Digital commerce is growing at an accelerated pace the world over, including among business-to-business (B2B) companies in emerging economies such as South Africa.
The phenomenon of digital commerce has piled up more pressure on B2B sales executives to relook and overhaul the way their organisations deliver goods and services to customers in this milieu.
Essentially, outdated B2B business models and customer service channels that are not immersed in digitisation mean certain companies stand to lose out from amassing fantastic profits brought about by the world of digital commerce.
The latest survey conducted by Accenture of over 1000 B2B sales executives to understand the changing digital landscape of the B2B market, shows that by 2020, revenue from B2B digital commerce will almost double, accounting for around half of all B2B revenues.
For instance, in the United States alone, the B2B Commerce market will hit $1.2 trillion by 2021. Meanwhile, global revenue from offline commerce channels will decrease by almost 20% in the same period, raising the need for local B2B companies to digitise their channels.
This shift has far reaching implications for how B2B organisations in South Africa need to think about their digital channels and reimagine their existing traditional ones. Thus by building their digital commerce strategies, benchmarking performance and aligning resources, capabilities and tools, they can deliver revenue growth through digital channels.
Digital commerce is the buying and selling of goods and services using the Internet, mobile networks and commerce infrastructure. It includes the marketing activities that support these transactions, including people, processes and technologies to execute the offering of development content, analytics, promotion, pricing, customer acquisition and retention, and customer experience at all touchpoints throughout the customer buying journey.
Latest literature on this subject seems to indicate that digital commerce is at an inflection point. For example, the B2B digital experience is in early stages of the maturity curve. In fact, a little over half of B2B companies only started implementing a digital strategy in the last three years.
What this means is that, the time is ripe for South African B2B organisations to embrace digital commerce by revamping their customer experience to digital and by launching digital sales channels and maximise profits.
One of the important reasons for local B2B organisations to embrace digital commerce is that digital commerce is expected to account for almost 50% of B2B businesses' total revenue over the next two years, up from 29% in 2017.
Online transactions will almost double from 24% to 42%. In some markets, for example, some B2B companies are dialling up digital services such as online-only loyalty programmes (42%), online training for teams and clients (35%) and incentives for making online sales (32%).
South African B2B companies must move away from thinking that digital is simply a commercial order entry channel. Instead, they need to see it as a driver of omni-channel, end-to-end customer experiences combining branches, distributors, salespeople and contact centres seamlessly with the web.
Across industries, 69% of customers want omni-channel and multichannel services, and multichannel customers are typically 15% more profitable than digital-only customers. They're 25% more profitable than "human-only experiences," according to the Accenture Survey.
In this regard, B2B businesses across industries must respond to the changing needs of their customers, new market entrants and the often hard-to-spot investments of their competitors.
Ignoring these will put their market share at risk and diminish their differentiating qualities, even if their core products and services are unique in the market.
In our view, companies who have invested in technology and services the most thus far will invest even more aggressively. We also foresee a future where big players will only get bigger, while companies that have invested and are currently investing modestly will fall behind.
If B2B companies do not know where their customers are, what they need and how they interact, they will miss out on profitable opportunities. Hence, we urge South African B2B organisations to start thinking about this, planning for this and digitise their channels and platforms.
In the final analysis, the advance towards a digital commerce worldwide has begun in earnest and by 2020 digital customer experience and digital sales channels will become the primary points of differentiation for B2B companies.
South African brands that adapt to the changing expectations and behaviours stand to benefit, while those that ignore the trend will risk losing significant market share and see their businesses disrupted.
Thus we appeal to local B2B organisations to join the party by transforming to a world of digital commerce.
* By Hans Zachar, MD for Technology Strategy at Accenture, Africa.