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The 3 C’s of Enterprise B2B Commerce

November 11, 2020

Categories: B2B eCommerce, Digital Transformation Strategy

This article was originally posted on LinkedIn by Four5’s Chief Product Officer, Jake Hookom.

As the world has accelerated digital transformation, you may be evaluating solutions for B2B commerce for the first time or you’re on a subsequent evaluation after stumbling into some critical hurdles in your company’s initial adoption.

As a B2B company, you know your ability to differentiate against competitors is key– simply having an online shopping website only represents a fraction of your business’s value. When you consider commerce solutions for your company, a fundamental need is to select technology that clearly mirrors the makeup of your business and the levers you employ to differentiate.

In this article, I will frame the 3 C’s you should be considering (Customization, Consistency, and Control) within your organization’s evaluation of commerce platforms and technology.

B2B-First Commerce Journey

Customization

Key to your success is your ability to customize for your individual customers, may it be aspects of product availability, pricing, and value-added services – all bundled within a unified experience. The levers or inputs into those customizations are often much more comprehensive for B2B, which primarily center around the model of thousands of buyer-customer entities who expect their transactional workflows and product mix to reflect their operational requirements in doing business with you.

B2B eCommerce workflow requirements

When deciding on commerce platforms or solutions for your company to customize, the main points to consider are:

  1. What are the inputs or areas of your business which drive customization? Does the commerce platform understand they don’t just have users, but also need buyer or account relationships? Does that platform have the concept of multiple resellers or supplier entities that may drive product availability, licensing and price levers? If these concepts are inherently missing from your commerce platform, your next question should then be how difficult is it to incorporate them?
  2. How well does the platform mirror your needs in crafting the ideal user experience? Often we can be immediately attracted to a consumer-targeted solution and simply say, “I want it to look like that!” While that is a very valid basis for communicating intention, you can also fall into the trap of an out-of-the-box solution that looks great, but falls short in the experience your B2B users ultimately need. B2B customers are often complex and need to have workflows such as approvals, account and budget, catalog formularies, and reorders emphasized, lending opportunities to simplify without removing value.
  3. How extensible is the platform for managing your own logic or integrations? This is a hard one for enterprises as they often go back to their ERP vendor for commerce solutions. While a viable option, there’s a couple of factors to consider in the vendor’s ability to align on licensing in the otherwise variable investment in digital transformation. Secondly, understanding where that vendor is incentivized in how and where it creates flexibility to integrate with other systems outside of its eco-system. This is where it may be ideal to find a vendor 100% focused on commerce extensibility and position you well with options in an ever-moving, competitive space.

Consistency

Growth through digital transformation and commerce creates some interesting (but good) problems for the enterprise. The biggest lift will be how you scale experiences to meet the demands of your customers. This can literally take the form of lengthy cloud transformations for enterprises or be the result of each department or business unit acquiring siloed solutions to run their own digital evolution.

There’s not an enterprise where Conway’s law is not immediately apparent:

Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure

This can create a couple of problems for your business:

  1. Duplicative technology investments to achieve transformation where individual departments are moving data into multiple systems to meet a specific use case they have. The cost to manage one-off integrations becomes much higher to your business than the value of the use case.
  2. Disconnected interpretations of critical business data where once it’s landed into individual systems, managing the interpretation of the status of a critical order, the customer’s ability to purchase a specific product, and the availability of a product across your network.
ERP and B2B eCommerce integration workflow

A worst-case scenario is when a customer doesn’t understand why they can’t get a product online and they check with their sales rep (who checks another system) and sees the product is available at the warehouse and then loops in customer service (who checks yet another system) and sees that the product was only allocated for another critical customer in the region. Those interactions can cause a loss of confidence in your commerce strategy and your ability to manage the complete customer experience.

What sometimes comes out of those scenarios is each solution silo goes after improving the data and logic accuracy of their own area vs. adopting an API-first or headless architecture (MACH) where you establish one source of truth which powers solutions that are customer, sales, and support facing to establish consistency in experience and technology investment for your company. This is omni-channel for the B2B enterprise.

ERP and eCommerce integration with with improved data flow

Control

If you’ve been successful at modernizing your approach to commerce with your core and you quickly see the growth in your core base of B2B customers, a couple of new opportunities may arise.

  1. Interest within to formally pursue other markets, such as B2C or B2B2C resellers where you may carve out specific product categories with a separate pricing strategy to test those markets via integration to turn-key B2C solutions or consumer marketplaces, such as Amazon.
  2. Your B2B customers may enter other markets on your behalf as a reseller where they manage the product mix and establish their own revenue model through re-distributing products in a 1P or 3P model.

No matter what, these are both great ways to grow if your operations and technology is ready to scale. There’s a little observation that will become abundantly clear to you once your B2B commerce strategy established- the technology levers you establish to support your B2B customer base transfer extremely well to entering new markets.

Control omni-market expansion

Here are the top things you will need to watch for as you enter new markets with your established B2B commerce strategy:

  1. Validate manufacturer distribution and licensing agreements to make sure products acceptable to professional B2B settings are also acceptable for consumer markets. They may have concerns unknown to you.
  2. Understand the stratification of your pricing strategy so that your entry into new markets doesn’t disrupt your core distribution, or create unintended competition with your more profitable B2B customers (or resellers).
  3. Managing supply allocation across different markets is critical as you have commitments to your core B2B customers first. While you may find increased profitability in some categories by entering new markets, managing inventory allocations will prevent disruption of your current, customer base.

CONCLUSION

Having a strong commerce strategy for B2B can be a huge accelerator not only in the market you’re in today, but act as a springboard into new markets. What’s critical is the way you approach the technology investment to establish long term flexibility.

  • Customization – Does the commerce platform mirror the way you model and leverage to continue to differentiate your value proposition via technology?
  • Consistency – Does the commerce platform have a modern approach to API-first or headless architecture (MACH) to establish consistent visibility and logic across experiences for your customers and employees?
  • Control – Are you in the driver’s seat in managing supply allocation, pricing, and licensing control across as you enter new markets?