B2B Marketplaces What Really Matters. A brief study by the ECC Köln in collaboration with Koelnmesse GmbH

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1 B2B Marketplaces 2016 What Really Matters A brief study by the ECC Köln in collaboration with Koelnmesse GmbH

2 2016 IFH Institut für Handelsforschung GmbH. All rights reserved. Reprinting, also of extracts, only with the permission of the institute. Graphics and implementation: Tobias Eberhardt, Bammental.

3 What Really Matters 1 Introduction According to the calculations by IFH Köln, B2B e-commerce earned sales in the amount of EUR 870 billion alone in Germany in Of this amount, EUR 136 billion was contributed by commerce via websites and marketplaces. B2B online retailers expect that online sales will continue to grow in 2016, as the current figures of the B2B E-Commerce Konjunkturindex show. 1 A look at past experience also shows that websites, online shops and marketplaces have developed very dynamically in the B2B segment, especially in recent years. For example, functions and services that are oriented on B2C e-commerce can be found increasingly on websites and online shops. Just like end consumers, business customers frequently also have the option today of viewing high-resolution product images and short videos and, owing to an optimised presentation, they can call up websites and online shops on mobile end devices. Value is also increasingly being placed on linking one s own online offers with already existing sales channels, for example, using the option to search for products and items in the online shop by means of the page number of the printed catalogue. This way, the strong cross-channel information gathering and procurement behaviour of business customers is taken into account. 2 Based on this survey of the current situation, overall 240 retailers and manufacturers from 47 countries have been surveyed as to the aspects they consider relevant in hardware commerce via B2B online marketplaces, in the scope of the present short study on the EISENWARENMESSE INTERNA- TIONAL HARDWARE FAIR The focus of interest primarily rested on the following: What criteria, services and functions must B2B marketplaces fulfil or offer so that companies can sell hardware through them? Which aspects do companies value in the procurement of hardware via B2B online marketplaces? What are the reasons for the possibility of not selling or procuring hardware via marketplaces not being utilised? 1 IIntellishop B2B E-Commerce Konjunkturindex in collaboration with ECC Köln, December ECC Köln: Cross-Channel im B2B-Handel Kanalübergreifendes Verhalten von Geschäftskunden bei der Beschaffung indirekter Güter, Cologne,

4 B2B Marketplaces What are relevant aspects in the choice of the right B2B marketplace? The choice of a given online marketplace depends on diverse, company-specific aspects. Some companies, for example, greatly value an appealing appearance of the marketplace, while others prefer the most flexible connection possible with in-house IT systems; and for some companies, a maximum of support and customer service is indispensable. For the analysis of the factors that are decisive for sales and procurement of hardware via online marketplaces, manufacturers and retailers were asked to give their rating of various aspects on a scale of 0 ( not important at all ) to 100 ( very important ). Top 3 criteria in selling hardware via B2B marketplaces 1. High degree of userfriendliness in the front and back end 2. Good visual appearance and appealing design 3. Good customer service including technical support 4

5 What Really Matters B2B marketplaces in sales With 80 of 100 points, a high degree of user-friendliness in the front and back end is the most important criterion for the selection of a B2B marketplace, followed by a good visual appearance and appealing design (79 points). This result is hardly surprising, since both aspects usually have a positive impact on the number of visitors, the time spent on the website, and the realised sales. In particular, a good web design shapes the first impression of the marketplace visitors and increases, in the same way as high user-friendliness, the time spent on the site as well as the probability of purchases being made. The criterion considered third most important for an online marketplace is good customer service including technical support (75 points). This result makes clear that marketplace operators should not only see themselves as genuine platform providers. Rather, they should position themselves as service providers, who assist partnering retailers and manufacturers with advice and concrete actions. Nearly rated as important as the offered service is the high profile of the online market place in the target group (75 points). Especially in the B2B segment, retailers and manufacturers often have a hard time increasing the visitor numbers of their online shops. A high profile or coverage within the target group is therefore a decisive factor of success in the choice of the right online B2B marketplace. Fig. 1: Evaluation of central aspects of online B2B marketplaces for selling hardware High degree of userfriendliness/usability in the front and back end Good visual appearance and appealing design Good customer service including technical support High profile/coverage within the target group Options for customisation and adjustment of the product presentation Optimised for mobile end devices (smartphones, tablets) High profile/ coverage in general Interfaces with IT systems of one s own company ECC Köln 2016 Not important at all neutral Very important Total Germany Europe excl. Germany 5

