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Marketplaces grow faster than other B2B digital sales channels

Mark Brohan — Tue, 13 Feb 2024 22:03:34 +0000

B2B marketplaces tell the story of where B2B ecommerce finished in 2023 and where it’s headed in 2024.

The moral of the story: B2B marketplaces remain the fastest growing B2B digital sales channel and a key driver in how business organizations of all sizes are undergoing digital transformation, according to the newly published 2024 B2B Market and Customer Experience Report.

Consider these metrics about B2B marketplaces

B2B marketplaces grew year over year nearly 100% in 2023. That’s up to $224.0 billion from $113 billion in 2022.
B2B marketplaces last year accounted for 1.3% of all B2B sales.
There are now 750 vertical industry marketplaces (and counting).
Six in 10 B2B buyers are doing 26% or more of their B2B buying on Amazon Business.
More than half of B2B buyers, or 59%, are conducting more than a quarter of their purchases on online marketplaces, according to a new survey of 103 B2B buyers.
Amazon Business is the dominant marketplace, the industry’s most influential marketplace, and by far the biggest, accounting for about one transaction of every four, Digital Commerce 360 projects.
Marketplace service provider Mirakl says the gross merchandise volume on the Mirakl Marketplace Platform, which client companies use for first-party and third-party ecommerce sales and drop-shipping, grew 50% year over year in 2023 to $8.6 billion.
The rollout of these new marketplaces will continue in 2024, and the total number of B2B marketplaces could exceed 1,000 in as soon as two years, Digital Commerce 360 projects.

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B2B ecommerce laps US business sales

Mark Brohan — Tue, 06 Feb 2024 19:33:13 +0000

All in, B2B ecommerce grew multiple times faster than total U.S. business sales last year. And more of the same is underway, according to the all-new 2024 B2B Market and Customer Experience Report from Digital Commerce 360.

Insights from the 2024 B2B Market and Customer Experience Report

The overall business market for manufacturing and distribution ended the year in a deep freeze. In 2023, the combined sales of U.S. manufacturers and distribution companies were flat at $14.87 trillion. That’s in sharp contrast to B2B ecommerce, which grew 17% in 2023, based on data and analysis in the forthcoming 2024 B2B Market and Customer Experience Report from Digital Commerce 360.

But high interest rates, nervous consumers and businesses tightening spending based on a prediction of a hard (or soft) recession, along with other factors such as lingering supply chain issues, put the brakes on business growth in 2023.

Manufacturing sales grew just 3%, totaling $6.82 trillion in the last 12 months compared with $6.59 trillion in the prior year. Meanwhile, distributors fared even worse, with combined sales that declined by about 3% to $8.04 trillion from $8.26 trillion in 2022.

The market for B2B products and services is expected to rebound in 2024, with many economists forecasting the U.S. gross domestic product (GDP) to grow between 1.6% and 2%.

“The expectation of below-trend real GDP growth in 2024 results in forecasts for slower — but still positive — job growth and a modest increase in the unemployment rate,” says a Federal Reserve Bank of St. Louis report.

But regardless of how the overall American business economy performs in the year ahead, one aspect seems certain: The continued growth in B2B digital commerce will drive — or at least highly impact — the expansion of business sales overall in 2024.

Business buyers today use anywhere between three and 10 channels to research, negotiate and purchase goods and services from sellers. Those channels can include online, such as ecommerce sites and apps, B2B marketplaces and e-procurement, and offline, including branches and manual orders entered by sales reps.

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B2B digital sales grow all around in 2023

Mark Brohan — Tue, 30 Jan 2024 20:53:19 +0000

The numbers are in and, overall, all the B2B digital sales channels posted healthy gains in 2023.

All-in, B2B digital sales — including ecommerce, e-procurement, and electronic data interchange (EDI) — grew 10% to $3.36 trillion from $3.04 trillion in 2022.

B2B digital sales takeaways from 2023

The takeaway for 2024 for B2B sellers of all sizes is that business buyers want an omnichannel — and digitally driven — purchasing experience. Customers prioritize companies that offer digital tools, officially putting the paper catalogs on the back burner. And if companies want to remain competitive and grow, they will need to have robust self-service options that users can not only opt into, but a system that allows for a smooth and seamless experience.

