Charts & Data | Digital Commerce 360

Manufacturers, distributors continue to focus on ecommerce

Mark Brohan — Tue, 07 Nov 2023 20:55:08 +0000

Ask manufacturers and distributors how they feel about current business conditions and a common answer might be: “We’ve had better years.”

Through the first three quarters of 2023, the combined sales of B2B manufacturers and distributors declined to $11.010 trillion. That’s down 1.5% from $11.182 trillion in the first three quarters of 2022, based on a Digital Commerce 360 estimate using monthly B2B sales data from the U.S. Department of Commerce.

For the period January through December, manufacturer sales grew 0.3% to $5.010 trillion in 2022. At the same time, sales for business distributors and wholesalers declined 3% year over year to $5.986 trillion from $6.171 trillion.

Manufacturers, distributors examine ecommerce performance

Many distributors are seeing slowing sales from repeat customers as they scale back orders due to a softer economy. A case in point is MSC Industrial Supply Co.

MSC reached a milestone during its 2023 fiscal year ended Sept. 2, surpassing $4 billion in annual net sales for the first time. But ecommerce sales, which account for more than 60% of total sales, slid by 3% year over year in the fiscal fourth quarter. The distributor attributed the drop in digital sales mainly to public sector sales occurring in non-ecommerce channels.

But MSC, like many other B2B distributors, continues to double down on expanding digital commerce as the business markets shift to accommodate even bigger waves of digital-first customers.

“Looking forward, we expect improvement in our ecommerce sales, particularly through MSCDirect.com, as we start rolling out enhanced capabilities, including improved search and navigation functions,” said MSC chief financial officer Kirsten Actis-Grande in the company’s most recent earnings call with investors.

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at mark@digitalcommerce360.com. Follow him on Twitter @markbrohan. Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.

Favorite

The post Manufacturers, distributors continue to focus on ecommerce appeared first on Digital Commerce 360.

B2B marketplaces and the promise of proliferation

Mark Brohan — Tue, 31 Oct 2023 20:28:43 +0000

They say there are two things certain in life, and these are death and taxes. In B2B ecommerce, there is another certainty: the number of B2B marketplaces will continue to proliferate.

Today, there are more than 500 such marketplaces opening for or already in business in numerus industries, according to data in the newly published 2023 B2B Marketplace 500 report from Digital Commerce 360. Within the next two years, there will be as many as 750 B2B marketplaces and within five years more than 1,000, according to Digital Commerce 360 projections.

That is because the term is not a one-size-fits-all ecommerce channel. There are several models serving various market segments. These range from commercial platforms such as Amazon Business to marketplace platforms that bring together niche buyers and sellers in specific markets or segments.

As the market continues to expand, several key trends will continue to guide fast evolution and market growth, according to the 2023 B2B Marketplace 500.

Trends among B2B marketplaces

The list of 500 vertical marketplaces will continue to grow.
Existing marketplace operators will continue to add features and functions rapidly to convert first-time buyers and sellers into loyal and repeat customers.
The commercial marketplaces dominated by Amazon Business will drive growth across the broader movement.
Public and private investors are getting more bottom-line focused on B2B marketplace deals.
First-time marketplace builders are incurring higher costs to build and launch their platforms. They are taking longer to generate a return on investment.
Marketplaces will remain the fastest growing B2B sales channel.

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly.

Sign up

Favorite

The post B2B marketplaces and the promise of proliferation appeared first on Digital Commerce 360.

Three ways generative AI will change B2B marketing

Mark Brohan — Mon, 30 Oct 2023 20:48:27 +0000

The future of business-to-business marketing will be full of lots of digital change in the year ahead, says new research from Forrester.

B2B marketing, sales, and product teams face a turbulent year ahead. It will be full of partner-centered growth and productivity ups and buyer demands, technology, and regulatory/legal downs. Generative AI will launch the potential for sweeping impact across all teams with a mix of success and failures expected during the next 12 months, Forrester says.

Here are three ways generative AI will change the world of B2B marketing

1. Millennials take charge

2 out of 5 Millennial buyers will demand early access to B2B product experts. Forrester predicts that 40% of younger buyers will rate person-to-person meetings with product experts as their most meaningful personal interactions.

Key takeaway: B2B sellers should forge effective partnerships with product experts and orchestrate all person-to-person interactions.

