Insights from the ibi-Forum B2B E-Commerce 2019

For several years now, the research and consulting institute ibi research has been organizing a forum dealing with the practical challenges of B2B e-commerce. This year for the first time I had the opportunity to attend the event at the Frankfurt School of Finance & Management. For all those who stayed at home I would like to summarize my notes on the lectures in this article.

First, Dr. Georg Wittmann, Managing Director of ibi research, introduced a few discussion incentives for the following event.

  • Turnover in B2B e-commerce is rising rapidly and, according to a forecast by HighText Verlag, will amount to 1,071 billion euros in 2020. The potential is therefore enormous.
  • 74 percent of companies also expect half of their purchases to be made online in 2025.
  • Why do companies make purchases online at all?
  1. Shopping is faster and more comfortable
  2. High product availability
  3. To support the digitization of processes
  • Price is therefore not the primary reason.
  • In the B2B sector, too, the customer journey is becoming more dynamic and complex. Companies must be prepared for this. Up to now, expenses have often been underestimated.

Digitization of an established sales organization – a field report

Alexander Scherm, Global Key Account Manager E-Commerce of the power tool manufacturer C. & E. Fein, then reported on the reorientation of his company’s sales activities.

  • C. & E. Fein has over 150 years of tradition. On average, office and field staff have been with the company for more than 20 years.
  • Initially, the workforce was rather sceptical about the digital efforts (“Do you want to rationalize our jobs?”).
  • The objective is: More time for what’s important! Employees should be freed from as many manual processes as possible.
  • Sales Challenges
  1. Establish new communication channels to reach Generation Z and Digital Natives.
  2. Extend bricks and mortar retail digitally. Make content available for this purpose.
  3. Multi becomes Omni. As a manufacturer, you cannot influence every detail. Therefore, the goal was set to positively influence at least the presentation of the company and its products through good product data.
  4. Analog becomes digital. How do you deal with small customers in particular?
  • Taking employees with you on this journey is the central challenge and accounts for about 60 percent of the effort (Esteem, determination of strengths & potentials, differentiation of man & machine, empowerment of field staff e.g. via eLearning, personal development of employees).

Brands and international B2B marketplaces – success factor content

In another exciting presentation, Felix Haberlach, Head of Online Business Development at UVEX Arbeitsschutz, explained his company’s cooperation with B2B marketplaces.

  • UVEX has a strong direct sales force, which is particularly important as an input channel for innovation ideas. In addition, the products are also sold through specialist dealers.
  • For a long time, UVEX has not been involved in marketplaces, but has left this field to the dealers.
  • As a result, product presentations were often poor, so UVEX decided to take action itself.
  • Procedure:
  1. Recognize personal responsibility.
  2. Define responsibilities within the Group.
  3. Development of a content strategy (no one-fits-all solution, but channel and target group specific).
  4. Define channels for digital sales and strategic organization.
  5. Development of an infrastructure and interfaces.
  6. Integrate people and know-how carriers.
  • UVEX has now established its own brand worlds on several marketplaces.
  • The company also works with Loadbee. UVEX imports content data into Loadbee, from where it is forwarded to dealer websites, eShops, marketplaces and eProcurement.
  • Lessons learned:
  1. Responsibilities must be clarified and management attention is needed.
  2. Pragmatic small steps lead to the big goal.
  3. Even small improvements can achieve measurable results.
  4. Find the right people.
  5. Just do it!

Relationships matter – Mercateo, more than a marketplace

After a short networking break, Lars Schade, Managing Director of Mercateo, explained the marketplace operator’s view of B2B e-commerce. He also gave an insight into the strategic thoughts behind the “networking platform” Unite.