Furthermore, a robust, well-oiled front office has the potential to unlock more revenue, covering the investment made in upgrading both back- and front-office systems, says Paul do Forno, managing director of Deloitte Digital’s Commerce Practice.

When companies firm up their front office by tapping into the array of digital tools that help them sell across channels — omnichannel B2B commerce — the potential is limitless. They can provide an end-to-end digital sales experience that empowers them to serve their customers more efficiently and effectively.

4 ways to provide an empowering digital sales experience

Direct commerce / Customer Portal / Dealer Portals: A website that supports marketing and catalog management online. This also includes mobile-responsive design.
B2B marketplaces: A company’s own and third-party online marketplaces. On it, companies can sell both their own products and facilitate others to sell.
Procurement commerce: A platform that facilitates buyers to access a supplier’s storefront from within the buyer’s own procurement application.
Sales Assisted: Allows direct connection with customers through call centers and online chats to complete orders or resolve any issues in a timely manner.

As B2B commerce is expected to grow over the next four years, digital transformation should be seen as a growth channel for any B2B company, Deloitte’s do Forno says.

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Holiday traffic flat for Top 1000 retailers

James Risley — Wed, 24 Jan 2024 19:40:22 +0000

Holiday website traffic to North America’s largest ecommerce retailers was flat compared to the same time last year, according to Digital Commerce 360 analysis of Similarweb data. While holiday spending hit records in 2023, shoppers made slightly fewer visits to retailers in the Top 1000, down 0.8% compared to the 2022 holiday quarter. Digital Commerce […]

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Manufacturers’ cybersecurity concerns rising as data investments grow

Mark Brohan — Tue, 23 Jan 2024 20:20:14 +0000

Manufacturers will be stepping up their use of data intelligence this year. But at the same time, manufacturers may not share as much digital data as before because of rising concern over cyberattacks and data breaches, says a new survey of 100 manufacturing chief financial officers by accounting and consulting firm BDO.

Half of all manufacturing CFOs (47%) say their organization will increase investment in AI or machine learning this year and at the same time prioritize their data maturity, says BDO.

“AI is more easily deployable for repetitive tasks where the variables are consistent, such as compliance and reporting,” says BDO. “The more complex an operation, such as monitoring physical machinery, the more AI needs to be trained to properly execute. However, the potential benefits of integrating AI into manufacturers’ physical operations are significant.”

Manufacturers balance feeding data to AI with cybersecurity concerns

While the use of AI across multiple parts of the organization will increase next year, many manufacturers are wary of sharing more digital data, according to the survey.

“As continuing global geopolitical conflicts intensify the risk landscape, cybersecurity remains a top priority,” BDO says. “As a result, in 2024 manufacturers will deprioritize building the digital thread and focus on internal information transparency and security. AI performs best when it has access to more data — but sharing data with customers and vendors opens manufacturers up to increased cyber and data privacy risk.”

In the future, many manufacturers will accelerate using AI applications in their production process.

“In addition to leveraging generative AI, manufacturers will use inputs from computer vision and other sensors to integrate AI with physical machinery,” BDO says. “These technologies should be closely tied to manufacturers’ business strategies and enhancing their value proposition to stakeholders, such as through enabling a safer work environment, improving service levels, or developing a cost advantage in the marketplace.”

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B2B ecommerce to continue driving manufacturing, distributing growth

Mark Brohan — Tue, 16 Jan 2024 16:50:16 +0000

2023 is in the rear-view mirror for B2B buyers and sellers. And what lies ahead for both sides of the business equation for ecommerce in 2024 is growth — but with a big caveat.

There would be plenty of growth ahead in B2B ecommerce, even if the overall business market for manufacturing and distribution ended the year in a deep freeze. In 2023, the combined sales of U.S. manufacturers and distribution companies were flat at $14.87 trillion. That’s in sharp contrast to how buyers and sellers ended 2022, when total B2B sales grew 15%.

How will the B2B ecommerce market look in 2024?

