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CX & Design June 21, 2020

The Digital Transformation Imperative for B2B Commerce


B2B commerce is characterised by a traditional way of doing business; sales reps with specialised knowledge travel around the country to forge and maintain customer relationships via face-to-face interactions. But, just like in all other sectors, a digital, data-driven change is taking place in B2B commerce, and not just because of the challenges COVID-19 has posed.

For a while, competition has been coming from different fronts, and customers are getting more demanding due to their own personal experiences with B2C companies that are much further along the digital maturity curve. At the same time, the position in the value chain of many B2B businesses is changing. This poses certain challenges, but also offers opportunities. The trends listed below show the most important developments in B2B commerce and serve as an inspiration to make that all-too-necessary changeover to digital.

1. Increasing competition

Many B2B brands are looking to expand their portfolio and reinvent themselves to catch up and be more similar to B2C brands who typically have shorter sales cycles, quicker turnover and more direct contact with consumers. And many B2B customers increasingly expect a similar digital experience and service options when shopping as their B2C counterparts. 

Digitization and external engagement has been embraced by decision makers from all over the world. This digital change is no longer forced for B2B sales leaders. They are convinced that this is also an enrichment to distinguish from their competitors and that digital is the new standard. 

Customers increasingly want to be able to compare options and buy online, which is a big shift from traditional sales approaches. Many B2B companies will have customer-facing account managers who have known their customers for twenty or more years. It’s no longer just a business relationship, it’s a partnership where both the client and the B2B learn and evolve together. Therefore, a lot of effort goes into supporting and catering top clients who place large orders. However, frequent clients who do not need this one to one experience could benefit from access to self-service digital services and options. This would maximise your company’s revenue while catering to the needs of your base, thus ensuring your company remains competitive. 

Now, three quarters of buyers and sellers say that they prefer digital self-serve and remote human engagement over face-to-face interactions. Even after lockdown, these opinions have remained. Digital self-service and remote interactions made it a lot easier for buyers to get information, place an order and arrange service.

Digital transformation does require investment, but it’s one you can’t afford not to make. Not only because your competition will be doing the same, but because your clients will expect it.

Companies are increasingly using corporate startups as a vehicle for achieving a digital-first approach. Setting up a ‘sub-brand’ outside of the company’s main structure, such as in this case study of ABN AMRO’s New10, is now a common thing to do. But, depending on how much catching up an organisation has to do, it can also be a department within the existing corporate structures. No matter the choice, it should eventually become the core business.

2. Digital transformation of your organisation

Digital transformation requires different skills. The ‘real’ work is (partly) replaced by people who build ‘the machine’ and have the ability to view business models and customer relationships as concepts. They are the ones who find solutions in UX, data, AR, etc.

Previously, sales representatives had to be trained and they had to build customer relationships themselves, but these processes are becoming increasingly data-driven. If, as a B2B marketer, you are already able to sort out your data centrally, you will have to re-train all your people to feed this data to the customers. Of course, it is much easier if this is done digitally and automatically.

The market is becoming more and more transparent. It is easy to find out what you can get and what something costs. This means that, as a B2B business, you will have to distinguish yourself in a different way. B2B marketing is characterised by sales reps who give specific advice to clients. And these are exactly the kinds of things you should be offering online. Using data, you can also automate and continually update and optimise this advice, leaving you more time to provide larger customers with excellent service. Ultimately, the knowledge will be stored in a database rather than in just the one person.

A good example is the trend that sees static prices turning into dynamic ones, based on factors such as inventory, planning, market prices, parts, season, requirements and competitors. These are all variables you can put into a dynamic pricing engine. The model is becoming more intelligent by the day. So, the skill shifts from selling to managing the dynamic model.

But if everyone starts implementing this technique, the question will be: are you still distinguishing yourself from the others? Your touchpoints are everything, so design is equivalent to sales. It is essential that anyone in B2B management gets to grips with this as soon as possible. So, if you launch a corporate startup, don’t base it on the traditional business model of the parent company, because then you are just a clone of the corporate parent.

Related sales activities and in-person meetings have dropped rapidly. Because of the massive shift to digital, video and live chat changed to the prominent channels for interacting and closing sales with B2B customers. Since April 2020, the amount of revenue from video-related interactions is up with 69 per cent. E-commerce and video meetings now account for 43 per cent of all B2B revenue. 

Innovate, keep up and make sure you stay ahead of the game. There are huge opportunities everywhere. Digital transformation is not just about the front end, but also about the numerous background processes. It’s all about the human-process-technology switch. You need to get a move on and learn – as fast as you can!

3. Innovation

A company that sells components for lifts has a team of installers to periodically inspect them. Nowadays, the status of the lifts can also be checked using sensors. That information is then linked to the product catalogue, and the sensor indicates what part needs replacement. In the old days, the lift would have been out of service for repairs for a week but now, thanks to the link between the systems, there has been a huge increase in efficiency.

This is an example of the omni-channel trend in the B2B sector, which shows an increase in the data flows between the customer and supplier, meaning inventory management can be automated and making it possible to supply products that meet extremely specific requirements. It also reinforces the bond between the supplier and the customer. An added bonus is that you are actually creating more than just a digital version of the old business, and you can use your own sales and customer data to improve the advice you give to your clients. You are adding value in entirely new ways.

According to McKinsey survey respondents, these new patterns in customer behaviours are likely to become permanent. These new digital commercial and go-to-market sales practices take on a fixed value throughout 2021 and possibly beyond. 

The increase in digital adoption offers numerous opportunities for B2B organisations. The shift towards digital sales can help companies  extend their reach and improve their sales effectiveness. B2B leaders that commit to digitising go-to-market models are more likely to derive competitive advantage than their competitors. 

B2B2C & Direct-to-Consumer Models

Florensis grows flowers which they then sell to horticulturists. The horticulturists then grow them into larger plants. They then sell the plants to retailers who, in turn, sell them to the consumer. Florensis has now started concentrating more on the deal with the retailer.

At the same time, you get retail startups like Bloomon, which go straight to the horticulturist and the breeder. So, the competition comes at you from two sides: from new, consumer-facing companies, and companies that actually have the source on the other. As a result, B2B business quickly touches B2C, which is a rising trend in many sectors.

You’ll notice that clubs like Uber and Lyft have a solid grip on both the B2B and the B2C side – all through the use of a single, solid app that communicates with both sides. It is a kind of ‘meta’ competition that affects the business model. That means not only doing things smarter and faster, or that the UX should be solid, but that you, as a B2B marketer, must decide what your position is, which service you should work on, and perfect which kind of business you need to let go.

At the same time, we are seeing a movement in the other direction.  For example, JustEat Takeaway. You used to go and get fish and chips around the corner; now there is a one-stop-shop for all your takeaway needs. So, as a party, you want a strong connection with your end customer, but you also want to have a say in the basic product, so you can get as much as possible from the value chain and influence it wherever you can.

You tend to see fewer players in the same value chain: it’s a dog-eat-dog world out there.

In short, digital transformation is essential. It is important to work with all the ingredients required for a digital business (data, innovation, UX, etc.). On September 10th, we hosted a webinar with Forrester Research. Our founder and CTO, Bart Manuel, was joined by Forrester VP and Principal Analyst, Ted Schadler, to discuss the secrets for building and accelerating your digital business. Based on Forrester’s recent report, “Digital Rewrites the Rules of Business,” the live stream event illustrated how successful brands are using creativity, data and technology to deliver effective customer experiences.



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