  • Wholesalers tend to overestimate the inertia of the B2B market. It gives it a little more time, but even large players can fall if this time is not used.
  • New dynamics are already emerging as a result of new competitive situations from competitors, some of whom are outside the industry. The market will not remain a perfect world.
  • In B2C business, customers seem to want marketplaces. But is this model 1:1 transferable to B2B trade?
  • There are usually three models in a company’s supplier structure:
  1. Core requirements with high purchasing volumes: firm suppliers with framework agreements
  2. Standard requirements with medium purchasing volumes: firm supplier relationships, but usually no framework agreements
  3. Marginal requirements with low purchasing volumes: alternating supplier relationships
  • Mercateo has so far established itself as a marketplace for marginal requirements. Usually no product advice is required and companies are prepared to accept fixed prices.
  • With the Unite platform, Mercateo now wants to expand its business into the field of standard requirements. Although there are firm supplier relationships here, these are hardly digitized. Unite offers digital process services via interfaces.
  • Unite sees itself as a neutral infrastructure for digital business relationships that does justice to the three-tier sales model. The retailer retains his 1:1 relationship with the customer, while the manufacturer can benefit from additional data.

Platform Strategy in the Chemicals and Plastics Business: Idea – Implementation – Prospects

The start-up chembid, whose founder and CEO Christian Bürger presented the business model in detail, focused on a single industry sector.

  • It is a change in B2B purchasing: Millennials use marketplaces and platforms much more frequently (31 percent) than baby boomers (14 percent).
  • What distinguishes platforms?
    • They match supply and demand.
    • They bring people together who use the same or complementary products.
    • They usually take advantage of network effects.
    • They create value for users and platform operators.
    • They enable new business models.
  • The structure of the network that platforms create affects a company’s ability to maintain its size. For example, the many local Ubers clusters are easier to attack than the global Amazon cluster.
  • The chemical industry already has over 200 marketplaces and platforms.
  • Idea of chembid: Wouldn’t it make sense to make all relevant product offers and suppliers comparable across platforms? -> In a meta search engine for chemicals.
  • chembid thus takes over the collection, filtering and mining of data on chemical offers.
  • A separate marketplace and the possibility of publishing tenders are also affiliated.
  • Outlook:
    • Strong growth in platforms and webshops in the chemicals sector
    • Price transparency, fast access to information and easier business transactions via the web are playing an increasingly important role.
    • It is also becoming increasingly important for B2B companies to pursue multi-channel strategies.

Two years of industrial safety wholesale on Amazon Business – Learnings, success factors and prospects

Klaus Forsthofer, co-founder of ACE Handels- und Entwicklungs GmbH, then concentrated on business with Amazon.

  • ACE was founded in 2009. In 2013, the company had a turnover of 3 million euros. Today, it has a turnover of 16 million, of which about 70 percent is generated via Amazon.
  • The company is aware of its dependence on Amazon, but, true to the motto “Just do it”, would like to swim along as a “small fish in the big Amazon”. ACE has thus specialized in trading at Amazon.
  • Amazon’s goal is to offer the widest range of products. This also gives small manufacturers and wholesalers, who cannot afford the listing fees of brick and mortar dealers, the opportunity to build a flourishing business.
  • As early as 2016, 55 percent of all product searches began on Amazon. This fact almost forces companies to be present on Amazon. At the same time, content is becoming increasingly important in order to stand out from the mass of providers.
  • Amazon spends the most money in the world on research and development. But what business model does the group actually pursue? From Forsthofer’s point of view, the focus has long since shifted from retail to digital disruption.
  • In order to create an effective digital agenda in this environment, all departments of a company need to pull together and focus on a common goal.
  • “Just do it” is the project approach of the future.

Corporate culture in balance – success factor for digital transformation

After the lunch break, Miriam Nagler, founder of Digital “M” Communication & Health, drew attention to the effects of the digital transformation.