6 B2B Marketplaces 2016 Other aspects not to be neglected include options for customisation and adjustment of the product presentation, optimisation for mobile end devices, a generally high profile, as well as the availability of interfaces for the connection with the company s own IT systems. Even though the optimisation for mobile end devices is thus not a top criterion, the results indicate that companies selling hardware via online marketplaces assume that their customers not only use desktop PCs and laptops for procurement, but that they also sometimes like to use smartphones and tablets for this purpose. This trend is expected to continue and become stronger, also in B2B, due to the high affinity to smartphone of the younger generations. Not least, it becomes clear that business customers increasingly expect standards they know from B2C e-commerce. In the country comparison, it is notable that companies with headquarters in Germany tend to rate nearly all aspects of success slightly higher than European competitors. This is particularly true for userfriendliness, design and visual aspects, as well as the generally high profile and coverage. Figure 2 shows an overview of further aspects of an online marketplace that are regarded as being important. Among them is the possibility to control product information and image data or also that there is a high-performance search feature available on the marketplace, which makes finding the desired products simpler for the users. Likewise, a simple order process, and security as well as reliability of the online platform is highly important to the selling companies, in the same way as the option to offer different payment methods. Fig. 2: Important supplementary aspects for selling hardware via online B2B marketplaces Simple and intuitive product search for prospective buyers. Dealer integration. Good product description, high-resolution images. Different payment modalities selectable. Quick upload of current data. Data security protecting against unauthorised users. No obstacles in the order process. ECC Köln 2016 Simple order processing. Search-engine optimised appearance. 6

7 What Really Matters B2B marketplaces in procurement High user-friendliness or usability in the front and back end is also the The top 3 criteria for most decisive factor in the selection of an online B2B marketplace for procuring hardware via procuring hardware (83 points). In addition, good customer service including technical support was deemed especially important with 82 of High degree of user-friendliness B2B marketplaces points. In the country comparison, it becomes clear that companies with in the front and back end headquarters outside of Germany tend to find this criterion more important than German business customers. Furthermore, the width and depth including technical support 2. Good customer service of the product range is one of the top 3 reasons (78 points) for the choice 3. Wide and strong product range of a marketplace to procure hardware and is considered to be especially important in Germany. This, too, illustrates that business customers want to find their customary behaviour developed in the B2C world also satisfied in business purchases and accordingly, they have high demands in terms of usability, service and product range. Fig. 3: Evaluation of central aspects of online B2B marketplaces for procuring hardware High degree of userfriendliness/usability in the front and back end Good customer service including technical support Wide and strong product range Good visual appearance and appealing design Interfaces with IT systems of one s own company High profile/coverage in general Optimised for mobile end devices (smartphones, tablets) ECC Köln Not important at all neutral Very important Total Germany Europe excl. Germany 7

8 B2B Marketplaces 2016 Furthermore, appealing web design plays an important role in the selection of the B2B marketplace. Compared to the selling companies, it is notable, however, that business customers tend to find a good visual appearance and appealing design of the online B2B marketplace less important. Interfaces with the IT system of one s own company also tend to be regarded secondary and was given 64 of 100 points. This suggests that B2B marketplaces are used less in the context of (partly) automated procurement processes while more for procurements made on an irregular basis. In contrast to companies that sell hardware via online B2B marketplaces, also the high profile or coverage of the online B2B marketplace is perceived as having only mediocre relevance by business customers (55 points). However, this is not true for all countries. Accordingly, business customers of companies from other European countries evaluate this criterion as being more important than their German colleagues do. Ranking in last place is mobile optimisation of the online B2B marketplace for smartphones and tablets. Business customers rate it to be comparably unimportant (51 points). This evaluation differs significantly from that of the selling companies, which attribute substantially greater importance to mobile optimisation (69 points). This makes clear that a major part of business customers currently does not make purchases via mobile end devices yet, but selling companies consider precisely this to be a significant development in the coming years. As shown in Figure 4, detailed information and availabilities of the offered products are furthermore of great importance to business customers. Also deemed important are offering a choice of available payment methods and short delivery periods, as well as a good price-performance relation. Fig. 4: Important supplementary aspects for procuring hardware via online B2B marketplaces Different payment options. Indication of the delivery period for unavailable items. Information about delivery availability and customer-specific prices. Clear and comprehensive technical specifications Reliable and competent customer service. Intelligent search function. ECC Köln 2016 Construction site delivery Availability of required certificates, references to standards, safety datasheets, operating manuals, etc. 8

