SECOND ANNUAL GORILLA GROUP B2B ECOMMERCE BENCHMARKING REPORT

Transcription

1 SECOND ANNUAL GORILLA GROUP B2B ECOMMERCE BENCHMARKING REPORT A Smarter Species of Commerce 111 West Jackson Blvd., Suite 300, Chicago, Illinois USA gorillagroup.com

2 1 INTRODUCTION Since sharing our original B2B Benchmarking Research Report a year ago, the ecommerce landscape for manufacturers, wholesalers and distributors has continued to evolve, adjust and grow alongside industry trends. As ecommerce transitions into being a preferred buying method for business-to-business companies in many industries, certain trends have emerged, including the shift to more sophisticated platforms, the rising importance of relevant content, and the focus on Amazonlike customer experiences, from richer product detail pages to suggested items to shipping speed. In an effort to present updated information, and compare data year-over-year, we ve circled back with the companies researched and featured in our 2015 report (as well as several additions based on industry changes) to present a fresh look at the trends, best practices and data driving B2B ecommerce in 2016.

3 2 BRAND, RETAILER OR BOTH? Brand: 41.0% Retailer: 28.2% Both: 30.8% Analysis: We surveyed a mix of B2B sites, the majority being brands. For the purpose of this report, we characterize brands as manufacturers of their own products, selling in a B2B capacity, while retailers could be selling multiple brands or acting as distributor. For instance, Grainger is a B2B retailer and sells a number of B2B brands, such as General Electric and Stanley Black & Decker. We are also noticing brand manufacturers allowing for cross-pollination of products from partners and dealers, such as medical device manufacturer and distributor SPS Co at PHYSICAL LOCATIONS Physical locations: Pure play etailers: 62.8% 37.2% Of those with physical locations, the locations were categorized as follows: Distribution centers: Stores: Offices: Third party retailers: Manufacturing: Warehouses: Fulfillment centers: Showrooms: 44.9% 38.8% 12.8% 10.2% 6.4% 5.1% 4.1% 2.0% Analysis: The majority of sites surveyed this year had corresponding brick & mortar locations. Of those with physical locations, it logically followed that nearly half were distribution centers for B2B goods and more than a third were storefronts. Showrooms, which represented 2% of the physical locations categorized, are an interesting addition to the data, as explained below. COULD B2B ORGANIZATIONS BE TAKING A PAGE FROM RETAIL OMNICHANNEL OFFERINGS? Traditionally, B2B companies have been just that, businesses delivering products or services to other businesses. The concept of using a showroom to display products, answer questions, or incorporating buy online pickup in store functionality has been aimed at retail buyers. Recently, Home Depot, Grainger, and Lennox have capitalized on their physical footprints to allow business buyers, a segment called pro-sumers, to be able to physically experience products, get advice, and pick up products that they researched and purchased online. In the case of HVAC manufacturer Lennox, their certified dealers use LennoxPros.com to reserve and pick up parts at a geotargeted location that is nearby their job site. This feature, paired with on hand and knowledgeable staff, enables the brand to extend their convenient service offerings beyond the digital arena.

4 3 PLATFORM Down 24% from 2015, only 48% of sites surveyed this year were built on in-house solutions. Analysis: In 2015, 63% of sites surveyed were built on in-house commerce platforms. The remainder were spread across a variety of packaged enterprise commerce solutions, with Magento and Hybris leading the pack. Down 24%, only 48% of sites surveyed this year were built in-house. The most prevalent platforms were Magento (19.23%), SAP-Hybris (7.69%), Netsuite (6.51%) and IBM Websphere (6.41%). This decrease in in-house solutions demonstrates that the trend of moving away from legacy systems towards industry-tested, stable, but still customizable platforms with prebaked functionality and enhancements specifically for the B2B market has continued to advance over the past 12 months. RESPONSIVE DESIGN Features Responsive Design Interface: 2016: 50.0% 2015: 26.0% Analysis: Last year, 26% of sites had implemented responsive design, and just a year later, the responsive vs. non-responsive split has become 50/50. B2B sites are catching up with B2C counterparts in terms of responsive adoption as a way of presenting more consumer-like experiences to make business transactions seamless on any device and boost SEO. As the CEO of a B2B business in the food industry noted, One of our largest customers, Whole Foods, empowers employees to replenish product by walking down the aisles of the store and warehouse, ipad in hand, using the same interface and code base as our public direct to consumer site. This and the ability to empower the outside sales force with data on the go via their mobile devices will make responsive design a necessity in the future. ACCOUNT REGISTRATION Instant: 70.5% Curated (requires site owner approval) 26.9% Analysis: A sizeable portion of sites surveyed have curated registration processes in place, meaning that each account requires site owner approval before it becomes functional. This registration tactic is more common in B2B scenarios due to the nature of products sold. Examples of curated registration include nutritional supplement distributors that can only sell certain nutraceuticals to licensed practitioners, or government suppliers that require users to provide tax and security certifications before product and pricing is disclosed.

