What’s B2B and B2C in eCommerce?
B2B and B2C refer to two types of ecommerce that differ between the audience the business sells to.
- B2B, or business-to-business describes transactions between two businesses. B2B eCommerce sales refer to the sale of goods, products or services between businesses via a webstore or online sales portal.
- B2C, or business-to-consumer is used to describe a commerce transaction between a business and an end consumer. Most commonly this refers to transactions between a retailer and a consumer.
B2B and B2C eCommerce models differ in terms of the depth of functionality required to meet the different customers’ requirements effectively and the type of transactions involved in the purchase. However, the line between the two is becoming increasingly blurred.
B2C businesses have long led the way in developing aesthetically pleasing eCommerce storefronts which most of us will have become increasingly familiar with. Whilst B2B models have traditionally been functional tools that served specific purposes, with the changing demographic of B2B buyers (increasing numbers of millennials) and the fact that eCommerce is now a part of our everyday lives, many B2B buyers now expect the same speed and ease of B2C eCommerce when making B2B purchases.
Forbes recently found that 88% of B2B buyers would turn to a competitor if their current supplier’s digital channel couldn’t keep up with their needs and successful B2B eCommerce solutions increasingly need the look and feel of a B2C site but with the added functionality required for B2B operations.CTA
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B2B vs B2C: What’s the difference between B2B and B2C eCommerce?
- Type of customer – Businesses operating B2B eCommerce storefronts target other businesses online whereas B2C organisations target consumers.
- Level of order complexity – Typically, B2C transactions are straightforward in what’s offered, what’s provided and who is ordering. This can differ widely within the B2B space. Large companies often have complex and rigid purchasing processes in place. Some customers may want to order products that require extra controls to track and limit over ordering in a specific timeframe, whilst other customers may need to set spending limits or allocate orders to employees, departments and locations. B2B eCommerce solutions needs to be able to cater for the different levels of complexity with each order.
- Level of security – B2B offerings often need to be able to offer authorisation protocols such as Oauth2, an approved single sign on standard which makes ordering easier for your clients.
- Intelligent pricing – Pricing is a fundamental part of a market leading B2B eCommerce solution as it needs to allow for the vast range of pricing used by organisations in different sectors. It needs to have the flexibility to cater for different regions and be able to offer bespoke pricing for individual products. B2B platforms also need to accommodate large quantities but also have the flexibility to sell complex products on a one off basis to certain organisations, or to people with certain buying clearance.
- Ability to cross sell – B2B transactions can often be for less frequent but higher value products than B2C transactions which makes cross selling and upselling so essential to success. Traditionally it was felt by some organisations that B2B eCommerce was not suitable for their organisation as they took orders over the phone and their sales team would cross sell and upsell. B2B eCommerce platforms enable such organisations to do the same during the online sales process by providing visibility of complimentary products.
- Account management – B2C sites often work as transaction engines and are very effective at navigating users towards placing orders. B2B eCommerce is more than just a sales engine with self-service functionality. Being able to give customers the ability to manage their post sales activities digitally, and handle returns, account finances and back orders, as well being able to obtain live invoices and copy statements are tasks that deliver added value.
What are the advantages of B2B eCommerce?
- Increase sales – The main focus of B2B eCommerce is speed and efficiency with statistics showing that more customers will buy online if it saves them time. Providing tools such as CSV uploads, and order pads to speed up the ordering process inevitably results in increased sales. Additional features such as promotions functionality and price mapping also increase sales ensuring the right customers see the right products at the tight time.
- Reach new customers in new markets – The B2B eCommerce market is huge. It’s twice as big as the B2C industry. In the US alone, it’s predicted to reach $1.8 trillion by 2023. With buyers now finding the online sales experience more convenient than buying from a sales representative, B2B eCommerce represents a promising strategy to expand your target market in new markets and geographies.
- Reduce costs – Moving order processing from the phone to online provides substantial cost savings – your customer service team can reinvest their time into more value added tasks, instead of spending their time taking orders. With additional self-service functionality which automates many account management processes, B2B eCommerce can deliver dramatic cost reductions.
- Improve customer insight – Data and connectivity are key themes of business operations. eCommerce platforms enable businesses to analyse, acquire and measure core data spanning customer engagement metrics, sales product mixes and sales far more easily. By integrating analytics with your business system, you can obtain invaluable data and actionable insights that will improve your customer understanding.
- Improve efficiency – B2B eCommerce integration with your ERP removes paper-based processes and reduces the time and resources required for administrative tasks.
- Speed up deliveries – B2B eCommerce solutions make the fulfilment process more efficient. Rather than having to manually manage and track orders and inventory, a synchronised online system allows brands to automate fulfilment and inventory updates. This leads to fast, accurate and transparent delivery and ultimately, more satisfied customers.
What are the advantages of B2C eCommerce?
- Reach your customers 24/7 – To ensure success it is essential to make buying as easy as possible for your customers. Businesses that operate rigid offline sales strategies can become suffocated by their opening hours and simply will not win the amount of customers that a business with an online B2C eCommerce store capable of capturing sales around the clock will.
- Reduce costs – Brick and mortar stores and physical premises are expensive, not only can rent be exorbitant but staffing them is costly too, and as a result these expenses often need to be passed onto the consumer to make a profit. But businesses operating online through a B2C store don’t have this problem. They can save money by conducting their operations online and sell more cheaply than their competition.
- Expand easily – Physical expansions such as opening stores in new countries and territories is a high risk, high cost strategy. B2C storefronts largely nullify this risk by enabling you to reach new customers in new markets online through a single digital touchpoint.
- Marketing opportunities – Online stores don’t just make it easy to sell online. They make it easy to sell more online through cross selling and upselling. They make it easy to prompt buyers about purchases that work will well together, notify you of upgrades and introduce more products to the buyer, all whilst they’re browsing your site.
- Improved customer insight – Similarly to B2B solutions B2C storefronts enable greater insight into your customers buying behaviour, which can be used to increase the success of your business. By increasing your customer understanding you can tailor your online experiences accordingly, including adjusting underperforming product pages where your customers are exiting your site or increasing the ads or promotions that result in more sales.
- Improved customer experience – Online stores make it easy to communicate with your customers. Not only can information and updates be delivered online you can also give users the ability to manage more of their account themselves, without calling in. You can also communicate with your customers outside of traditional working hours and eliminate the need to travel to your store.
Although both B2B and B2C models deliver an online service to the user the B2B buying journey can be more complex than its B2C counterpart. For example, your customers might need to send products to multiple locations from one order or the person shopping may need to pass the basket off to someone else for approval and payment. It is therefore important that organisations invest in an eCommerce platform that is specifically designed for B2B transactions. However, as we have discussed, even with the added functionality required in
B2B trading many businesses also require the type of look, feel and buying experience found in B2C eCommerce sites. As a result, whilst there are distinct differences between B2B and B2C eCommerce, there are some clear similarities.
If you’re planning on launching a B2B eCommerce storefront or upgrading your B2B eCommerce strategy, get in touch to find out how the EDI-as-a-Service from EDI Here has been designed to have the same look and feel as a B2C storefront with the added functionality required for B2B success.