I am in a privileged position of being able to spend a great deal of my time talking to people within the food distribution and foodservice industry about their views and experiences with B2B ecommerce, and the opportunities (and threats) the internet has brought.
The growth of B2B ecommerce is very much in the minds of the executives I speak to, who if they are not already, feel the need to be doing something.
However, the benefits are not always clear, and many are unsure of the return an investment in establishing a quality online channel will bring.
Offering a modern B2B ecommerce channel is seen by many as essential to maintaining market share and an investment justified simply by this. But, when we look at the achievements of early adopters in the market, we can see clear benefits in terms of not only protecting the business but also more significantly in helping to reduce costs and grow revenues.
Although not the biggest potential contributor to a business case, making a quality online channel available to your existing customers and encouraging them to use it often delivers quick wins and so is worth exploring in its own right. In this briefing, I outline some of the benefits to businesses I have seen delivered from the migration of existing customers to online.
First, let’s consider the important bit – the end customer perspective
For your customers, access to a quality online channel offers new benefits and levels of convenience that increases customer adhesion to you and sets a high bar for your competitors. There is a strong consensus that the educated customer (educated by their experience as consumers and/or by your competitors) will gravitate towards forward thinking suppliers who can offer such facilities. So what do they get?
An easy and convenient way of doing business with you
There is widespread and growing familiarity with placing orders and obtaining service through online channels, driven by the general growth of internet use and the experiences offered by highly developed retail sites. People are becoming used to the convenience of being able to browse products, place orders, view availability etc whenever they want and not just during your opening hours and without waiting for the phone to be answered or by a call from you. Indeed, a growing number of people prefer to engage through online channels rather than talk to a human being, a trend set to increase.
Efficiency and control
Ordering online is often faster, more efficient and less error prone than ordering over the phone, saving the customer time and money. For larger customers, providing the ability for multiple users to place orders, or build provisional orders for a higher level approval can reduce administration costs and provide greater visibility of activity with the supplier.
The internet presents a range of innovative new ways to do business. Your smaller customers (or suppliers) may leverage your B2B ecommerce platform to deploy white label web sites populated and fulfilled from your ranges, building a stronger relationship and ties with you.
Sharing of information
And don’t forget, B2B ecommerce is not just about trading. Your customers can access relevant news, general trading and market insights such as top selling products, market analysis etc that may help develop their businesses.
From your perspective
As well as retaining your customers, experience has shown that moving customers to B2B ecommerce positively impacts the bottom line through cost reduction and revenue growth:
Order capture cost reduction
First, the obvious. If you have an internal sales team taking orders, it is likely they will be spending a great deal of time entering sales orders on behalf of your customers. Migrating your customers to self-service order entry reduces this workload and enables your sales team to focus on more value added activities.
Customer service delivery cost reduction
Customers chasing orders, requesting invoice copies and statements, seeking product data sheets and nutrition information. All these require the time of your sales team to deal with the enquiry. Through online customer service provision significant volumes of such customer service events can be handled through self-service.
New products and offer awareness
It can be a challenge to advise on new products, offers and promotions that you may have available during an order placement phone call. Customers may be in a rush and not have the time to discuss, or such things may be simple forgotten by the advisor. With B2B ecommerce, such information can be shared automatically and in an unobtrusive way with relevant offers presented within the process.
Order capture error reduction
Your staff and your customer’s staff are human, and errors can be made during communication or as data is entered into systems. Although such error rates are relatively low, the impact can be high in terms of rectification costs and loss of customer goodwill. By encouraging customers to enter orders themselves, a communication step is removed and self-validation of the order (is the price right, is the product image consistent to what I wanted etc) reduces mistakes. Responsibility for the error is also clearer, reducing disputes (although it’s up to you how you handle these issues of course).
Order basket revenue growth
Generally, businesses who have moved customers to B2B ecommerce report higher order basket values. With an immersive experience, instantaneous advice on alternative products and special offers etc, customers tend to spend more.
Basket sizes from an ecommerce sales channel are large than basket sizes from traditional order channels
Are Your Customers Ready for This?
There is always nervousness about promoting online within such a traditional sector as food distribution and food service. ‘Will my customers adopt B2B ecommerce’ – is often a question in the minds of executives. From my conversations with businesses who have travelled this road and having talking to end customers, evidence points to pent up demand for online from within the end customer base. Although education, marketing and initial enticement may be required to migrate your customers, resulting adoption rates and continued use are generally high.
Pent up demand, customer education and marketing coupled with the benefits available to the end customer drives the migration to B2B ecommerce.
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