The quarter ending July 30 was another punch in the gut for North American office supply chain Staples. The company suffered a 4% drop in sales, year-over-year, and a huge net loss thanks in part to a failed merger bid.
A thin silver lining came from the company’s B2B eCommerce operations, which saw a 5.8% jump in net income despite a negligible increase in sales.
The Staples result dramatises the shifting importance of B2B eCommerce. The company is likely to close 200 of its remaining 1,300 brick-and-mortar stores, staking its hope on internet-based B2C and B2B sales channels.
While it has been around for years, analysts still view B2B eCommerce as embryonic.
Frost & Sullivan last year predicted total B2B eCommerce sales would reach US$6.7 trillion by 2020, representing 27% of all B2B sales. Analysts with Forrester put it at $12 trillion, up from $5.5 trillion in 2012. But no matter where it ends up, B2B eCommerce is a steadily growing means of doing business.
Most companies have been slow to adopt to B2B eCommerce. Research suggests that B2B companies make less than 10% of their sales through eCommerce. It is only the companies that are deemed to be leaders (in terms of creating superior B2B customer service) that count eCommerce as “critically important for sales.”
That lack of investment has left B2B eCommerce in the digital dark ages. Executives tell eMarketer.com that eCommerce transactions “tended not to be mainstream or very sophisticated, at least by today’s standards” and that most portals “are just very old, very antiquated.”
Customers are starting to force B2B organisations to change their habits. A strong digital presence, targeted content, predictive analytics and emphasis on the customer experience are seen as necessary to meet customer expectation, particularly that most B2B buyers these days want to purchase online instead of through a sales representative.
All this appears to indicate that B2B sales will look a lot more like the direct-to-customer online channel as the market grows over the next four to five years. The emerging trends indicate that, if B2B is part of your omnichannel, it helps to have a technological hub that gives the same kind of automated service and information to a business buyer that is more commonly available to the individual customer.
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