E-Commerce Is At An Inflection Point
The inflection point e-Commerce is going through today has many parallels to previous technology shifts that revolutionized web-based apps and services. Just as AltaVista, Netscape, Yahoo and others first delivered search and low-end web apps that revolutionized how the Internet was used, Google and Facebook took the revolution a step further and created born-in-the-Internet apps, platforms, and services.
Born-in-the-Internet companies also learned how to translate innovation into apps and platforms that immediately deliver results at a faster pace than their predecessors. Over time, the pace and depth of apps delivered from born-in-the-Internet companies made previous-generation ones obsolete. Companies who led the initial revolution are no longer dominant today. The same inflection was driven by NetFlix, who began mailing CDs and then shifted to cloud-based streaming, eventually driving Blockbuster and others out of business.
And the same revolution is happening right now in e-Commerce. Born-in-the-cloud e-Commerce systems are innovating at a pace that outdistances legacy, on-premise systems. The inflection point is most visible in how quickly user experiences, support for multitier distribution selling, advanced pricing and order workflows are improving. The factors leading to Gartner’s prediction of the digital commerce platform market growing at a Compound Annual Growth Rate (CAGR) of over 15% from 2015 through 2020 are visible today as this market goes through an inflection point.
B2B E-Commerce 2 Times The Size Of B2C
Spending on B2B e-Commerce platform technologies, systems and services continue at a pace over 2X the B2C e-Commerce market. Forrester predicts that by 2019, the B2B e-Commerce market will be worth $1.1T compared to the B2C market at $480B.
Forrester found that manufacturers and wholesalers are the two industries that are generating the majority of market growth and it’s clear why. Many manufacturers are relying on existing homegrown systems that support outdated processes, limited sales channels and are not delivering the experience B2B buyers expect.
Rapidly changing distribution channel dynamics are redefining wholesaler’s business models across a broad spectrum of product and service areas. Like manufacturers, wholesalers need to get beyond competing on price & availability and deliver excellent omnichannel customer experiences. These market factors and more are driving B2B e-Commerce platforms to double-digit growth through 2020. The following graphic from a
Forrester keynote illustrates these trends:
Another factor contributing to rapid B2B E-Commerce growth are the costly and time-consuming customizations to support evolving business models on-premise, and single-tenant hosted e-Commerce systems require. These systems aren’t designed to support multiple geographies or channels either, and quickly become roadblocks to companies generating greater revenue. Based on the manufacturers I’ve spoken with born-in-the-cloud platforms are proving to be more adaptive and quick to support entirely new business models and the channels they rely on for revenue.
Born-In-The-Cloud Platforms Are Increasing Selling Speed, Scale & Simplicity
74% of B2B buyers research half or more of their work purchases online before buying according to a recent Forrester study. The same study found that 30% make half or more of their work purchases online today, and 56% expect to make half or more of their work purchases online in 3 years. These findings and much more like them highlight how B2B buyers are quickly redefining the omnichannel e-Commerce landscape. Leading B2B born-in-the-cloud e-Commerce providers include Apttus, Digital River, NetSuite, and Unilog. The following graphic from a Forrester keynote compares B2B buyer’s expectations that are driving the inflection point:
I’ve seen manufacturers struggle to deliver multichannel and omnichannel customer experiences that meet buyer’s expectations. The most successful so far are relying on born-in-the-cloud B2B e-Commerce platforms that scale to support entirely new e-Commerce strategies. By definition, born-in-the-cloud platforms are designed to capitalize on rapid elasticity, multitenancy, on-demand availability, and continual updates to core components native to cloud platforms.
Factors Defining The Future Of B2B E-Commerce
The innovations born-in-the-cloud platforms enable are defining the future of e-Commerce today. Instead of requiring intensive levels of customization, these cloud platforms are configurable, support multi-tenancy and can scale to support innovative new business models including CPQ and pricing. Born-in-the-cloud e-Commerce platforms also support more complex selling workflows including order orchestration, fulfillment through multiple channels and the ability to manage multiple fulfillment systems concurrently. The following six factors are defining the future of B2B e-Commerce.
Bottom line: An inflection point is happening in e-Commerce today. Rapid advances in user experience, support for multitier distribution selling, advanced pricing and order workflows enabled with born-in-the-cloud B2B e-Commerce systems are leading the revolution. Look for this inflection point to drive double-digit growth in digital commerce platforms through 2020.
Building The B2B Omni-Channel Commerce Platform Of The Future B2B Buyer Expectations Are Driving Sellers To Deliver Fully Functional Omni-Channel Experiences. (free, no opt-in) Forrester Consulting. Courtesy of Accenture.
Critical Capabilities for Digital Commerce. Gartner. (client access reqd.) Published: 20 June 2016; written by Penny Gillespie, Chris Fletcher, Jason Daigler, Sandy Sheen, Yanna Dharmasthira, Mike Lowndes
Hype Cycle for Digital Commerce, 2016. (client access reqd.) Gartner. Published: 7 July 2016 Analyst(s): Jason Daigler, Mike Lowndes
Latest Trends in B2B E-Commerce Strategies and Tech Investment. Forrester. Published June 2, 2015. Andy Hoar & Peter Sheldon
Mastering Omni-Channel B2B Customer Engagement. (free, no opt-in) Forrester Consulting. Courtesy of Accenture.
The Gartner Digital Commerce Vendor Guide, 2016 (client access reqd.) Published: 25 May 2016 Analyst(s): Chris Fletcher, Penny Gillespie, Jason Daigler, Mike Lowndes, Yanna Dharmasthira, Sandy Shen
US B2B e-Commerce Forecast: 2015 To 2020. Forrester. Published April 2, 2015. By Andy Hoar with Carrie Johnson, Patti Freeman Evans, Susan Wu and Jacob Milender
This article was written by Louis Columbus from Forbes and was legally licensed through the NewsCred publisher network.
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