9 What Really Matters 3 What speaks against commerce via B2B marketplaces? In spite of the possibilities and potential advantages, which are offered by commerce via online marketplaces, like the targeting of more potential buyers and the overview of existing offers on the platform, not all companies come even close to having integrated B2B marketplaces in their own sales strategies. An overview of the arguments brought forward that speak against the use of online marketplaces is shown in Figure 5. Fig. 5: Obstacles to the use of online B2B marketplaces Missing capacities/ resources Need for product consulting is too high Offer of custommade products The right platform not found yet Own online channels available Product complexity too great Is planned for the future Personal contact is preferred Missing (internal) know-how Different business model No interest/ need Obstacles ECC Köln 2016 Accordingly, many companies pursue a different business model in which they prefer, for example, personal contact with their customers in the sense of traditional sales through a field force and in-house sales representatives. But also, insufficient know-how for selling and respectively purchasing online prevents companies from actively using B2B marketplaces. Further cited as not quite central, whilst still relevant obstacles are insufficient capacities, product complexity being too great and the need for product consulting being too high for the partly custom-made products, as well as the availability of an own online channel. Some of those surveyed also stated that they had not yet found the platform that is optimal for their requirements. Thus, also at some of the companies that are not yet active on the marketplace, there is a willingness in principle to process sales or the procurement of hardware also via online B2B marketplaces in the futures. 9

10 B2B Marketplaces 2016 Conclusion The present survey results show: Retailers and manufacturers pose high demands to online B2B marketplaces and request services and features they are accustomed to from B2C e-commerce. Aspects such as high user-friendliness in the front and back end, comprehensive customer support or also an appealing design of the marketplace are of equally great importance to both selling as well as procuring companies. This illustrates that retailers and manufacturers have already noticed many customer wishes and that marketplace operators should expand their offer of a retail platform for services known from B2C e-commerce. This also applies to the aspect of mobile optimisation, even though it is currently important foremost to companies that sell hardware via marketplaces. It can be assumed, however, that the increasing proliferation of mobile end devices in the B2B segment will make these differences disappear in the future. The same applies to some of the mentioned obstacles, which suggest, for example, that product complexity is (still) too great and the need for product consulting too high. In this regard, not least the rapid technical development will clear the road for novel services that represent an added benefit. Thus, the same applies not only for marketplaces, but also for all of B2B e-commerce: the demands but also the possibilities presented to retailing companies are rising. Image credits lev dolgachov / Fotolia.com Mannaggia / Fotolia.com Rawpixel Ltd. / Fotolia.com contrastwerkstatt / Fotolia.com Günter Menzl / Fotolia.com 10

11 ECC Köln The experts for commerce in the digital age With its operations integrated into the renowned IFH Köln the experts at ECC Köln examine the future of retail: e.g. cross-channel management, mobile retail and payments. ECC Köln is the first port of call for analyses and strategic consultancy on the trends in the retail sector. We use tailor-made projects to support our clients on issues around e-commerce and cross-channel concepts, as well as on how to develop new markets and target groups and to achieve channel excellence. ECC-Club is our exclusive networking platform for e-commerce and crosschannel activity. ECC-Club members benefit from a diverse range of services concerning surveys and events. For further information: Koelnmesse GmbH Koelnmesse is the number one exhibition centre for about 25 sectors, for which the company organises the world s leading trade fairs. Every year, Koelnmesse organises and conducts about 80 trade fairs, exhibitions, guest events, and special events in Cologne and in the world s most important markets. Approx. 3 million visitors from 209 countries and nearly 50,000 exhibiting companies from 123 countries regularly take part in the events. The Cologne exhibition centre with its 284,000 m² of exhibition space the sixth largest facility of its kind in the world is just a stone s throw away from the centre of Cologne and has excellent connections to the German and international transport networks. The company s trade fairs are among the most internationally diverse in the world, with an average of 70 per cent of exhibitors and more than 40 per cent of visitors coming from outside of Germany. The INTERNATIONAL HARDWARE FAIR is one of the world s leading trade fairs of Koelnmesse. With around 2,700 exhibitors from over 50 countries it is the world s No. 1 in the hardware sector. In 2016 already in the 40th edition. For further information:

12 Published by ECC Köln c/o IFH Institut für Handelsforschung GmbH Dürener Str. 401 b D Köln T +49 (0) In collaboration with Koelnmesse GmbH Messeplatz Köln T +49 (0) F +49 (0)

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