As countries put restrictions into place and the world shut down during the coronavirus pandemic, the gradual shift to online retail became a mad dash. Companies that did not have a robust online presence quickly scrambled to make one. What may have taken years in normal times was condensed into months. Creating an easy and convenient way for customers to purchase products without leaving their homes was vital to keeping many businesses afloat. The shift online affected everything from buying cars to food delivery, with almost no aspects of our lives not being transformed by it.
One area that didn’t see a dramatic online transformation for many companies is wholesale. With the push to rapidly optimize retail platforms taking up most of the bandwidth, many B2B efforts were secondary or left to languish. While this consumer-focused prioritization made sense in the chaos of the pandemic, it can be hurting your business now. Having an outdated or hard-to-use online B2B portal can cost both time and sales. What follows is why you should pay as much attention to your wholesale platform as your consumer one.
TIMES HAVE CHANGED
In the past, many larger companies didn’t have a retail component but followed a more traditional wholesale model. Business-to-business (B2B) buyers working for wholesalers placed large orders receiving a volume discount on their purchases. Those same wholesalers would then sell the products to retailers netting a profit from marking them up. The public would buy from the retailers, with many companies never directly interacting with retailers or consumers. Having wholesalers as the “middleman” was preferable because it let major companies deal in bulk and avoid the headaches, paperwork, and shipping issues of dealing with a multitude of smaller retailers.
The Internet changed the B2B model significantly as sales became more automated and simplified. Reams of paperwork, shipping manifests and faxes all became things of the past as everything could now live online. Some companies decided to ditch the wholesale model altogether and go direct-to-consumer (DTC), allowing customers to purchase directly from their websites. The move to a DTC sales model was not without challenges, as companies quickly had to adapt to marketing to consumers instead of B2B buyers. Smaller and mid-level companies also found themselves competing against well-established online giants like Amazon. Check out our KM101 article for excellent tips on scaling your DTC brand to compete against larger online retailers.
B2B BUYERS HAVE CHANGED
Abandoning B2B for only DTC sales doesn’t necessarily result in more profit. Many companies found that having healthy DTC and B2B sales operations was more profitable than just focusing on one. And some of the same “modernization” tactics that simplified DTC sales could also be applied to B2B transactions. But with a heavy focus on DTC sales and many companies scrambling to optimize retail websites during the pandemic, many B2B online efforts were left to languish. And with the changing demographics of B2B wholesale buyers, that stagnation can be a costly mistake.
According to an article on Forbes.com, 73% of wholesale buyers are now millennials. The first generation of digital natives, millennials are used to the speed and convenience of online shopping. The pandemic reinforced this heavy use of technology and reliance on the Internet and apps while shopping even more. And growing up surrounded by technology and living online has dramatically transformed how millennial wholesale buyers operate. An article by the Harvard Business Review states that 54% of millennial B2B buyers would prefer a “sales representative free” buying experience. And currently, those same buyers only spend 17% of their time interacting directly with supplier sales teams. Like millennials prefer texting to phone calls, most millennial B2B buyers prefer to gather information and make purchases digitally.
This digitally dominant buying behavior means the traditional wholesale buying path of phoning a sales rep or navigating through a clunky online portal is not only dead but can cost you significant sales. B2B buyers now want to learn about products digitally and often go directly to a company’s website to gather information making product descriptions, photography and easy navigation important. B2B online purchasing platforms also need to have the same ease of use and simple navigation as B2C online experiences. CRM systems that store buyers’ shipping and billing information simplifying checkout are vital. Up-to-date inventory checks, shipping estimates and order tracking all need to be part of the mix. Chat options that instantly let buyers gather information, ask questions or get support are also a must. And all of it should be mobile and tablet friendly so buyers can purchase from whatever device they want. Ignore millennials’ preferences, and you will wind up like a taxicab driver wondering where all your customers went while they migrate to an easier-to-use service.
GET A BIGGER PIECE OF THE PIE
Making gains in B2C sales can be difficult as competition is ever increasing. With everyone now having an online presence because of consumer shifts during COVID, the marketplace is more crowded than ever. And capturing consumers’ attention and dollars is also more expensive as social media has become flooded with ads, and engagement continues to trend downward. Because of these factors, the majority of companies spend most of their efforts focusing on B2C sales.
Consumer sales and brand building are always vital, but that doesn’t mean one shouldn’t pay serious attention to B2B sales. According to that same Forbes article, B2B sales are forecasted to see more eCommerce growth than B2C sales to 2025. If your current B2B online platform is hard to use and clunky, you could be losing out on gaining a bigger slice of the sales pie. And while it might take time and money, investing in a better B2B online experience could be an easier way to gain more sales than slugging it out in the crowded B2C market.
FREE YOUR TEAM
Antiquated B2B systems that rely on phone calls and paper trails should be history. But even an out-of-date online B2B e-commerce portal can confuse wholesale customers, making them pick up the phone. While interaction with your vendors is always a good thing, there is something wrong if you constantly have to walk them through your online purchasing process. Not only do you risk them going to another company with an easier-to-use platform, but your team is busy handling B2B customers. This time suck might be fine for large corporations with lots of staff and dedicated wholesale teams, but it can be very detrimental for smaller businesses with fewer employees.
Yes, most of this article is about how vital wholesale customers are. But they shouldn’t come at the expense of your B2C ones that generate higher-margin sales. Retail consumers often have more questions and need more guidance before a purchase. B2B customers are usually the opposite knowing what they want and more concerned about availability, discount structures, shipping costs and other factors. The easier your B2B online portal is to use, the fewer questions your wholesale customers will have, letting your team focus on valuable retail ones growing both B2B and B2C sales in tandem.
SO WHAT NOW?
Hopefully, you have paid enough attention to know the importance of having a modern and easy-to-use B2B website. The next step is to perform an audit and see if yours is up to the task. You can hire a team of advisors or an outside firm to do this, but it really doesn’t have to be that complicated. The best source of information will be the people who are already using it, your wholesale customers. You should also get on your own site and see how easy it is to go through the purchasing process. If it is a far cry from the retail websites you purchase from in your daily life, you may have some work to do.
Before revamping your B2B site or building a new one, it is crucial to remember that wholesale customers have specific needs, and you can’t just clone a retail website. One of the biggest is payment options, as wholesale revolves around invoices with 30–90-day terms to complete payment. Security is also a massive concern for B2B buyers as they deal with considerable financial resources that might be tempting for some to exploit. Check out this excellent article from Retaildive.com for a complete list of what needs to be part of a modern B2B platform to be successful. The time to invest in your B2B efforts is now, as they will increasingly contribute to your brand’s profitability and long-term success.