Manufacturing sales grew just 3%, totaling $6.82 trillion in the last 12 months compared with $6.59 trillion in the prior year. In comparison, distributors fared even worse, with combined sales that declined by about 3% to $8.04 trillion from $8.26 trillion in 2022.

The market for B2B products and services is expected to rebound in 2024, with many economists forecasting the U.S. gross domestic product (GDP) to grow between 1.6% and 2%.

But regardless of how the overall American business economy performs in the year ahead, there are a couple of certainties: The continued growth in B2B digital commerce will drive — or at least highly impact — the expansion of business sales overall in 2024.

In 2023, B2B ecommerce once again grew at a healthy rate and in line with previous years.

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B2B manufacturer, distributor sales freeze in Q4 2023

Mark Brohan — Tue, 09 Jan 2024 19:58:13 +0000

The numbers for the year are in and they are not pretty. Manufacturers and distributors finished the fourth quarter of 2023 with total sales of $3.693 trillion. That’s a drop of about 1% from Q4 2022 sales of $3.723 trillion, based on a projection by Digital Commerce 360 using year-to-date data from the U.S. Department of Commerce.

High inflation, cutbacks in business spending and supply chain problems are major culprits responsible for flat B2B sales in 2023.

In December, manufacturers and distributors finished out the year with combined sales that dipped slightly to $1.217 trillion compared with sales of $1.229 trillion in December 2022. But even if B2B sales did hit the deep freeze in 2023, one area where manufacturers and distributors ramped up productivity was generating more ecommerce.

B2B manufacturer, distributor ecommerce sales remain prominent in Q4 2023

Just over 50% of B2B buyers make a digital purchase of a good or service for their organization daily, according to the 2023 B2B buyer’s survey from Digital Commerce 360 and Forrester Research. That includes nearly one-third, 32%, who make a business purchase several times per day. In comparison, 23% of survey respondents make weekly purchases. Meanwhile, 17% do so every 30 days.

B2B buyers also do their homework before ordering online. For example, 57% of B2B buyers list a manufacturer’s ecommerce site as their first choice, compared with consumer site (45%), Amazon Business (43%), search engine (40%) and distributor ecommerce site (33%).

For many buyers, a better user experience means the seller’s ecommerce site has the products, pricing, and related product selections they need to make an informed purchasing decision and then the ecommerce and order management tools to make placing the order fast, easy, and convenient.

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5 technology trends that will shape B2B ecommerce in 2024

Mark Brohan — Fri, 05 Jan 2024 19:07:26 +0000

Key ecommerce technologies will reshape the digital landscape of how B2B buyers sell to customers in 2024. From artificial intelligence and dynamic pricing to connected commerce and predictive analytics, here are five key ecommerce applications that will make B2B transactions more personalized and individualized this year.

B2B ecommerce technology trends

1. The continued importance of B2B ecommerce

B2B ecommerce has taken the lead as the most effective sales channel, rated first by 35% of respondents, ahead of in-person sales (26%), video conference (12%), email (10%), and telephone (8%).

2. Predictive B2B ecommerce will drive digital buyer behavior

The market for predictive analytics software was valued at $5.29 billion in 2020 and is forecasted to grow to $41.52 billion by 2028.

3. Dynamic pricing means B2B sellers react instantly to buyer price points

17% of ecommerce companies planned on starting to use dynamic pricing in 2021, and this number will grow to over 22% for 2024.

4. Sustainability matters in B2B ecommerce

B2B buyers would consider breaking off their relationship with a company if it did not take sustainability or social issues seriously

5. AI transforms B2B ecommerce to autonomous commerce

Autonomous commerce allows companies to create a seamless and personalized buying experience for their customer

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Study: Manufacturers need to follow through on digital transformation goals

Mark Brohan — Tue, 02 Jan 2024 19:59:17 +0000

Manufacturers have digital transformation top of mind as 2024 begins. But how fast manufacturers will turn thought and intentions into real action remains to be seen.

Manufacturers are prioritizing digital and technological advancement, but most still have not implemented robotics and automation and are not yet leading on the artificial intelligence cultural and economic shift, says Wipfli LLP in the State of Manufacturing 2024 outlook report.

