While certainly less visible than its consumer counterpart, it is estimated that the B2B eCommerce market is twice the size of the B2C. Online business to business sales in the US alone is projected to reach $1.1 trillion by 2020. Furthermore, the B2B eCommerce market is expanding at a rate significantly higher than the B2C.
Currently, online purchases are estimated to represent over 9.3% of the total business sales in the United States – a number set to increase substantially over the course of the next couple of years.
The figures are very similar on a global scale, where B2B eCommerce sales are forecasted to reach $6.7 trillion by 2020 while the global B2C eCommerce market is only estimated to expand to $3.2 trillion during the same period. Within the next five years, an astonishing 27% of all global B2B sales are projected to have an online component.
This trend is not at all surprising if we consider that, according to Forrester, B2B companies are able to cut their sales costs substantially (by up to 90%) by guiding customers to their online, self-service platforms instead of relying wholly on offline-only channels.
B2B is the new B2C
While B2B eCommerce is an absolute leader both in terms of expansion rates and realized revenues (or exactly for this reason), more and more online stores catering to a business clientele are starting to implement features and functionalities that have their origins in B2C.
Consumer-focused eCommerce companies such as Amazon contributed a great deal to technologies that define online shopping experiences of customers, such as sophisticated recommendation engines and other personalization solutions. Several studies have shown how such techniques can boost revenues, increase customer engagement and user experience. What is even more interesting, however, is that user themselves also seem to appreciate, moreover, demand such services to be present on the sites where they make purchases. According to Venture Beat, 77% of „digital natives” want personalized experiences online. And why would they set different standards for B2B eCommerce sites? After all, it is the same people making the purchases, only the occasion is different.
Even though personalization is becoming more and more commonplace, there’s still plenty of unexploited potential in the application of such technologies in B2B eCommerce (this piece mentions personalization as the number one overlooked factor in the field).
Gartner predicts that by 2018, 70% of business-to-business e-commerce sites will offer personalized features to their customers and that these will outsell their competitors without the same level of personalization by 30%. Below I’ll outline some tactics and areas to work on for B2B companies seeking to streamline their online platforms through personalization and secure their place in the aforementioned, lucky 70%.
While the first three examples are readily actionable, the fourth, „+1” chapter will more likely give you something to think about for the future.
1. Personalized recommendations are a good fit for B2B eCommerce
B2B eCommerce sites are in a favorable position in terms of their capabilities to provide personalized recommendations to their users for two reasons.
First and foremost, a great thing about B2B users is that they’re used to logging in, which makes it a lot easier to track their actions, assemble elaborate profiles and identify them on different channels and devices. This creates tremendous opportunities for personalization and data-backed recommendations.
Secondly, it’s needless to say that B2B purchases are typically preceded by a more thorough research phase than consumer buying decisions. B2B eCommerce sites, therefore, ideally feature much more detailed product pages and documentations in order to provide ample information to business buyers seeking to optimize their purchase decisions.
However, this information, if structured properly, can also serve as a basis for truly fine-tuned product-to-product recommendations and sophisticated, faceted search functionalities (to be discussed in more detail below).
The good thing about product recommendations is that there are several SaaS recommendation engine solutions out there that are relatively cheap, provide stable results and are easy to integrate with any online store, be it B2B or B2C.
2. More information on products equals better search – more information on users equals better personalized search
Good on-site search is crucial to B2C and B2B eCommerce sites alike, especially to those that sell a wide range of products. As a rule of thumb, the more and better structured the data on your site is, the more sophisticated are the search functionalities that you can implement.
Faceted (a.k.a. layered or reductive) search gives your users even more control over what products they want to see on the results list – in other words, to proactively personalize their own experience. As mentioned above, the abundance of product information on B2B eCommerce sites creates excellent opportunities for implementing fine-grained search solutions. Exposing a large number of filtering options can even have a sort of merchandising effect. You showcase how wide your product range is while customers can get new ideas about what to purchase just by looking at all the possibilities.
