What are the key differences between B2C and B2B ecommerce?
There are fundamental differences between B2B buyers and consumers, as well as a level of complexity and continuity with B2B e-commerce compared to consumer online transactions. Some companies make the mistake of designing a B2C retailer website with ‘add-on’ B2B features, and then find that the web store cannot deal with the complexity of B2B e-commerce or the needs of B2B buyers. The best place to start is with your customers - B2B buyers who have long-term relationships with your company - focus on their job requirements and what tools they need to efficiently buy online as professional buyers.
Who is the B2B Buyer?
Understanding B2B buyers and how they do their jobs determines the features and capabilities that would make the online buying process easy and efficient for them. The number one characteristic of B2B buyers in comparison to the average online consumer is they are ‘professionals’. They are buying for a living as part of their job, and care primarily about being able to buy efficiently and easily. B2B buyers tend to have long-term relationships with their suppliers and are concerned about an efficient end-to-end buying process that is ideally integrated for both online and offline purchases.
In terms of products, the purchases are planned, and typically involve large orders, and buying the same products or parts again and again. B2B purchases tend to be critical to their business success e.g. filling empty shelves, and are not made on impulse like many consumer purchases. The products can be expensive and complex and B2B buyers are under pressure to buy exactly the right product at the right price, so accuracy on pricing and product availability are important. Also, B2B buyers tend to buy by committee with as much as 70% of B2B purchase decisions involving at least two decision makers. Effective B2B web stores need to serve multiple roles with varying levels of purchasing authority.
Site usability and design are important to B2B buyers in terms of the overall buying experience, but they are more concerned with getting the details right in terms of customer-specific prices, accurate invoices, an up-to-date product catalog, and easy ordering and sales automation where possible.
Difference online appearance between B2B and B2C customers
As mentioned in the previous section, there are a lot of differences between B2C and B2B. Now it is clear that B2C and B2B customers are different, it is important to understand how these differences appear when purchasing at online web stores. Because these differences occur in online environments such as webshops as well. Below the differences between B2C and B2B are explained for online environments.
Single buyer vs. decision making unit
As mentioned, when buying online as a consumer, it’s just you who wants to find a certain product and you want to order it for yourself, your family etc. B2B customers can be sales representatives, resellers, brokers etc. Within an online web store, these B2B customers need specific accounts matching their specific needs. For instance the buyers need an account to create an order, but they should not be able to place the order yet. Then, the manager needs an account in which he/she can see all items that the buyers want to order. The manager just has to check it and then click the order button. Furthermore, a financial employee needs an account in which he/she can only download the invoices. Because multiple people are involved in the online B2B purchase process, it’s important for your B2B e-commerce success to make sure your web store can handle such accounts.
Small orders vs. bulk orders
By 2020, the B2B e-commerce market is expected to become twice as large as the B2C market. It’s not a big surprise when thinking about the booming B2B market and the fact that B2B orders do have higher average order values. Typical end-users are often buying a single product online. Sometimes they are ordering a couple of the same products, but ordering a 100 or even a 1000 products is a rare thing within B2C web stores. They are buying for themselves or their relatives. As mentioned, it’s very common for B2B customers to order in large quantities, and therefore large order values. First of all, this is due to the fact that businesses are often using more products than single end-users. At the other hand, a cause can be found in the fact that B2B customers agreed on quantity discounts or even discounts on delivery (i.e. full truckloads) with the web store owner. This difference in purchase behaviour is very important for your web store. While B2C customers want to know if there is a single product in stock, it’s not that relevant for B2B customers. They are more interested in the quantity and delivery discounts, based on their company’s agreement!
Fixed consumer prices vs. Customer specific prices
When selling to end users, prices are all set. It doesn’t matter whether you have purchased a lot of products before or not, prices are fixed for everyone. Within a B2B environment, prices are mostly based on agreements. In other words, B2B customers do have a specific discounts on specific products. Therefore they need to be able to purchase products at the right price, based on the company they work for. Besides customer specific discounts, it can also be possible that B2B customers are facing different regular prices. So, for both the regular prices and the discounts, your web store needs to show to right prices based on the customer that is visiting the web store. In practice, this can be managed by having customer log ins. Prices can be hidden when a customer hasn’t logged in yet. After logging in, prices are showed based on the company the customer is working for.
Direct payments vs. on credit sales
In a B2C environment, customers are expected to pay for their orders directly via iDeal, PayPal etc. Due to the fact that B2B customers typically place lots of orders per week/month, B2B payments are often been made on credit. Think about the B2B buyer again. It’s his/her job to purchase products for his employer, and since its part of his/her job it should be as easy and quick as possible. This buyer doesn’t want to get the company’s credit card credentials or visit the finance department to get an order placed. Make sure purchasing is as easy as possible and allow purchasing on credit. So customers will be quoted each month based on the orders that have been placed, instead of paying directly. It’s way more convenient and easier for buyers. So that’s exactly what a B2B web store needs to cover: make sure you can offer your B2B clients a way to pay on credit.
