5 Insights When Evaluating Cleaning Equipment - Sponsored Learning
Cleaning Industry Continues Its March Toward Online Purchasing
- B2B E-commerce Is No Longer Optional For Jan/san Distributors
- Up Next For Distributors: M-Commerce
This is part one of a three-part article on the future of e-commerce and mobile commerce for jan/san distributors.
B2B e-commerce is exploding. Research firm Forrester forecasts U.S. B2B e-commerce sales to grow from $780 billion in 2015 to more than $1.1 trillion by 2020. That’s roughly twice the size of sales projected in the B2C market, and about 12 percent of the total $9.39 trillion U.S. B2B commerce market.
As online purchases continue to pervade the B2B marketplace, jan/san distributors are being urged to bite the bullet and sell online, or risk being left behind.
“The evidence is clear — nearly 75 percent of B2B buyers now say that buying from a website is more convenient than buying from a sales representative,” says e-business analyst Andy Hoar in a Forrester blog. “B2B buyers now insist on an ‘Amazon-like’ customer experience with real-time interaction, extensive price and inventory transparency, and robust guided selling.”
Online retail giants such as Amazon and eBay are encroaching on the B2B supply space, offering consumers access to literally hundreds of millions of products with the click of a button. Therefore, B2B analysts say distributors can’t afford to overlook the changing landscape. In fact, Forrester predicts that 50 percent or more of B2B suppliers’ total customer base will be buying online over the next three years.
“B2B companies that wait too long to create self-serve e-commerce websites risk losing share to pure plays and omnichannel competitors,” reads a Fall 2013 report by Forrester. “For B2B distributors and wholesalers in particular, failing to exploit online and mobile as leading channels for driving customer engagement represents an existential threat to their businesses.”
Changing Customer Base
E-commerce has been slow to take off in the jan/san industry. Though distributors have implemented e-commerce platforms to better service their customers, a joint survey by Sanitary Maintenance and ISSA found that just 19 percent of product orders were placed online in 2014.
Even in that 19 percent, there aren’t a whole lot of great stories to tell, says Justin King, a B2B e-commerce adviser and strategist, and founder of www.ecommerceandb2b.com, in Baltimore.
“We’re just starting to see some first-movers out there,” says King. “There’s the big guys like Amazon and Grainger, who spend millions of dollars, but everybody else is doing it mediocre or below mediocre.”
When it comes to jan/san, distributors’ websites are typically less adept at creating a good e-commerce experience compared to consumer sites, so it’s more painful (for buyers) than just picking up the phone, says King.
It’s not that distributors have failed to recognize the possibilities of e-commerce, says Bob DeStefano, a B2B online strategist and president of SVM E-Marketing Solutions in Red Bank, New Jersey. It’s that jan/san customers are slow to demand it.
“What I have found is that distributors tend to be behind [because] there was not a compelling reason for them to invest in the technology,” says DeStefano. “It was cost-prohibitive. And the reason they didn’t have a compelling reason was because the customer base wasn’t demanding it. They were just fine (placing orders by phone).”
According to Contracting Profits’ “2016 Report on the Building Service Contractor Market,” 18 percent of building service contractors don’t buy any of their products online. A quarter of BSCs buy between 1 and 5 percent of their products from a website. The numbers aren’t better for in-house service providers; less than half of them buy products via the Web, according to a Facility Cleaning Decisions’ survey.
However, distributors should expect to see a reversal of these numbers and an increase in the number of online shoppers in the near future.
“The face of the customer is changing so dramatically,” says DeStefano. “Baby Boomers are retiring and Millennials are entering the workforce and they are just expecting to be able to [conduct purchases] online. They are technology masters, born with a computer mouse in hand. It’s primarily a generational shift that’s occurring.”
According to Pew Research, Millennials (adults ages 18 to 34) surpassed Generation X to become the largest share of the American workforce in 2015. As Baby Boomers reach retirement, B2B buyers are skewing younger — and are inherently tech savvy.
“The people who buy products for businesses are also consumers, and they are used to e-commerce in their daily lives,” reads a blog post from Nuorder, a B2B e-commerce solutions provider. “People already understand the advantages of e-commerce in their personal lives, and many are wondering why their B2B suppliers haven’t made their jobs as simple as their personal shopping.”
That simplicity begins with search. More than 69 percent of B2B companies say they expect to stop printing catalogues entirely within the next five years, which means more buyers expect product information to be readily available online. Buyers conduct an average of 12 online searches before purchasing a product, and more than two-thirds of customers say the most important factor in a website’s design is “the website makes it easy to find what I want,” according to King’s website.
“If you have over 5,000 products in your catalogue, the search box is going to be the way a customer is going to look for it,” says King. “Everybody is comfortable with using a search box. It’s a standard best practice on a distributor’s website.”
That, and “very few clicks to complete the transaction,” he adds.
B2B E-commerce Is No Longer Optional For Jan/san Distributors
Disclaimer: Please note that Facebook comments are posted through Facebook and cannot be approved, edited or declined by CleanLink.com. The opinions expressed in Facebook comments do not necessarily reflect those of CleanLink.com or its staff. To find out more about Facebook commenting please read the Conversation Guidelines.