2. AI will play a big role in product development

Generative AI will surface insights that dictate one in five new B2B product launches. In 2024, Forrester expects product teams to adopt generative AI for idea identification and innovation because of its ability to rapidly sort through customer data for insights. Using generative AI to expedite reviewing an even wider variety of win/loss, competitive intelligence, and customer feedback sources will help to identify novel or non-obvious capabilities that make it into 20% of products launched.

3. Early and rushed AI may backfire B2B marketing efforts

Thinly customized generative AI content will degrade purchase experience for 70% of buyers. B2B buyers saturated in vendor content will have to sort through even more, as marketers and sellers adopt the rapid repackaging and reuse capabilities that generative AI delivers.

Key takeaway: Early experiments will struggle to produce more than simple vertical veneers, poorly personalized offers, or prospecting messages aimed at existing customers, giving buyers more of what they don’t want, Forrester says. Growing frustration will cause more than 70% of business buyers to voice displeasure about the material vendors share.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at mark@digitalcommerce360.com and follow him on Twitter @markbrohan. Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.

Favorite

The post Three ways generative AI will change B2B marketing appeared first on Digital Commerce 360.

Amazon Business is all business about its B2B marketplace

Mark Brohan — Tue, 24 Oct 2023 18:29:50 +0000

A rising tide lifts all boats, and in the B2B marketplace industry, that vessel is Amazon Business. No single B2B marketplace dominates the B2B marketplace as much as Amazon Business, according to data and analysis contained in the newly published 2023 B2B Marketplace 500 report from Digital Commerce 360.

Amazon Business already claims 6 million customers and $35 billion in annualized gross merchandise sales — and it launched just eight years ago. But market analysts figure it is far from reaching a sales plateau.

Colin Sebastian, an R.W. Baird & Co. investment analyst who has accurately forecasted Amazon Business’s sales growth in recent years, has projected $80 billion in gross sales, including many by third-party sellers, before the end of this decade.

Amazon Business leads a B2B marketplace charge

Many buyers say they purchase from Amazon Business. The marketplace reported in April that it had reached “roughly $35 billion” in annualized gross sales. Nice growth for a marketplace that launched in 2015.

60% of buyers do more than a quarter of their purchasing on Amazon Business, a Digital B2B Buyer Survey found. And 28% say they do more than half. But another 12% say they “don’t buy anything” on Amazon Business — and 29% say they buy on other marketplaces.

Amazon Business is the dominant marketplace, the industry’s most influential marketplace, and by far the biggest, accounting for about one transaction of every four, Digital Commerce 360 projects.

Meanwhile, Amazon is also No. 3 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. Amazon ranks No. 1 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales.

Do you rank in our database?

Submit your data and we’ll see where you fit in our next ranking update.

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly.

Sign up

Favorite

The post Amazon Business is all business about its B2B marketplace appeared first on Digital Commerce 360.

B2B buyers count on more digital bang for the buck

Mark Brohan — Tue, 17 Oct 2023 19:37:37 +0000

To navigate budget and headcount hurdles, B2B buyers are turning to digital technology to boost efficiency.

B2B organizations are revisiting current practices and finding new ways to achieve better results with fewer resources. 100% of B2B buyers say it’s important to prioritize digital transformation moving forward, says new research from Hero Digital. The top two factors driving this belief are reduced budget (45%) and reduced headcount (41%), both of which have challenged operations and limited efficiency improvements over the past year, according to the Hero Digital survey of 150 B2B buyers.

“Business leaders must find ways to reduce friction across their ecommerce solutions and digital experiences as B2B buyers seek greater efficiencies capable of enabling faster innovation and growth,” the report says. “When supplier relationships fall short, buyers aren’t afraid to take matters into their own hands — with many companies already pursuing internal improvements as a mechanism to increase efficiency and bolster digital experiences and offerings.”

The majority of B2B buyers (60%) also reported that their organization uses a combination of digital platforms they’ve purchased and built in-house. 90% of B2B buyers’ organizations plan to leverage AI as part of their digital strategy in some way over the next 12 months —primarily to forecast sales and provide a better CX.

Survey respondents said the top challenges B2B buyers face when researching purchases for their business include:

Understanding product specifications/configurations
Inconsistent product or service information across channels
Understanding how products would fit their business
Finding product or service information that is up to date
Understanding pricing

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly.

Sign up

Favorite

The post B2B buyers count on more digital bang for the buck appeared first on Digital Commerce 360.

