When we presented the Industrial Distribution webinar, “Competing With the Big Dogs: Standing Up to Google and Amazon” (now available on demand), we received a record number of questions. So we asked Jim Tompkins, CEO of Tompkins International and the webinar presenter, to compile and address them. Here is his first installment of Q&A on this important topic.
What a great job Jack Keough and Industrial Distribution did with this webinar. We know that this is a hot topic that is going to become even bigger, and the hundreds who listened in as we talked about how to compete with Google and Amazon further proved this point.
As Jack says, we received so many good questions during and following the event. Let’s start with the first one and lay a strong foundation for this B2B e-commerce series.
Q: “What is the source of the B2B marketplace data you presented in the Industrial Distribution webinar?”
The data I presented was:
- B2B is double the size of B2C in 2013.
- By 2014, 40% of the B2B players will do e-commerce.
- Online customers in 2012 spent 44% of B2B dollars.
- 57% of the B2B buyers have purchased goods online, and 37% expect to increase online spending next year.
- B2B buyers under 35 (GenY) are 131% more likely to buy online.
- B2B buyers do research online.
- 63% of buyers 18-35 have purchased from Amazon Supply at least once, and 40% purchase from Amazon Supply frequently.
The first three data points originate from an EPI Server white paper entitled “B2B eCommerce: A Strategy for Growth”. The source of the last four data points came from a study and paper by the Acquity Group called, “2013 State of B2B Procurement Study”. These are two excellent resources.
Additional information of interest from the EPI Server paper includes:
- The B2B eCommerce market in the US in 2013 is $560 billion, as compared to B2C at $270 billion to $300 billion.
- 55% of B2B eCommerce executives indicate that total customer acquisition costs decrease in parallel with migrating those customers online.
- Business customers expect their B2B eCommerce experiences to reflect their consumer eCommerce experiences.
- 60% of B2B eCommerce executives agree that the more channels a customer buys through, the more money they spend overall.
Other key points from the Acquity Group paper include:
- 40% of B2B eCommerce buyers spend at least half of their procurement budgets online.
- I pointed out in the fourth data point in the webinar that 37% of B2B buyers plan to increase online spending next year. For the 63% who do not plan to increase the main reason is they do not see any major advantage in ordering online. This clearly indicates that B2B eCommerce distributors need to offer more compelling content, research tools and “how to” information.
- 71% of all B2B eCommerce buyers strongly agree that their online budget would increase next year.
- B2B eCommerce buyers have limited loyalty to suppliers, with 85% of all buyers indicating they would go with the lowest cost option instead of their current supplier.
Stay tuned next month as I address another foundation question of B2B eCommerce: “What are the definitions of multichannel, cross channel and omnichannel and beyond?”
Jim Tompkins (jimtompkins@Tompkinsinc.com) is the founder and CEO of the global supply chain consulting and implementation firm Tompkins International. The firm has worked with many industrial distributors to enhance their company’s value and to pursue profitable growth.