Ecommerce sales in the distribution industry are showing no signs of slowing down.
That was just one of the key ecommerce trends for distributors identified during the 11th annual State of eCommerce in Distribution webinar, hosted by the Distribution Strategy Group last month.
DSG’s managing partner, Jonathan Bein, and consultant, Dean Mueller, shared their insights on B2B ecommerce trends. Mueller summed it up nicely:
“A digital presence is massively important.”
In particular, ecommerce has taken on more importance for the distribution industry in recent years, a trend that was accelerated by lockdowns during the pandemic. In fact, 70% of business buyers now expect Amazon-like shopping experiences.
While much has been written about the rise of ecommerce in the world of B2B, the webinar provided deeper insights, including the release of findings from the latest DSG white paper on how to get more from your ecommerce investment.
If you missed the webinar, don’t worry. In this article, we’ll cover the top takeaways and ecommerce trends for distributors.
From smaller businesses to massive billion-dollar organizations, the share of B2B companies with ecommerce capabilities — which are defined as the ability to process an online shopping cart transaction — is increasing.
Unsurprisingly, the rate at which adoption is growing differs by company size.
While 51% of businesses with yearly revenues exceeding $1 billion reported having ecommerce capabilities, that was only up 2% from the previous year. And although just 24% of businesses generating less than $10 million per year have ecommerce capabilities today, this figure represents an increase of 33% over the previous year.
Between 2021 and 2022, ecommerce sales grew by over 8%. This year, that number’s expected to more than double with an anticipated 19% growth rate.
A number of factors determine how many sales a company makes directly through its ecommerce channels, said Bein.
“A lot of it is about how the customer wants to buy. If you’re an electrical distributor, and you’re selling to an industrial customer, you’re going to have a tough time getting them to put their complex order in your shopping cart,” DSG’s managing partner explained. “That does not mean that’s a failure of ecommerce,” he added.
It’s important to note, the success of an ecommerce channel isn’t measured by shopping cart transactions alone.
A website can generate B2B buyer leads who later place orders by phone, email, or even fax. “There are different models for ecommerce,” noted Bein.
A robust ecommerce distributor website can help prospective customers conduct research, resulting in a sale, for example. After all, digitally engaged customers buy more online and offline. He explained:
“The website is playing a big role in the transaction even if it’s not taking the order.”
The human factor in B2B remains important, even in ecommerce. Overall, 30% of organizations say that field reps are the most effective way to drive ecommerce demand, although that’s down from 40% in the previous year.
“That’s a pretty big difference in terms of that decline,” said Mueller, who partly attributed the drop to COVID-19 changing how business is done by moving more of it online. “It really emphasizes the importance of an omnichannel approach,” he said, noting, for example, that pricing should be consistent across channels.
Few distributors (7%) are “extremely satisfied” with the quality and completeness of their product data. “There’s definitely room for growth,” said Mueller. Currently, the vast majority (79%) rely on in-house teams, and it may be harming SEO performance.
Considering the sophistication of product information management when deciding on a platform to digitize will be helpful to avoid future frustrations. It’s an important component of your site but can also be a logistical nightmare if not set up right from the start.
🔵 Learn more about the top tools to consider when building on online multivendor site 🔵
Only 17% of survey respondents were “extremely satisfied” or “very satisfied” with their ecommerce investment. Mueller sees this as an opportunity to learn.
Among the most satisfied organizations — which tend to have average ecommerce sales well above average — customer-focused objectives, like improving a website’s ease of use, were more highly prioritized.
In other words, invest in the customer experience to boost digital sales. “Those distributors that find real success in ecommerce have a relentless focus on customer experience excellence, “ said Mueller.
Ecommerce is an opportunity to reach new customers. But, when it comes to distributors, growing revenue with existing customers was actually the leading method (28%) behind ecommerce investments.
“A close second, though, was growing revenue with new customers but[…]using the same existing geographies and the same customer segments,” said Mueller. “So it’s not like you’re trying to go after a totally new kind of customer,” he noted, adding, “you’re focusing on those areas that you’re already good at.”
These six top B2B ecommerce trends for distributors suggest that many B2B companies need to fine-tune their digital strategies. “It’s super critical that you have a solid business strategy for a digital world with a focus on customer experience,” said Mueller as the webinar was wrapping up.
There’s a lot to consider when digitizing, so it’s essential to take it one step at a time. Don’t boil the ocean. Instead, take a crawl, walk, run approach to get up and running and prove out your digital strategy.
A multi-vendor ecommerce platform like Nautical handles the heavy lifting so distributors can focus on building the kind of exceptional customer experiences that support sales.
Nautical’s B2B ecommerce platform enables distributors to drive sales through all channels — both online and off.