3 Sustainable Digital Commerce Models to Help B2B Sellers Stand Out From the Crowd
Now more than ever, B2B buyers are weighing up the environmental impact of the decisions they make. Studies show that 69 percent of those with decision-making power in B2B businesses consider sustainability performance when selecting suppliers and renewing contracts. This is putting increasing pressure on manufacturing, industrial and automotive firms to be more sustainable than their competitors. While these kinds of B2B businesses historically sold their products in one-time, resource-intensive transactions, today there are sustainable digital commerce models on offer that can boost green credentials and generate revenue. Here’s what you need to know about three of them.
B2C consumers are accustomed to subscription models — from video streaming through Netflix, to food subscriptions via Hello Fresh, to clothing supply like Stitch Fix. The key thing for businesses to remember is that these B2C consumers are also their B2B buyers. And subscription selling is one way of engaging them.
Instead of purchasing a product outright, B2B buyers can pay a fee to receive access to a service and bundle it with a wide range of add-ons, such as insurance and maintenance. Businesses don’t have to keep manufacturing new items and both the seller and buyer will save money on materials and machinery. For example, car subscription service FINN recently expanded its business subscription offering to the U.S. following success in Germany. FINN offsets the CO2 emissions of its entire fleet and offers a variety of electric vehicles with flexible subscription bundles, helping B2B businesses build a low-carbon transport fleet.
The subscription model works as a sustainable offering because sellers don’t need to unnecessarily purchase equipment or materials as back-up stock. In turn, the buyer can use the subscription model to have access to what they need, when they need it — with the knowledge that when they're no longer required, they'll be returned to the B2B business which can reuse them or offer them to other clients.
The pay-per-use (PPU) model ensures businesses only pay for how much of a service or product they use. PPU is powered by telemetry data from connected devices and offers a tailored billing model. Therefore, a manufacturer may hire and pay for a welding machine for the exact number of hours it uses it, rather than paying the same flat fee as a manufacturer that uses the same machine for twice as long over the same period.
This encourages careful management of resources and reduces waste, and it makes buyers more conscious about their consumption because it directly affects their spending. B2B organizations take more responsibility for the product lifecycle because they retain ownership of the equipment and services. This makes for more environmentally friendly and transparent supply chains. A great example of an environmentally friendly PPU is lightning manufacturer Signify. It introduced the PPU Light-as-a-Service model after realizing businesses were wasting money and resources by leaving lights on in offices overnight.
PPU is also beneficial for the seller because it makes its brand more transparent and convenient for buyers. Additionally, it helps build buyer relationships as sellers must interact with their customers more frequently. This means they learn what buyers want, and when, and can use this information to offer add-ons and additional perks.
The eco bonus model is even more sophisticated. It uses dynamic pricing of a subscription/goods based on behaviors that are resource friendly and increase longevity or reduce the damage to a device. Think of it like an eco-version of a black box, so how a business uses the equipment is relevant here.
For example, in industrial environments, this could be as simple as offering a bonus when machines are turned off when not in use rather than leaving them on standby. Everyone benefits when less material and machinery is wasted as equipment is better looked after and lasts longer, and when fuel and electricity consumption is reduced through such incentives.
This model has already been effective in the B2C world. A study of consumers using domestic washing machines showed that those who were subscribed to a dynamic pricing model not only used their washing machines less, but also at lower temperatures. Introducing an eco-bonus model in the B2B world could have similar effects, as businesses will also want to save money, so in turn will operate more sustainably.
Enabling Sustainable Commerce With a Digital Backbone
Businesses without the capacity to be flexible and adapt to buyer demands for sustainable options will find themselves at a disadvantage. However, this flexibility and adaptability is only possible with a strong digital backbone built on a next-generation digital commerce platform. Whether it’s an order management system to optimize order fulfilment to be as eco-friendly as possible, integrating carbon offsetting, or building sustainable commerce models like those outlined here, a sophisticated digital platform is essential. Businesses that are still reliant on monolithic off-the-shelf “e-commerce” platforms will find themselves unable to compete. And as buyer demands around sustainability continue to evolve, those stuck with old, inflexible offerings will be left behind if they fail to modernize.
Over the last 18 years, Boris has been responsible for shaping the international commerce tech industry through his unique vision and approach to strategy across product development, sales, channel & operations. Prior to Spryker, he founded two successful commerce tech companies, both respectively sold to one of Europe’s largest electronic retailers and to CGI Inc. He is a frequent keynote speaker at several prestigious events and a guest on the Innovate or Die podcast.