  • So far, man has been dominant in economic activity. The aim was to become evolutionarily more efficient and successful. This was made possible by strategic planning.
  • In the course of digitization, the technology becomes more dominant. This makes business environments more complex and less predictable.
  • Companies must decide on the basis of their specific situation how they want to reorient themselves in the context of digitization. In order to make the possibilities comprehensible, Nagler played with pairs of opposites between which organizations can move.
  • Organization & Leadership
    • Agility vs. hierarchical thinking
    • Zero-defect culture vs. speed
    • Clear responsibilities vs. project thinking
  • Strategy & Innovation
    • Mass product vs. individualization
    • Knowledge vs. doing
    • Delegating vs. self-interest
  • Culture & Communication
    • “Knowledge is power” vs. “Working out loud”
    • Preaching vs. setting an example
    • Email vs. social media
    • Executive vs. influencer
  • Staff
    • “I am the boss” vs. “Man in the center”
    • Management vs. Coaching
    • Service according to regulations vs. creativity & personality
    • Thinking in terms of power vs. employer branding
  • Health
    • Functionality vs. feel-good atmosphere
    • Days absent vs. investment in health
    • Low-cost nutrition vs. brainfood
    • Burnout vs. mindfulness
    • Back problems vs. motion
  • Preventing “change my ass.”
    • Create awareness for digitization
    • Take employees with you through transparency
    • Understanding culture as a foundation
    • Set opposite poles to the permanent change reversal
    • Personality development & self-reflection

Underestimated success factor – approaches for the efficient increase of product data quality

Simone Wieland-Günther from HENKA Werkzeuge + Werkzeugmaschinen and Günter Heiß, Managing Director of eCube, then described how important product data is in B2B e-commerce.

  •  At the end of 2017, HENKA launched an online shop for its own direct sales.
  • Challenges at HENKA
    • Large amounts of data
    • Multiple data suppliers
    • Different file formats
    • Heterogeneous structure of the data
    • Poor quality of the data
    • Classification systems are partly not set or set incorrectly
    • Recurring data deliveries
  • Problems: a lot of manual work, recurring challenges
  • Together with eCube, HENKA has therefore integrated a kind of “product data washing machine” into its system architecture. This consolidates the product data (both from own products and from suppliers) according to transformation rules before they are imported into the PIM.

Increase in sales through recommendations in a B2B shop with special assortment

Matthias Eifrig, Head of E-Commerce at LIEBL Online, and Dr. Jürgen Nützel, CEO of 4FriendsOnly.com, described another concrete case.

  • LIEBL has four divisions (Office Supplies & Business Equipment, IT System House, Specialist Market, Packaging), each with its own strategy and customer base. This makes customer centricity difficult.
  • Two shops were launched: Liebl.de (open B2B shop with marketing activities and campaigns) and Procurement.Liebl.de (closed B2B shop aimed at compliance customers).
  • Major customers are well reached via procurement. The challenge for Liebl is that small and medium-sized customers, for whom the packaging portfolio could be of particular interest, cannot be addressed individually. In this area the visibility should be increased.
  • For this the shop Verpackungsprofi24 is created, which is to convince above all by a recommendation system. Requirements for this system are:
    • Automatic classification of customers
    • Show suitable products for each customer
    • Classify new customers after a few clicks
  • Assumption: Customers with similar behavior are interested in the same products. A similarity matrix is calculated from the behavior of all customers, so that customers can be classified according to their clickstream.

B2B vs. B2C e-commerce – differences, experiences and concrete solutions from practice

At the end of the day, Pascal Richter, Sales Manager DACH at Oro Inc., addressed the differences between B2B and B2C e-commerce.

  • B2C has a higher degree of digital maturity, but there are also changes in the purchasing behaviour of B2B buyers.
  • B2C online players such as Amazon take advantage of the sleepiness of the B2B sector.
  • B2B companies that do not sell online do not risk a loss of turnover, but are on the verge of extinction. B2B e-commerce is not optional, but indispensable.
  • Common ground between B2B and B2C: Customer Journey (B2B- are also B2C customers)
  • Differences between the B2B sector and B2C:
    • Multidimensional business relationship (multi-client capability, different rights & roles)
    • Extended self-service functions
    • Customer-specific prices
    • Personalized catalogues and stocks “on the fly”
    • Customer-specific workflows and rules
    • Various quick-order options
    • Offer requests and approval processes
    • Handling multidisciplinary sales teams (360-degree view of the customer’s activities)
    • Connection of third-party systems is usually more complex than in B2C business

First published on www.innovation-implemented.com

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