“As an industry, manufacturing has work to do to maintain its place as a leader and innovator in the American economy,” the report says.

2024 is the time for manufacturers to reach digital transformation goals

Manufacturing technologies are evolving quickly, and the survey of 300 manufacturing executives indicated plans to invest in Industry 4.0 technologies and automation.

“There’s a clear willingness to take action in this area, and there’s also a lag in implementation,” the report says.

Robotics, automation, and artificial intelligence are making business processes in every industry smarter and more efficient. But the survey found most manufacturers are not using any of these tools in their operations. Data analytics is also standard for most successful businesses, or should be, yet only six in 10 manufacturers said they are using it, according to Wipfli.

Among those using AI, many manufacturers said they plan to use it to improve operations, sales, and overall growth.

The report found the following breakdown of how they expect to use AI:

70%, operations.
63%, sales and growth.
48%, robotic process automation/automation.
47%, financial reporting.
36%, front/back office.

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Online grocery sales grow year over year in November

Abbas Haleem — Wed, 20 Dec 2023 19:21:44 +0000

Online sales accounted for 11.7% of total weekly grocery spending in the last week of November, new survey data shows.

United States online grocery sales reached $8.1 billion in November, according to data from the monthly Brick Meets Click and Mercatus Grocery Shopping Survey. That’s 5.2% growth over November 2022’s online grocery sales, which reached $7.7 billion. Online grocery sales were divided into three key categories: delivery, pickup, and ship-to-home.

Is the online grocery market growing?

Survey data found that mass merchants surpassed supermarkets to become the primary retail destination — online and offline — for most households. In November, 42% of U.S. households used a mass merchant (for example: Walmart or Target) for most of their in-store or online grocery purchases, data showed. That’s a reversal from May when 42% of U.S. households reported using supermarkets as their primary stores.

“The current economic realities and omnichannel strategies are aiding mass retailers in attracting more customers today,” said David Bishop, partner at Brick Meets Click. “The price advantage that a mass rival, such as Walmart, enjoys is motivating cash-strapped households to shift where they shop, and mass customer engagement strategies are making it easier for those customers to shop the way they want.”

Year-over-year changes in fulfillment choice

Brick Meets Click and Mercatus define pickup as including in-store, curbside, lockers and drive-up. Delivery includes those from first- and third-party providers. Ship-to-home includes common and other parcel carriers.

In both 2023 and 2022, the pickup option brought in $3.6 billion in November online grocery sales. Delivery grew to $3.2 billion in online sales in 2023. That’s up from $2.9 billion in November 2022. Ship-to-home sales grew slightly to $1.3 billion in 2023. That’s an increase from $1.2 billion last year.

Online grocery sales among Top 1000 retailers

The Food/Beverage category of Top 1000 retailers — which includes grocers such as The Kroger Co. and Albertsons Inc. — brought in an estimated $31 billion in online sales in 2022. Notably, the category does not include mass merchants such as Walmart or Target. The Top 1000 is Digital Commerce 360’s ranking of the largest online retailers in North America by annual web sales.

The growth in online grocery sales among Food/Beverage retailers has been consistent for the last five years but, because of the COVID-19 pandemic, surged in 2020. That year, online grocery sales from Food/Beverage retailers more than doubled to $27.1 billion from $13.4 billion in 2019. The Food/Beverage category of the Top 1000 then had the largest compound annual growth rate (CAGR) from 2019 through 2022 — 32.4%. The Top 1000 category with the next-highest CAGR in that time frame was Health/Beauty, at 26.5%. On the low end, the Office Supplies category had the slowest growth at 7.4%.

Moreover, the grocery/fresh food subcategory grew faster than any other subcategory within the Food/Beverage from 2019 through 2022. It also outpaced growth for the category as a whole (34.8% for the subcategory versus 32.4% for the entire category). Then, Food/Beverage online sales grew by only 3.4% in 2022 as many consumers returned to shopping for food in supermarkets.

It’s also worth noting that growth in online sales of food and drink did not begin with the pandemic. In the three-year period from 2016 to 2019, Top 1000 sales in the Food/Beverage category posted a 32.7% CAGR.

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