Most B2B ecommerce organizations have lots of growing pains

Mark Brohan — Tue, 10 Oct 2023 20:11:08 +0000

Despite decades of investment in digital technology, B2B ecommerce maturity varies greatly across businesses of all sizes, according to a survey of more than 100 B2B buyers from Digital Commerce 360 and sponsored by Tradecentric.

Most business organizations describe their digital B2B commerce maturity as “ecommerce 3.0,” or middle of the B2B ecommerce maturity curve, according to the survey.

The survey data reveals there is still much opportunity for companies to invest in advancing their ecommerce maturity – and enhancing their digital offerings.

Advancing B2B ecommerce maturity

The most advanced B2B ecommerce maturity level is connected commerce. It’s a holistic digital commerce strategy that integrates seller ecommerce systems with buyer procurement and enterprise resource planning (ERP) systems to achieve seamless, automated trade.

Many companies haven’t fully reached connected B2B commerce. The survey found that only 17% of respondents said they offered full end-to-end integration of commerce transactions. That includes procurement software and punchout catalogs and automation of purchase orders and invoices.

Regardless of how a buyer places an order, an integrated commerce system smooths out the transaction for both buyer and seller. Both sides of the transaction benefit from such practices as:

Purchase order and invoice automation
Expedited purchases
Accurate information

These save time, reduce costs, and expand revenue-generating opportunities.

More B2B buyers also are asking for integrations to their e-procurement applications. 61% of respondents said more than a fifth of their customers were requiring the ability for purchasers to directly connect to ecommerce solutions from within their eProcurement application from SAP Ariba, Coupa, Jaggaer and others. In addition, 27% of respondents say more than 30% of their customers wanted procurement integration and 12% of respondents reported more than half of their customers were requesting it.

Matt Love contributed to this article.

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly.

Sign up

Favorite

The post Most B2B ecommerce organizations have lots of growing pains appeared first on Digital Commerce 360.

Ecommerce in Asia: A deep dive into pre- and post-pandemic effects

James Reeves — Tue, 10 Oct 2023 17:40:25 +0000

Over the five years prior to 2023, the world economy has been riddled with economic woes primarily due to the pandemic shutdown and its lingering hangover with inflation and other issues such as the war in Europe. As retail sales from physical stores took a hit during the pandemic, retailers with an ecommerce presence’s sales […]

To access this post, you must purchase Platinum Memberships, Platinum Memberships – North American Platinum, Platinum Memberships – International Platinum, Platinum Memberships – Platinum Bundle, Gold Membership, Reoccuring Billing Test Product, Clorox 2019 Gold Membership, Sodimac Gold Membership 2021, Silver Membership, Silver Membership – Silver + Top 1000 Membership or 2023 Top 1000 Report.

The post Ecommerce in Asia: A deep dive into pre- and post-pandemic effects appeared first on Digital Commerce 360.

Ikea adds BNPL late in the game — why?

Gretchen Salois — Tue, 10 Oct 2023 12:45:05 +0000

Buy now, pay later (BNPL) allows consumers to pay for products or services in a series of interest-free installments. Housewares and home furnishings retailer Ikea added the payment option in September 2023.

“We know we’re a little late to the game with BNPL. But we really wanted to see how it was going to play out,” says Christine Briganti, financial services deployment project leader, Ikea

“After looking at BNPL, we’ve structured it in a thoughtful way to service a demographic at Ikea we weren’t serving properly,” Briganti says.

That demographic included consumers that don’t want an Ikea credit card or don’t qualify for one. Ikea already offers a private label Visa credit card that starts at $500.

“We wanted to make sure that the BNPL option wasn’t in direct competition with that,” she says.

Ikea uses Afterpay to offer customers the ability to pay using BNPL for purchases ranging from $40-$500.

Other retailers like Wayfair LLC began offering BNPL in 2016. Amazon.com Inc. in 2018 through Amazon Pay and then through Affirm in 2021, Walmart Inc. offered Affirm in 2019, and Target Corp. through Sezzle and Affirm in 2021.

“We know this is an inflationary time and coming out of this pandemic where people have lost jobs or taken jobs that pay less and they’re maxing out credit cards. We wanted to make sure that if you were not qualified for traditional credit, that this would help the consumer not overextend themselves,” Briganti says.

BNPL vs. credit cards

Unlike Afterpay, consumers that want to use a higher-amount-limit Ikea Visa must go through a traditional credit check and approval process. “Not everyone can qualify for a Visa card,” Briganti says.