As mentioned above, B2B eCommerce sites can assemble very elaborate profiles of their customers. These can be used to create excellent personalized search functionalities. One effective search personalization solution is the so-called Smart Search. When the user starts to type a search term, the system can recommend a list of keywords, products or even categories based on the user’s profile in a drop down list.
Another effective approach is when products on the results page are ordered according to the customer’s profile. These two functionalities largely complement each other and combined with faceted search, they make for an outstanding search experience.
3. Content personalization can yield great results in B2B eCommerce
As mentioned before, B2B purchase decisions are often based on thorough research. Providing content to prospective buyers that answers their questions and eliminates their doubts can significantly boost conversion rates – even more so if users feel that they’re being addressed personally.
For B2B eCommerce companies, content can be hyper focused on a small number of individuals, as the lifetime value of customers in B2B eCommerce is immensely larger than in B2C. A few conversions or sales already provide enough incentive to create such content, even if its reach will be very limited.
This is a domain where companies that employ automatization, such as content recommender systems, can gain a considerable advantage over others, as a recent report by Seismic and Demand Metric found that most B2B content personalization is currently done completely, or mostly manually.
Any content personalization effort, however, must be based on careful data analysis and segmentation. If that is done right, you can easily create personalized content and promotions for each segment.
+1 B2B eCommerce is an excellent domain for leveraging explicit feedback
Based on the intentionality of the signal provided by the customer, there are two types of data that recommender systems and other, predictive personalization tools can leverage.
Implicit feedback is data generated through the user’s natural interactions with the platform – e.g. what he or she clicks on, purchases, etc. The explicit feedback category comprises customer reviews, product ratings, and any other instances, where customers are given a chance to directly express their opinions about products, services or other content featured on the site. Currently, personalization technologies leverage mainly implicit feedback. However, there is plenty of potential in incorporating explicit signals into the process.
Researchers working on the EU-funded CrowdRec project outlined their vision for the future of recommender systems in a paper titled „Activating the Crowd: Exploiting User-Item Reciprocity for Recommendation”. In this paper, they argue that data provided by customers in the form of explicit feedback can be an invaluable source of information that personalization technologies can leverage. However, the system must provide ample incentive for customers to take the time to send such feedback. Secondly, users must have some knowledge of the product or service, so their contribution will indeed be valuable.
Such an approach is a great fit for the B2B eCommerce environment, as B2B purchases are more conscious and instrumental by nature and buyer-seller relations in this field typically last longer and are based on loyalty. Therefore, business buyers are incentivized to enrich their profiles through explicit feedback in order to be provided a more personalized and more convenient experience – after all, they’re planning for the long term. Moreover, they’re also generally more knowledgeable about the types of products they’re purchasing, so their reviews and ratings will indeed serve as valuable sources of information.
While this is not an area where polished, readymade automated solutions are currently available, the tendency is that standard personalization technologies are becoming more and more commonplace, so companies seeking to stand out must innovate and be open to novel approaches. In the meantime, customer feedback is a valuable asset even if you can only analyze it „manually” and B2B customers are much more willing to provide you with it.
Personalization technologies and recommender systems are becoming more and more polished both in technical terms and in how they can be used to achieve business goals. As we can see, even though most of these technologies have their origins in the consumer market, B2B eCommerce companies can improve their competitiveness tremendously if they „steal” some ideas from their B2C counterparts.
A few years ago, implementing these kinds of technologies was a realistic possibility only for larger enterprises, due to the heavy associated costs and relatively hard-to-obtain technical talent. Nowadays, however, with the rise of RaaS (Recommendation as a Service) platforms, it’s relatively easy and inexpensive for eCommerce stores to experiment with such solutions, whether they cater to consumers or a business audience.
Author: Huba Gaspar
Huba Gaspar is Content Marketing Specialist at Gravity R&D. He’s mainly involved in the launch of the company’s new Recommendation-As-A-Service product, Yusp, which aims to bring Gravity’s machine learning power to SMBs. He has degrees in journalism and marketing and is interested mainly in topics and fields at the intersection of marketing and technology, including SEO, web development and personalization technologies.