A Composable Future: How B-to-B Digital Commerce is Changing for the Better
The experience of the past two years is uprooting assumptions, disrupting norms, and reshaping entire industries. Digital commerce is one of them. The pandemic smashed the old “let’s wait and see” caution of B-to-B manufacturers, distributors and retailers, accelerating digitalization to new speeds as buyers flooded online. Things worked out pretty well. Digital sales for U.S. distributors were predicted to exceed $1 trillion for the first time in 2021, following 17 percent year-over-year growth.
There’s no going back. Business leaders now need to think strategically about how to build out their digital infrastructure to create the seamless, cross-channel experiences customers are increasingly demanding. That means the kind of flexible, scalable and future-proofed capabilities only composable commerce can deliver.
Change ... Accelerated
Things were going this way even before the pandemic. But progress was slower. For most organizations, major business deals were still sealed in person. That meant plenty of face-to-face meetings, demos, relationship building, and days and nights spent on the road for sales staff. These are no longer buyers’ expectations, thanks to lockdowns, social distancing and COVID-19-related cost constraints.
In fact, only a fifth of B-to-B buyers hope to return to in-person sales, even in sectors where such models were dominant, like pharmaceuticals and medical products. According to an October 2020 report from McKinsey, in-person go-to-market sales during the pandemic fell more than half (55 percent). Sales leads no longer feel that the crisis has forced them to go digital; rather, they’re looking at the channel as a new opportunity to drive improvements. Three-quarters (74 percent) in the U.S. believe the digital sales model is completely effective in helping them to reach and serve customers. Remote sales are easier to schedule, save on travel costs and are safer, they claim.
This isn’t just a case of dipping the corporate toe in digital waters. B-to-B buyers are spending big. The value of transactions through B-to-B channels, including websites, e-procurement and electronic data interchange (EDI), surged by 9.6 percent to nearly $10 trillion in 2020, from $9 trillion in 2019. The bottom line is that if you can get the customer experience right, there’s a huge growth opportunity to be had from digital commerce.
Complexity is Everywhere
However, getting there's not necessarily easy. Just as in B-to-C e-commerce, buyer expectations are increasingly high. They’re demanding a seamless cross-channel experience across a mounting range of touchpoints and point-of-sale (POS) interactions. That may already be table stakes in the B-to-C sphere, but it will require significant effort in the B-to-B space.
Video and chat should be high on the list. That McKinsey report claims video conferencing interactions with sales reps surged by 69 percent during the pandemic, while online chat increased 31 percent — and now accounts for around half (49 percent) of all sales revenue. But it doesn’t end there. Digital innovation will encompass connected smart devices and virtual and augmented reality. As far back as 2019, a fifth of organizations said they were planning to implement the latter. B-to-B sellers will also look to integrate smart technologies into delivery vehicles, shelving units and warehouses to streamline fulfilment, increase productivity and minimize costs.
Sellers must also ensure that data on product specs, related products, shipping timelines and much more are accessible to any buyer, using any device across any digital channel. Inventory must also be updated in real time for the best possible customer experience. That’s a challenge, but not an insurmountable one. The best way to ensure you’re able to incorporate innovative new features and capabilities now and in the future is with a composable commerce platform.
A Composable Future
What do we mean by composable? It’s an approach whereby software solutions are presented in packaged components that can be used individually and integrated with those from other vendors as required. It’s all about choice; liberating organizations to find what suits their specific business needs rather than forcing them to use redundant technology. In short, it’s “best of breed” rather than “off-the-shelf.”
Gartner agrees. The analyst firm, which first coined the concept, says: “Application leaders responsible for digital commerce should prepare for a ‘composable’ approach using packaged business capabilities to move toward future-proof digital commerce experiences.” It predicts that, by 2023, organizations adopting composable approaches will outpace the competition by 80 percent in terms of the speed with which they can deploy new features.
That’s pretty compelling stuff. So how do you get there? To create a truly feature-rich experience, organizations will need to stitch together components including hosting, inventory, payment, shipping, and video and online chat. And, as new capabilities emerge as must-haves, they can be integrated with ease. In fact, composable offers a near-limitless capacity to add new features — accelerating time-to-value and keeping businesses at the cutting edge. That’s a long way from the inflexible, monolithic platform approach of the tech giants.
The composable approach has been shown to work well in a range of different sectors. For example, international wholesale retailer METRO eschewed a monolithic model to create a new international digital commerce platform to serve B-to-B buyers in hotels, restaurants and catering. And Sourcengine specifically opted for a composable model to launch a new B-to-B marketplace to serve the electronic component trading industry. In short, there's no sector that can’t benefit.
B-to-B selling has come a long way in a short space of time. But to ensure your business is out in front in this new era, it will need a more flexible way to build out digital capabilities and appeal to an increasingly tech-savvy customer base. Differentiation and competitive advantage in B-to-B sales start with composable commerce.
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.