Want To Increase B2B Sales? Become More Amazon-Like

Pamela Dunn

Amazon is closing in on $258.22 billion in domestic business-to-consumer (B2C) retail sales. That spectacular dollar amount represents more than 49% of all online spending in the U.S.

This retail disruption, commonly known as the “Amazon effect,” is spilling over into the business-to-business (B2B) world as well. A recent Forrester survey finds that 68% of B2B buyers now use online search to make work-related purchases. Gartner estimates this trend will result in 41% of revenue across all industries coming from digital purchases within the year. [3]

These statistics reveal a stark truth about how technology is reshaping the relationship between B2B buyers and sellers, says Diane Fanelli, senior vice president and general manager of Global Platform Channels at SAP.

“If you are not designing your product to be showcased and bought digitally, you’ve really missed the mark,” Fanelli says. “If you think the traditional sales channel is your only sales channel, you are not understanding the Amazon effect.”

Sales strategies must include the digital marketplace

The Amazon effect is changing behavior in important ways. For example, recent research suggests that many B2B buyers are as much as 60% through the sales process before they engage with vendors. Such sales-avoidance, which is part of the new buyer’s journey, is likely to strengthen over time as more digital natives join the workforce and reshape existing business norms.

While B2B companies can continue to use traditional channel strategies, they must adapt quickly to the new buyer’s journey or risk losing valuable sales opportunities to more agile competitors. Steve Kohn, global vice president of business development at SAP, says companies are meeting this challenge by borrowing from the B2C space. They are studying the successes of online retailers and beginning to implement digital marketplaces powered by some of the same advanced on-premise and cloud technologies, including artificial intelligence, machine learning, and predictive analytics.

“What we did with one-click purchasing is now what we are going to do with B2B software,” Kohn says. “We’re at the very beginning, but you can start to see where B2B marketplaces are getting better and doing more with the tools they have. It is enabling digital transformation at a rate I have never seen.”

Digital marketplaces and businesses must be agile

By creating digital marketplaces, companies can establish common platforms for connecting all the entities in their value chains—from suppliers to manufacturers, resellers, and end customers. Connectedness between digital marketplaces and other enterprise systems will provide powerful tools for creating real-time visibility into individual products, services, and customers.

But to operate in this way, companies will need to have more agile processes, systems, and platforms. This agility will be the key to applying all the intelligence that can be collected through connectedness and changing and evolving as conditions warrant.

Fanelli thinks these investments will help companies innovate at digital speed. “Companies are going to be able to bring new ideas to market quicker,” she says. “That will enable them to beat their competition or even get into new markets.”

Want to learn more? Listen to the “The Amazon Effect: Digital Marketplaces for B2B Customers” and check out @SAPradio on Twitter.