Millennial and Gen-Z workforces driving the growth of B2B e-commerce
Most business to business (B2B) transactions are now being conducted through e-commerce, in favour of traditional commercial buying methods. The shift towards online procurement is largely thanks to increasing diversity within these businesses, as digitally-savvy Millennials and Gen-Z enter senior and leadership roles within the workforce.Research conducted for e-commerce platform Sana Commerce* shows that B2B buyers are now purchasing 75 percent of their products online, a 13 percent increase from 2019, and a 21 percent increase in 3 years.
Two-thirds of the companies surveyed also said they're spending more online now than they did prior to the pandemic, with an average order value increase of 45%. These figures mirror the latest data from Forrester Research, who estimate that the volume of B2B e-commerce sales will exceed £2 trillion by 2023, and £3 trillion by 2027. A new (post-pandemic) normal
For most of the pre-pandemic years, a single B2B transaction would involve communicating with a sequence of sales representatives over the phone, and via email. It wasn't uncommon for orders to be placed entirely verbally with no further communication until (or, if) the product or service would arrive. Email was still the most popular method of B2B buying as recently as 2019, however the convenience of e-commerce is just one reason why it's become the preferred way for businesses to purchase products; email is now the second most popular method, followed by phone orders.
The changing workforce Millennials are now the largest generational component in the workforce, and Gen Z are projected to account for 27 percent of the workers by 2025. These digital natives are bringing greater diversity to the workforce, both in terms of tech know-how and desires, from a customer experience perspective.
Outside of working within B2B sectors, these employees are consumers themselves, who are accustomed to researching and transacting online. The B2B e-commerce landscape reflects their personal customer experience by removing the dependence on sales representatives calendars, time zones and accessibility when they're buying and selling products. But the industry-wide move towards e-commerce isn't a youth-led revolution.
Businesses have also noted the convenience and time-saving benefits of e-commerce, particularly in the context of the Covid-19 pandemic. As the workforce relies more heavily on online communication, long meetings and phone calls are considered to be a burden on team morale and work-life balance. The move towards online procurement has helped to streamline communication channels, speed up approval processes, and drive autonomy and efficiency.
The need for supply chain innovation There are high expectations for how e-commerce can impact B2B sectors. Businesses expect the same level of service they would get through business to consumer (B2C) services, but with the convenience of doing everything online.
With that, a true sign of success for B2B e-commerce platforms is when the full end-to-end process can be conducted online. In the research conducted for Sana Commerce, buyers said that visibility of product features, ease of check out, ease of repeat ordering and access to order history were key features they look for in an e-commerce platform. "With e-commerce playing a leading role in B2B sales, companies have spent years ensuring that their web store performs well", says Michiel Schipperus, CEO of Sana Commerce. "But good is no longer enough to maintain - let alone further develop - long-lasting relationships with buyers."
Buyers are tuning their needs as e-commerce develops, which has prompted e-commerce businesses to zero in on all aspects of their supply chain, namely warehousing and logistics, to find opportunities to innovate; process automation is one of the ways they're doing this. By investing in new logistics technologies, businesses can help warehouses and delivery centres (DCs) work faster and more accurately to feed useful information to customers in real time. In turn, this has and will impact how warehouses and DCs are designed and operated.
As buying habits continue to change, and online procurement activity increases, we'll undoubtedly see further innovation across supply chains, to foster more convenient customer experiences. It's evident that businesses are rapidly adapting to new buying methods and e-commerce platforms are well-positioned for the future of B2B sales. *Research Information
The survey of 1282 B2B buyers across Europe and the US was undertaken by independent market research company Sapio on behalf on Sana Commerce.
The survey sample covered construction and industrial materials, machinery and supplies, electronics, food and beverage, automotive, home goods and furniture, and medical devices sectors.
For more insights download the report here.