“We had been approached by several vendors about offering a higher credit limit change. We might reevaluate in 2-5 years and bump it up,” Briganti says. “But for starting out, we have noticed quite a bit as default rates have gone up with higher limits that we did not want to risk the financial health of our consumers.”

The Ikea shopper is generally 20 to 40 years old, “and that demographic loves technology,” Briganti says. “So, we always wanted to bring BNPL to market. It just took us a while to evaluate what the rest of the market was doing.”

BNPL helps Ikea steer sales

With a lower limit, Briganti says BNPL helps the retailer “steer sales,” she says. “If you were going to buy a living room coffee table and you saw one for $100, but maybe there’s another for $200-$300, you might opt for the higher-priced table if you’re not paying cash for it upfront,” she says.

Jewelry, automotive parts, and apparel retailers most likely to offer BNPL

While more than half of the Top 1000 retailers offer BNPL, the top retailers differ in which  pay-in-installment vendor they offer. 18.3% of Top 1000 retailers offer PayPal credit, one of PayPal’s versions of BNPL, 14.7% offer Affirm, 13.3% offer Klarna, and 11.9% offer AfterPay, with other services coming in behind. 18.9% of retailers offer multiple BNPL vendors.

Jewelry, automotive parts, and apparel retailers are the most likely to offer BNPL. Food and beverage companies are the least likely, according to Top 1000 data.

Ikea is No. 7 in the Europe Database. The database ranks the region’s largest online retailers based on their web sales.

Do you rank in our database?

Submit your data and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

Favorite

The post Ikea adds BNPL late in the game — why? appeared first on Digital Commerce 360.

Why IT companies are a harbinger of B2B ecommerce adoption

Mark Brohan — Fri, 06 Oct 2023 13:00:59 +0000

What telecommunication and information technology companies do with business digital commerce and B2B marketplaces is often a harbinger of what industries will do ecommerce and how soon.

And these days, IT and telecommunications companies are doing — and getting a lot from — B2B digital commerce, based on a new survey from McKinsey & Co.

Users want B2B ecommerce adoption

Ecommerce is now considered the most effective sales channel in IT and telecommunication, according to the McKinsey of 750 companies across 13 countries.

42% of respondents view ecommerce as the best option, ahead of in-person sales (19%), video conference (15%), email (8%), online chat (8%), and telephone (7%).

Many information technology and telecommunications buyers also view online commerce as a more appealing option than offline across five key buying criteria including:

Product availability (45%)
Pricing (44%)
Shipping and delivery options (45%)
“On call” customer support (45%)
Personalized recommendations (43%)

“While tech and telecom companies across regions ranked ecommerce as the most effective channel, the strength of that conviction varies geographically: the United States leads the way with 47% of tech and telecom companies holding that view, followed by Asia at 38%, and Europe at 36%,” McKinsey says. “Finally, for outperforming tech and telecom companies, ecommerce means more than digital self-serve channels such as their own websites. Around half of them have already built an online marketplace.”

More information technology and telecommunications companies also are investing in building and maintaining their own B2B marketplace, McKinsey says.

Just as they are making more use of third-party marketplaces, tech, and telecom B2B companies are increasingly launching their own marketplaces as another sales channel,” McKinsey says. “Adoption of company-owned marketplaces in the sector increased by more than 10% last year, from 50% to 58%,” McKinsey says. “This includes companies that have already built their own marketplace (30%) and those with plans to develop their own (28%). Across all sectors, 26% of companies have already built their own marketplace, and another 26% have plans to do so.”

Matt Love contributed to this article.

More Charts & Data Stories

Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly.

Sign up

Favorite

The post Why IT companies are a harbinger of B2B ecommerce adoption appeared first on Digital Commerce 360.

Infographic: General Mills incentivizes customers through mobile app Fetch

Gretchen Salois — Wed, 04 Oct 2023 15:15:18 +0000

The days of the print-out coupons are in the past as General Mills has gone 95% digital this year, says KC Glaser, senior manager of brand experience.

“We want to meet the consumer where they are, and they prefer digital experiences — but it’s also really good for our business,” Glaser says. “We get so much more data to inform our future plans and marketing choices from a performance marketing perspective.”

General Mills can be more flexible by offering digital promotions, Glaser says. This includes incentivizing the consumer to take action when they’re most likely to convert.

