B2b2dot0 provides software and services to enable ecommerce functionality to business running the SAP ERP platform.
Recently, we had the opportunity to sit down with the company’s CEO, Sam Bayer, who has nearly two decades experience in the ecommerce space, to discuss his views of the current B2B ecommerce landscape, and trends he’s been seeing in the marketplace.
The following are excerpts taken from our wide-ranging discussion. (Besides our common commitment of providing digital commerce services to businesses it should be noted that Gorilla Group has no direct business affiliation with Mr. Bayer, or b2b2dot0, and the views expressed here are his own.)
How has the landscape with ecommerce changed? What do you see the future holding?
Clearly, there has been some consolidation going on, and clearly the buzzword is omni-channel. B2C has also been a major influencer in changing the expectations of the B2B world The market is definitely transitioning. The younger generation is coming into the B2B workplace and bringing with them higher expectations for how they want to do business. They’re putting demands on the platform. They are saying get rid of the faxes and get it on the smart phone.
One of the things that I believe differentiates B2B2dot0 is we look at the world of B2B commerce from the inside out; not the outside in. And what I mean by that is all of our manufacturers are already doing business with their customers today. They’re phoning them, they’re faxing them, they’re emailing them, they’re sending EDIs [Electronic Data Interchange] to them, but they are transacting business with all of them today. The problem with those channels is that they’re inefficient. Manufacturers and their customers want to make those interactions more efficient. And a website is a wonderful way to do that.
The challenge is that the core systems that are interacting with customers are very complicated in the B2B world. Pricing and shipping rules and credit checks and tax calculations and contract verification and freight and delivery, it’s all very complicated. The platforms today are still focusing on content. They’re still focusing on the casual user. So, platform-wise I don’t see people worried enough about the integration even though I perceive that that’s the number one problem to get people really started in the B2B ecommerce world. Merchandising is not the problem for the Industrial Manufacturer.
Any general trends that you’ve been seeing in B2B commerce as this area matures?
What we’re seeing now is a lot of our traditional manufacturers who have been running their ecommerce channel for some time have taken a lot of the waste out of the servicing their customers, and now because their business is running more efficiently they are saying: ‘maybe we should revisit our distribution strategy, our warehousing, our fulfillment model. Maybe we can go directly to the consumer’. They’re looking at providing website functionality for their sales organizations, and asking themselves ‘what other business processes can we get to the web?’ People are looking at simplifying returns processes, at taking the friction out of the end-of-month online bill payment. Generally, we find our clients are investigating new markets, different distribution channels, and making their existing employees more effective.
The term B2B is almost ridiculously broad. Are there specific industries within the B2B space that you see embracing ecommerce more quickly than others?
The market that we are most familiar with is the manufacturers who are predominately industrial in nature. So, basically most of our projects are not being driven by the marketing department, they’re being driven by the customer service and IT organizations who are trying to make the interaction with their clients more efficient. The early adopters to B2B ecommerce were companies with products in the retail channel, rather than the industrial companies that sell machinery or replacement parts for machinery.
B2B companies, particularly industrial companies, need a more efficient way to do business, but historically, getting into ecommerce has always been very costly. And cost is a major concern. These are companies that have a niche audience. They’re not looking at an ecommerce channel as a way to grow their brand.
They want a nice B2B ecommerce platform that is fast to implement, that can adhere to all those complex business rules. Those industrial companies that have been sitting on the sidelines for decades envious of everybody else and basically saying ‘we can’t justify the expense’ are now being pushed into finding a solution.
Do you see ecommerce needs differing across industries within B2B?
It really depends on the product and the distribution channel. The more consumer-like the product, there is a lot of emphasis on content and presentation and rich user experience and rich content. So the platform needs to support that.
We find that the more industrial B2B companies do not necessarily want a catalog to be implemented in phase 1. They literally are going into production with essentially a B2B ecommerce portal for their power users to upload orders, track orders, and download order history. It’s a transaction-based website and that’s a lot different than what we think of as a traditional ecommerce site.
Are there some common mistakes you come across as companies either enter ecommerce for the first time or are significantly upgrading their ecommerce channels?
Some companies don’t crawl before they walk before they run. They just want to go from a standstill to a run. And they want to do it with a big bang. They don’t want to treat their ecommerce project like initiatives that have journeys. They want to treat them as a goal and define everything that they can at once and get it done. The problem is that they don’t have the skills or the organizational maturity to succeed with that approach.
Take the Avon collapse that just occurred in Canada. There was a lot of hoopla about $125 million just washed down the drain because people had grand visions and figured in 3 years they’d get it done, whereas every 3-6 months they could have released something in a more agile way and grown the system and really seen how people were going to use it. And bear in mind that this has no reflection on the SAP system itself.
So the biggest mistake is not to look at it as an iterative project. Along with that is the related mistake of treating all your customers the same. If you parse out your customers and break out projects according to customers and roles then you could put together a nice, long, iterative plan on how to get from where you are today to nirvana. Maybe they are under great pressure because of competition; they think they’ve got to do it all.
B2B ecommerce, at its heart, is about the transaction. If you don’t get the transaction right, nothing else is going to matter.
B2B2dot0 seems to be aligned with Magento and SAP. What are some of the reasons behind that and the strategy that goes along with it?
Our corporate strategy is first and foremost around the SAP market. We have never veered from that. The reason we love SAP so much is they truly have the world’s best platform for core businesses to run a true omni-channel ecommerce effort with customers. It is a world-class ERP. They’ve got market share, they’ve got an awesome base of information, and they’ve got a great API.
The reason we picked Magento is because our target market is the industrial companies which are very cost conscious, and the Magento Enterprise platform provides excellent value. So, we partnered with SAP because they’ve got the clients and they’ve got the ERP system and all the business rules and data to transact business. We partnered with Magento because they’ve got a really great performing front end. Both are critical to our success. Our focus is on the transaction. There is no B2B ecommerce without transaction and without integration to all of that information in the back-end ERP system.
Any final thoughts?
It’s become a common buzzword in the industry that all B2B corporations need a highly consumerized experience. At least in the industrial segment of the SAP world that we work with, that is not necessarily a correct assumption. SAP has everything that needs to be delivered to a user in the B2B ecommerce world and not all B2B ecommerce users are casual users that need to be educated prior to purchase. These are industrial companies. The bulk of transactions are between very knowledgeable users buying similar products over and over again from their manufacturers. That is the reality of where the growth of B2B ecommerce world is going to be, not in the hype of the consumerization of B2B ecommerce. We grew 80% last year. So there must be something there, right?