Will 2023 become the year of B2B digital transformation? While B2C brands have been pursuing it since Amazon launched one-click checkout and many scrambled to update their technology when the pandemic hit, only recently have B2B leaders started to feel pressure to step up their digital game.
A combination of factors ranging from overall higher expectations B2B buyers now have of what a digital experience should look like and the desire to retain a competitive edge to the simple fact that the majority of buyers (64%) are digitally-native Millenials and Gen Z’ers. According to Michael Scholz, Vice President of Product and Customer Marketing at commercetools, who attended two B2B events, the annual B2B Online conference and the Master B2B Summit last month, “The whole digital transformation journey is hitting B2Bs in a major way right now. Where many B2B leaders used to feel digital commerce didn’t fit the business model or that there weren’t solutions that could support their unique needs, that’s not the case anymore so it’s become a priority.”
Reviewing the conversations he had at both events, Michael pointed to three topics that are top of mind for B2B leaders exploring how to start their digital transformation journey — data management, search and AI.
The value of data
66% of B2B buyers are dissatisfied with their online purchasing experience.
This disconcerting statistic can be tied directly to the fact that B2Bs struggle with data collection and management, and without a firm grasp on it, there’s no way to deliver the personalized, B2C-like experiences that buyers expect today. Michael confirms, “What B2B leaders are realizing is that they need a platform that allows them to really reconsider the entire data model because, in B2B, the number of SKUs can be daunting, especially when you factor in the number of variations and configurations they have along with bundling options. They need a flexible data model that can support millions of SKUs, as well as provide the freedom to extend and customize fields to fit their unique requirements.”
He says attendees expressed concern about how to ensure the integrity and quality of their data along with how to migrate it to get the best result, pointing out that it’s critical they address these issues because ultimately, “Data is the backbone of the entire commerce experience. If you have crappy data, it doesn’t matter if you have amazing search capabilities.”
As the importance of data was also a key topic of the B2B Online discussion and the focus of the blog post recapping the event, Michael once again shared that commercetools advises all its customers to start their digital transformation journey with a deep dive into their data. “Before they can even think about utilizing their data, they need to make sure they have access to all their data.” He explained that while tech teams get super excited to start using the flexible data model commercetools offers as quickly as possible, it’s important to first take a step back and spend some time assessing the data they have, considering how they can clean and enrich it, as well as creating strategies to leverage it better. “It’s really important to do this in the beginning. We encourage and support this process because the ultimate customer experience that you want to serve is inherently connected to the data management that you apply.”
The importance of search
61% of sellers said they've lost sales because their site search wasn't good enough.
For a long time, the discovery process wasn’t a relevant step in the B2B shopping journey. The typical buyer already knew the products they needed to purchase and just needed to be able to find them and order them. Today, buyers want a B2B search experience on par with what B2C brands deliver, which means it needs to be relevant, personalized and fast. Plus, since typical B2Bs offer an extensive number of SKUs with multiple variables, accuracy is a critical factor.
Search also plays a key role as part of the B2B buyer’s omnichannel journey. One of the pushbacks B2Bs had against digital transformation was the fear eCommerce would kill the sales of their traditional field representatives, but that hasn’t happened at all. Instead, according to the soon-to-be-published State of B2B eCommerce Report, 51% of buyers research their purchases online before making a purchase offline, confirming the channels work together to guide buyers to a decision.
While many summit attendees voiced the opinion that there’s not an adequate B2B search solution available, Michael called out Coveo, Bloomreach and Algolia as vendors that have a grasp on the needs of B2Bs. Bloomreach acknowledges that translating the in-person buyer experience to eCommerce is challenging for many reasons; from the technically complicated products B2Bs often sell to the diversity of the audience, SKU count, multiple touchpoints and siloed systems. That said, they liken their product discovery solution to a digital salesperson. “Like with sales reps, its core purpose is to understand the buyer and what they need. But, it does this at scale with every customer segment and interaction on your website.”
The power of generative AI
61% of sellers said they were planning on spending on AI tools in 2023.
With data and search sorted out, Michael said the discussion turned to how B2Bs can use generative AI to enhance the buying journey. “Once you have all your product data uploaded, generative AI can look at the entire catalog and can help you define your categories, product types, facets and, most importantly, create a product description for each one. ”In addition, it also makes things easier when you are importing this kind of data from different suppliers. One of the great things about generative AI and PIM, especially for multi-brand companies, is that you can tell it to create product descriptions based on the brand and tone of voice of any sub-brand, which can save a lot of time.”
To provide an example, he said that while a basic T-shirt is always the same, if you’re selling T-shirts from three different brands — say, Armani, Gucci and New York & Co.— they have very different audiences, and generative AI can create descriptions that will resonate with each one.
Michael also touched on how B2Bs can use generative AI for promotions, calling it the perfect use case. “It can help you create promotions, bundle promotions and determine how these promotions work for specific products.”
The case for composable commerce
Regardless of what B2B leaders are thinking about in the process of setting digital transformation in motion, at the core is making technology decisions that enable them to leverage data, search and generative AI to enhance the buying journey and drive sales. And, at this point, composable commerce is the only approach that can truly set a business up for long-term success, ensuring that no matter how many new innovations emerge or challenges arise in the future, they’ll be able to evolve their tech stack easily and without risk to daily operations.
Michael said he sees a lot of B2B leaders struggling with understanding the real TCO (Total Cost of Ownership) of composable commerce. “The thing is, the traditional equation doesn’t work anymore. TCO isn’t just about licensing and implementation costs. There’s agility, efficiency, investments in your team, cost avoidance, de-risking projects, productivity gains — all these things that are difficult to quantify.”
That said, he stressed, it’s important to analyze all these factors in making technology decisions. “There’s this assumption that going digital is an inherent success, but just because you build a website and put products on it, doesn’t mean it’s going to fly. Leaders need to think about what is good and what is better. What will be better for growth?”
“If you truly want to innovate and push the boundaries to differentiate yourself from the competition, build out new channels, work on marketplaces — things that will increase customer retention and drive revenue — then digital transformation is imperative.”
Download our white paper, Pivotal Trends and Predictions in B2B Digital Commerce in 2023, to learn more about what’s happening in the B2B world right now, as well as read about B2B brands that have successfully transformed their digital business with commercetools.