5 4 USER EXPERIENCE Percentage of sites offer the following functionality: 54% Cross-sells / up-sells Analysis: B2B companies continue to adopt common B2C functionality to boost engagement and grow business. These user experience trends go hand-in-hand with B2B companies moving away from legacy, in-house platforms to established and welldeveloped platforms with well-organized business user tools intended to enhance productivity, heighten user engagement and boost conversion rates and revenue. 69% Newsletter sign-up promotion 44% Product ratings and reviews 46% Quick Order / re-order functionality PRICING PRIOR TO LOGIN Show pricing prior: Do not show pricing prior: % 28.2% Analysis: In 2015, 74% of companies showed pricing prior to login. In 2016, that number dropped slightly to 71.8%, which could be due to sites with more highly technical and proprietary content, or 1:1 customer pricing, which is a pricing strategy whereby costs are calculated for an individual customer based on a negotiated contract or other defining business characteristic (e.g. purchase volume), making public-facing prices less relevant. Though the number of companies showing pricing prior to login has decreased marginally year-over-year, the almost three-quarters of companies participating indicates pricing transparency will be a mandate going forward. In general, withholding information is not a good customer acquisition strategy. ARE B2B COMPANIES LISTENING TO YEARS OF ANALYST RESEARCH? Becoming more Amazon-like will soon become table stakes for B2B merchants. This transformation is similar to the companies that strove to become as social as Facebook or as easy to use as Uber within their industries several years ago. As the data suggests, exposing pricing information is necessary for sellers to bring to the forefront. Research has shown that displaying pricing, or even ranges, prior to login, allows for visitors to gather critical purchasing information. Pricing allows in-depth product researchers to place items into various groupings (low price/lower perceived value, high price/higher perceived value) to qualify products for potential purchase. The premise being that adding products to a shortlist for consideration is better than allowing customers to click over to a competitor like Amazon Business, which always displays base pricing, to see numbers instantaneously instead of waiting for an account to be approved. As this example from industrial supply distributor Applied Industrial Technologies ( shows, pricing is public on more commonly purchased products. There are, however, certain product categories, such as high-end ball bearings, that would need to be configured via a Configure, Price, Quote system. In those instances, pricing is only available after the CPQ exercise.

6 5 CLICK TO CHAT Offer click to chat: 2016: 45.0% 2015: 21.0% Analysis: Just 21% of companies offered click-to-chat functionality when we conducted our benchmarking research last year. The site feature has seen a big percentage increase over the past year with nearly half of the B2B companies surveyed offering it, boosting transparency and opening channels for customers. IBM s infographic To Buy or Not to Buy? How Millennials Are Reshaping B2B Marketing research found that the majority of millennials (69%) currently interacted with vendors face-to-face during the sales cycle, but would prefer to communicate remotely, by or phone. This trend of a new generation of B2B employees moving towards alternate communication styles aligns with the data found in our research. INTERNATIONALIZATION Multilingual: Not multilingual: 26.9% 73.1% Analysis: The proportion of multilingual sites has remained consistent over the past year, however a large proportion of those sites in 2016 are localized for more than 10 languages - 38% - and 19% offer in excess of 30 language options. In terms of specific languages, Spanish remains most common year-over-year, followed by French and German. This increase in the quantity of localized sites could be correlated to the rise of browser plugins that offer instantaneous translations, making multilingual site experiences easier and more commonplace than ever before. Despite this uptick in applications, we would recommend consulting with native language speakers for a content plan and not completely rely on automated plugins to determine your translation strategy. (It s also worth noting that a full globalization strategy needs to go beyond language presentation and also offer localized support and the ability to offer transactions in the country s native currency.) SELLER ON AMAZON Yes: No: 49.0% 50.0% Analysis: Our research found a roughly 50/50 split among B2B companies surveyed as Amazon Business sellers, which aligns with the split between major advantages and disadvantages of the platform. While key benefits of selling on Amazon include broader market access and increased volume of potential transactions, the pricing pressures, reduced margins, and lack of access to critical purchaser data can be detrimental to businesses of any size. We took a deeper look into the industries most and least represented on Amazon to get a feel for trends and commonalities, and found the top three verticals for each group were as follows: Top 3 Industries/Verticals for Companies on Amazon: 1) Industrial (light industrial and replacement products) 2) Home Improvement 3) Technology & Electronics Top 3 Industries/Verticals for Companies Not on Amazon: 1) Industrial (heavy industrial) 2) Home Appliances & Furniture 3) Medical / Health

7 6 PRODUCTS SOLD THROUGH A THIRD PARTY Yes: 47.4% Top 3 Industries/Verticals for brands with third party sellers on Amazon: Analysis: Our research found that nearly half of the B2B manufacturers surveyed distribute products through third party sellers, such as dealers on Amazon. The verticals represented align with the industries and companies that are also prominently represented on Amazon. No: N/A: 1) Industrial (light industrial) 2) Technology & Electronics 3) Home Improvement 23.1% 29.5% Heavy Industrial businesses often necessitate the need for custom quotes (i.e. Configure-Price-Quote), as well as services to deliver or install custom components to end users. Similarly, B2B sales of Home Appliances and Furniture are more commonly transacted through EDI, Procurement Software, or the manufacturers B2B commerce site, where the delivery and transactional components such as POs and order routing have been built into the existing systems. There are a number of industries, including Health and Beauty, Fashion, and Luxury, that need to be closely monitored in order to maintain brand integrity and guard against counterfeits. As a popular skin care brand noted, there is very little stopping third party sellers from uploading their products on Amazon and bypassing the existing authorized and vetted relationships with their Health Care Practitioners. CONCLUSION Since our first report was released a year ago, the B2B market has continued to transform to keep pace with industry trends and best practices. These changes include: A shift to more sophisticated platforms A rise in importance of relevant content An increased focus on Amazon-like user experiences Gorilla will continue to keep a close on the B2B landscape, and we look forward to sharing more insights and a fresh look at the data driving ecommerce in 2016 and beyond. Survey Methodology This report is the result of a heuristic survey of relevant merchant websites in July and August All information collected is publicly available. Information on each merchant s website was accurate at the time the survey was conducted, but is subject to change due to the iterative nature of the web. Our B2B survey is comprised of data collected from 78 wholesale distributors and brand manufacturers taken from the 2015 Internet Retailer B2B 300, as well as a sampling of Gorilla Group clients.