Stocks for a.s.a.p. shipments vs. smart shipments
If a popular consumer webshop is facing stock-outs, it is a big issue. Consumers will switch to other web stores that are able to deliver faster, even if products are more expensive. So forecasting the right amount of stocks is crucial within B2C. For B2B parties this is very different. Instead of fulfilling a direct need, B2B customers often have IT systems that help them order in time. Therefore next day delivery isn’t the most crucial thing for B2B customers. They want to purchase at the lowest costs possible. Smart shipments are therefore more relevant than next day delivery. So make sure that your B2B customers can select multiple shipping methods and show the price differences per method. Furthermore, be aware of the fact that your customers can order from anywhere. Based on the location of your customer, shipping costs will change. Especially in case of freight shipments: goods that are too large or heavy to ship via classical carrier services. In that case, full truckload shipments can be beneficial for customers. It’s up to you to make sure all B2B customers will be showed to right shipping methods based on their order and the right shipping costs based on your customers’ locations.
Single visits vs. long lasting relationships
Since online B2C customers are often single visitors, they have very different needs than long lasting B2B partners. B2C customers are looking for a specific product, they buy it and they will likely not visit your webshop for a while. At the other hand, B2B ecommerce is fully integrated within the purchasing department of a company. B2B buyers are purchasing products and components online for the vitality of their organizations. It’s their job to buy what is necessary to keep the business up and running. Therefore, B2B customers expect you to provide an easy way to find products, contact information, and support. They want their purchases being done as fast and easy as possible. So make sure your contact information is at all pages of your web store, so your customers do not have to search!
Low frequency purchases vs. repeat purchases
When buying online, consumers are no frequent buyers. In their 2014 yearly report, Thuiswinkel.org mentioned that all online shoppers purchased on average 3.5 products via Internet. At the other hand, B2B ecommerce is being characterized by repeat purchases. B2B buyers are not just ordering one single product online. Let’s take a food company as an example. The food company is producing various ready meals for a lot of supermarkets. The food company is using a lot of spices for their meals. These spices are being bought via the web store of a spices reseller. The meal producer cannot just purchase a single large box of spices to keep their business up and running. Dependent on the amount of orders, they keep ordering spices to make sure they can produce the ready meals. In other words, for a lot of B2B companies, online purchases are being done repeatedly.
Buying because you like it vs. buying as part of your job
Traditional consumers are looking for certain products online. They like to visit blogs, watch videos and read reviews before purchasing a certain product. Furthermore, consumers mostly don’t exactly know which product they will buy in the end. They want to be inspired, they want to be thought, and afterwards they decide what specific product to buy. At the other hand, B2B customers are looking for a specific product. They exactly know what they are looking for, and most of the times the B2B buyer is searching for a specific product code instead of searching for a name. Purchasing online is part of his or her daily tasks. Therefore it should be as easy and convenient as possible; there time is valuable for them and for their company. 46% of the B2B buyers leave a webshop due to a lack of message. In other words, when it’s not clear if they are on the right webshop they don’t want to start investigating. It’s a waste of their time. Also, poor design/navigation leads to leaving B2B buyers (37%). So, make sure your webshop is easy to use for B2B customers. They don’t like distractions!
Consumer goods vs. all kind of goods
Almost all B2C online sales consist of consumer goods. B2B sales can be very different. Think about selling raw materials such as grain, about screws for a certain machine or even mixed spices based on a customer’s specific recipe. Showing these kinds of products if they are consumer goods is a bad idea. B2B customers are looking for more specific information (what are the exact measures of the screw), they are looking for more contact details (they want to discuss a specific recipe that is not in your catalogue yet) and more. So B2B web stores need to think about how to show off their products based on their B2B customers’ wishes. Include way more specific details about your products, make sure customers can contact your to discuss customizations etc.
Broad market vs. specific market
The online B2C market is a very broad market. First the big online warehouses such as Amazon and the Dutch bol.com are typical examples of online shops focusing on a huge variety of consumers; they are selling books, TVs, washing machines and toothbrushes all together. B2B web stores are mostly focusing on a specific market. For instance, when selling machinery parts, a lot of parts are used for a certain machine. It’s hardly possible to start selling parts for all kind of machines. B2B sellers are therefore focusing on a niche market and they need to fully cooperate with their clients. When selling for a specific niche market, make sure you understand your customers’ needs. They will be most likely were specific as well. Think about the example of selling machinery parts. If you’re selling 30 specific screws, your customers want to be sure they purchase the right one. They will be interested in all dimensions of the screw. Make sure you add this information to each product page.
Searching for product names vs. searching for product codes
As mentioned before, B2B buyers are looking for an easy way to purchase online. They do not want to get inspired, but they see purchasing as part of their job. While consumers are searching for broad terms such as “large travel suitcase” and want to get inspired which one to choose, B2B buyers already know exactly what they want. It’s very specific and most of the time they already know the specific product code. A typical B2B search looks like “984356191000AV”. For a webshop it is therefore very important to include such specific information, and make sure it’s possible and convenient for customers to search for very specific information.
Semi tailor made vs. tailor made
As a typical consumer, you probably receive a lot of e-mails from web stores. Your name is in the header and the e-mail contains products you probably like based on your previous purchases. Although these e-mails look personal, they are not tailor made. They are generated automatically. Also when you receive a discount coupon because you have been a client for a year, it’s still semi tailor made; they discount code has been generated automatically ass well and nobody at the webshop knows you for real. B2B customers do actually have close relationships with online sellers. Since they agree on specific prices, volumes etc. it’s very important that B2B buyers can purchase online based on these agreements. So when they log in, they want to see their specific prices, bulk discounts, shipping fees etc. In other words, their profiles should be tailor made.
- Oracle B2B Commerce Survey 2013
- B2B web usability report 2015