By Bridget McCrea
The numbers are in and all signs point to a future saturated with business-to-business (B2B) e-commerce sales. Following in the footsteps of its business-to-consumer (B2C) cousin, B2B e-commerce is quickly becoming the shopping and purchasing method of choice for a wide range of buyers—including your customers. From electrical contractors to electricians to building owners who need equipment for upgrades or new installations, virtually everyone is firing up their laptop, tablet, or mobile phone to research products, connect with distributors, and make purchases.
In its US B2B eCommerce Forecast: 2015 to 2020 report, Forrester forecasts U.S. B2B e-commerce to grow from $780 billion in 2015 to $1.13 trillion in 2020. That means that within five years, e-commerce will constitute 12.1 percent of the total $9.39 trillion B2B commerce market in the U.S. At the same time, e-tailing behemoths like Amazon Business are infringing on electrical distributors’ turf and large distributors are honing and refining their already-mature e-commerce offerings. Lastly, mobile e-commerce (or, m-commerce) – driven by the consumer who has grown more comfortable making purchases on smartphones and other mobile devices – is on track to hit $700 billion by 2017, according to research firm Digi-Capital.
“As e-commerce continues to grow and evolve, it cannot be business as usual for industrial distributors,” said Jamar Cobb-Dennard, a sales and marketing expert in Indianapolis who has designed and executed sales and marketing strategies for numerous companies, in a recent tED magazine article. “To compete in the 21st century e-commerce marketplace, they need to implement a number of strategies – with thought and integration – into their traditional sales and marketing efforts.”
E-commerce is Serious Business
The problem is that setting up and running an e-commerce store isn’t a core competency for the typical electrical distributor. And what may have started out as a pet project for the owner’s nephew or daughter—setting up and orchestrating the distributor’s website, and now it’s online e-commerce store—has since become serious business.
“It’s no longer enough to set up a little ‘web shop’ in the corner and hope that it covers the e-commerce bases,” says Justin King, senior partner with B2X Partners in Ashburn, Va., and founder of ecommerceandB2B.com. “E-commerce needs to be treated as a strategic initiative just like it is in the retail environment, where companies are using it as a transformation vehicle for their overall organizations.”
That advice is solid, but the question is: Who will be charged with initiating, setting up, and maintaining/updating this “transformational” vehicle? The outside salesperson who is on the front lines with the customer? The inside salesperson who is taking care of customers in person, online, and on the phone all day? The marketing coordinator whose desk is already laden down with enough projects to last through the rest of 2016? Or maybe a combination of all three? These are the questions that distributors are asking themselves as B2B e-commerce becomes an increasingly important aspect of their day-to-day business operations (and bottom lines).
Unfortunately, these questions aren’t easily answered. “If you look at the traditional distributor or manufacturer right now, there are no resources inside of those companies that understand [e-commerce],” King notes, “or, they understand very little of it; maybe just enough to get by.” This isn’t always the distributor’s fault either, says King. The best digital/e-commerce experts are probably working for a large agency or a cool brand…and not necessarily interested in the B2B side of the equation.
“These folks are making 6-figure incomes at large companies, and aren’t generally working for small or regional distributors,” says King. “This can make it very difficult to draw any solid talent to design and run your e-commerce site.” Making the situation even tougher is the fact that the best e-commerce experts tend to focus mainly on B2C commerce, and probably aren’t even working for small digital agencies.
The Gap Doesn’t Discriminate
The talent gap isn’t limited to any specific industry or company size. “There’s no doubt that IT hiring challenges are one of the biggest, and most quickly accelerating, industry trends keeping CIOs on their toes,” writes CIO Magazine’s Sharon Goldman in IT Talent Gap an ‘Existential Threat’ in Need of New Tactics.She notes that the 2016 State of the CIO survey found that 49 percent of CIOs expect to experience IT skills shortages in the next 12 months, while the Harvey Nash/KPMG CIO Survey 2015 discovered that nearly six out of 10 CIOs believe skills shortages will prevent their organizations from keeping up with the pace of change — one-third more than just three years ago.
“The trials and tribulations of tech hiring get constant press. The Boston Globe, for instance, wrote recently about the escalating issues in this area among Massachusetts technology teams,” Goldman writes. “Starting salaries for software developers right out of college, the article reported, can soar to $90,000, while those same employees may get as many as 20 recruiting calls a day to get them to jump to another company.”
The good news is that the distributor that makes an effort to create an e-commerce team—or, hire one particularly talented individual or agency—will see the rewards of those efforts. According to Accenture, the longer an organization has been dedicated to e-commerce strategies, the more successful its online channels are today. Fifty-five percent of “digital-first” B2B organizations (those that began focusing on e-commerce five or more years ago) report that more than half of their customers currently complete transactions online, compared to only 22 percent completion for “lagging” firms that began focusing on e-commerce less than three years ago, Accenture reports.
“As the ease and convenience of the B2C e-commerce experience wins over B2B buyers, the adoption of seamless online B2B buying is steadily reaching a tipping point. Investing in strong B2B commerce experiences is paying off,” says Bob Barr, Accenture Interactive’s managing director. “[Our] study found that the maturity of B2B e-commerce platforms correlates directly with having substantially higher sales.”
In part II of this article we’ll explore some of the strategies that electrical distributors can use to fill their e-commerce talent pipelines and create effective online stores for their B2B customers.
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McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.
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