U.S. B2B ecommerce sales will cross the $1 trillion mark for the first time in 2022 and catapult to $1.8 trillion the following year, according to separate studies from Insider Intelligence and Forrester.
These figures represent colossal growth for an industry which prior to the pandemic was not expected to reach even the first milestone for a number of years. Moreover, it illustrates by how much the industry is outpacing its B2C counterparts – which is projectected by Forrester to reach just $539.7 billion by 2023 – despite the latter garnering most of the media and general public’s attention.
Indeed, it appears that the days of salespeople making rounds to client branches are being replaced by omnichannel digital experiences where deals are secured via the click of a mouse versus the shaking of hands. While this shift to online was happening at a steady pace prior to the Covid-19 pandemic, the crisis’ onset massively accelerated it. In fact, Billtrust data shows that its ecommerce customers’ B2B web sales increased by more than 463% during the pandemic’s first year, while average order amount nearly tripled.
Now, Billtrust’s latest study reveals that the vast majority (88%) of wholesalers and suppliers to the contracting, electrical, HVAC, JAN/SAN and plumbing trades have deployed an online ecommerce ordering option.
So what’s driving an industry that has historically been a laggard when it comes to adopting technology to embrace ecommerce? Respondents pinpointed three main factors that are influencing the increased shift to digital storefronts:
1. THE IMPACT FROM COVID-19
Over 90% of service providers across industries report an uptick in ecommerce usage since the onset of Covid-19. Mid-market (99%) and large mid-market (99%) reported the greatest change in ecommerce purchase volume due to Covid-19.
2. THE AMAZON EFFECT
Suppliers were direct in describing this as key in influencing how they invest in ecommerce design and features. In particular, they highlighted the ability to offer next-day or same-day delivery as being integral for the success of any ecommerce system, as is knowing the depth of inventory availability and the costs of shipping to any given local ZIP code, similar to Amazon.
3. THE EMERGENCE OF A NEW GENERATION OF B2B BUYERS
With Amazon research finding that nearly three-quarters of business buyers today are millennials, digital natives are ushering in a new era for B2B sales. However, respondents indicated that generational demographics and integration challenges are still hindering the transition to full digital wholesaling. as ecommerce experiences become more prevalent in our daily lives, our expectations for easy, instant and frictionless experiences are increasing and translating to the B2B world.
As older buying professionals edge towards retirement and younger generations replace them in prominent, decision making roles, it’s safe to assume that the lure of ecommerce will only increase. Even as the impact of Covid-19 wanes, supply chain issues subside and logistical challenges ease, the overarching benefits of doing business online as a B2B organization will persist and ultimately end the traditional model of deals with long sales cycles.