B buyers prefer to order online, and millennials expect even more capabilities beyond a digital shopping portal.  According to a recent study by DemandGen and the MX Group, 60% of millennials choose vendors based on their ability to specify and configure a solution, while 51% want to see detailed specs before they make a purchase. 

Now that millennials are the organizational access point for 44% of B2B purchases, it’s become clear that the traditional sales model many industrial organizations use is outdated. Self-navigating the purchase process has become the norm for 65% of B2B buyers, according to Gartner, and that number shows no sign of shrinking. Modern e-commerce has laid the foundation for scalable, streamlined and traceable purchases. Now, industrial vendors must adapt if they expect to win deals.

Salesforce’s State of the Connected Customer report shows that 88% of customers rank the experience a company provides as equally important as their products or services. However, the further we move from selling simple products, like a box of paper or an office chair, the harder digital commerce becomes. This is especially true in the industrial marketplace, where information is scarce, the market is global and intellectual property must be protected.

B2B shoppers deserve a better digital commerce experience — one that matches the ways they do business throughout their organizations. The market is ready, but why aren’t industrial companies?

The industrial business is complex — that’s no longer an excuse

There’s no denying that the problems industrial organizations face in adopting digital commerce are complex.

Where do you go for replacement parts for a robotic surgery arm? What happens when you need a rotation gearbox for a restoration vehicle during a natural disaster? How do you compare connectivity and return speed options on satellite uplink for an ultra-low-latency application? Who offers specialized geolocation data for offshore wind provision?

These questions don’t make for the easiest online searches. Traditional search engines aren’t built for the complexity of B2B needs. The pandemic drove the shift to online purchasing and forced the market forward, and industrial customers have followed suit. It’s no surprise that courier services provider DHL predicts that 80% of B2B transactions will be processed through online platforms by 2025. 

However, effective industrial e-comm solutions go beyond buying and selling in online marketplaces. They must encompass all aspects of the customer journey, leveraging technology to provide a seamless customer experience across every touchpoint.

That has led complex product providers to believe only low complexity goods can be sold online. That’s not only wrong, but it’s dangerous thinking, too. Thirty-five percent of buyers report they will spend over $500,000 in a single online transaction, and 97% of digital leaders predict online orders will become larger and more complex in the next 2 years. That will make B2B digital commerce table stakes for industrial organizations to survive.

Deploying industrial e-comm at scale isn’t out of reach for industrial organizations — but it does represent a shift in the target operating model, roles and practices they employ. Rather than treating an industrial e-comm platform as a single solution, companies must integrate systems across finance, service management, customer support and more to design a holistic digital commerce experience. Developing a comprehensive solution starts with examining business complexity, customer experience and modernization through a new lens.