“How do we build those relationships with consumers?” asks Glaser.

One way General Mills is building incentives for customers is through the Fetch rewards mobile app. Consumers download the Fetch app and create an account. They take photos of their grocery shopping receipts from in-store or online shopping and upload them to the app.

Consumers earn points they can redeem for gift cards. Eligible receipts that have at least one participating brand may receive at least 35 points. Each dollar is worth one point. 1,000 Fetch rewards points are worth $1, for example, and consumers need to reach 3,000 points in order to redeem for gift cards at stores including Starbucks, Macy’s, Amazon, Nordstrom Rack and Home Depot as well as for Visa cards. Fetch charges participating retailers like General Mills a referral fee.

Brand loyalty: What it is and how to build it

There is a lot of data exchanged between Fetch and General Mills, Glaser says.

“We get a ton of data from the Fetch partnership — about 62 million lines of data per day,” he says.

That data feeds into the brand’s customer data platform (CDP), which is a software platform that collects first-party data from multiple sources to help brands create targeted and personalized marketing campaigns.

“Loyalty programs are something that the consumer packaged goods (CPG) space isn’t necessarily ubiquitous — it’s something not all CPGs have nailed,” Glaser says. “We wanted to be intentional. What does that look like? How does it come to life?”

In March 2023, General Mills said it had added 2 million customers to its Good Rewards loyalty program with Fetch within the first six months of launch.

Consumer engagement experience

Fetch has about 18 million monthly active users, with 6 million of those using the app every day, says Robin Wheeler, the chief revenue officer at Fetch. In April 2023, the rewards app said it had surpassed $152 billion in annual gross merchandise value (GMV) across U.S. in-store and online retail sales.

“Fetch isn’t your traditional kind of shopping app,” Wheeler says. “It’s a consumer engagement experience.”

A larger portion of consumers are Millennials and Gen Z, Wheeler says.

“The younger generation is definitely coming to Fetch and I think a lot of that is tied to the experiences they’re seeing on social media,” Wheeler says.

Fetch rewards: adding brands

Fetch shares its general merchandise value scanned daily, Wheeler says. Fetch employees also track potential opportunities.

“We’re reading the trades and keeping up to speed on industries,” she says. “If we’re seeing national brands start to compete with a certain brand of deodorant, for example, our primary goal is to focus on where we’re seeing a lot of activity where we’re not currently rewarding consumers. Because that’s low hanging fruit.”

The company uses this information as it attempts to build relationships with other brands.

“There are plenty of big companies we haven’t started working with, and we need to be there,” she says.

This includes providing carousel information displayed at the top of the app that consumers see when they open it. Whether the promotion is about back to school or another busy shopping period, brands also want to include their offers and create more consumer awareness.

Fetch also has daily spin feature where consumers can obtain a daily reward.

Brands use influencers to reach new customers

This includes learning about the app from social media influencers, Wheeler says.

Fetch can share with brands what consumers are spending based on the receipts they upload to the app. Brands can target consumers, whether they’re loyal customers or “competitive buyers, which you have a to work a little bit harder for,” Wheeler says.

Fetch works with influencer agencies to source talent, Wheeler says. The company monitors influencer content and when it finds the right fit, it reaches out with affiliate links.

While the majority of Fetch receipts are in-store, Wheeler says online receipt uploads are growing.

“We have integrations with Amazon and Walmart,” Wheeler says. “We also have emailed receipts. If we have your email integrated and you order from DoorDash, we’re able to scan and pick up that receipt. So emailed receipts are definitely growing.”

Consumers can connect their Fetch account to their email, Amazon and Walmart accounts to earn Fetch rewards.

Fetch social

61% of Fetch monthly active users engaged with social features during July, up from 24% in January.
Daily Reward launched in December 2022. Consumers have played daily rewards over 222 million plays since then.
People who engage with social features/in-app games are more likely to scan receipts every day and have retention rates around 4-5 points higher than cohorts that don’t engage with these features.

Fetch eReceipts

On average in 2023, about 10% of all receipts submitted to Fetch were eReceipts.
About 29% of Fetch users who scan receipts also submit eReceipts.
Top retailers include Walmart, Target, Sam’s Club, Walgreens, McDonald’s, Starbucks.

Do you rank in our database?

Submit your data and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

Favorite

The post Infographic: General Mills incentivizes customers through mobile app Fetch appeared first on Digital Commerce 360.