Gartner estimates that 80% of B2B sales interactions between buyers and suppliers will occur digitally within the next 3 years – and digitization in commerce will only accelerate.
The primary goal throughout our company’s history has and always will be to streamline and automate trade between B2B buyers and suppliers. What began with a goal to revolutionize the PunchOut process has since expanded into a broad scope of solutions that solve a variety of challenges within the B2B buy/sell process – a process that is growing increasingly complex.
As the market continues to evolve, so will our solutions.
TradeCentric, formerly PunchOut2Go, maintains a close pulse on the market to ensure our roadmap is harmonious with the industry’s evolution. Here are the top eCommerce trends affecting B2B trade and our technology investment moving forward, as well as how they may impact your business.
B2B eCommerce is Booming
Unsurprisingly, the vast majority of purchasing has moved online – and that includes business purchasing.
McKinsey & Company reports that B2B eCommerce surpassed in-person sales in 2021, with 65% of customers opting for eCommerce. Last year was also the first year B2B suppliers were more likely to offer eCommerce than in-person sales.
As purchasing shifts online, businesses are more than willing to invest in eCommerce capabilities. In fact, a third of businesses rank eCommerce as the single most effective channel, putting it well ahead of in-person transactions.
For any businesses that have not yet transitioned to eCommerce, they run the risk of being disrupted by those that are more strategic versus reactive to the rapid adoption of eCommerce. Analysts expect B2B eCommerce growth to continue in 2022, with a compound annual growth rate of 18.7% between 2021 and 2028.
Forward-looking suppliers are adapting to their customer’s buying preferences because they recognize the shift toward eCommerce could be what differentiates their business from their peers.
Not only does eCommerce enable more selling opportunities by providing real-time inventory levels and pricing, it also helps maintain competitive edge. Buyers are more willing to buy from a company that can automate the purchasing process and easily integrate into their existing systems.
Simply put, if B2B eCommerce isn’t part of your existing sales strategy, you risk being left behind when customers choose competitors with a superior digital procurement experience.
eProcurement is Key to Buyers’ B2B eCommerce Strategy
There are two sides to every transaction, and eProcurement plays just as much a role as eCommerce.
Sales conducted via eProcurement increased nearly 20% last year, from $798.4 billion to $934.2 billion. There is limitless opportunity in digital purchasing, with eProcurement sales on track to top $1 trillion in 2022 and global spending on eProcurement order management software expected to exceed $1 billion this year.
The primary goal of eProcurement platforms such as Coupa, Jaggaer, SAP Ariba and many others is to help buyers streamline and centralize procurement processes. But another key advantage of eProcurement solutions is their ability to connect with eCommerce software.
Nearly three-fourths of organizations use automation technologies to streamline business processes, and eCommerce-based automation helps procurement run faster, cheaper and more efficiently.
eCommerce integration and automation offers many benefits: buyers can access approved suppliers directly within their eProcurement platform, two-way data transfer is handled automatically and error-prone manual data entry workflows are no longer necessary.
The advantage to suppliers is this: a better, more streamlined purchasing experience for customers translates to higher volume and more frequent sales. Suppliers should explore ways to integrate their eCommerce systems with their customers’ eProcurement solutions to create seamless transactions that drive efficiency for all.
Supply Chain Disruption Will Continue
Global supply chains have experienced unprecedented and unpredictable volatility over the last two years. Existing supply chain challenges were compounded by the global pandemic, and businesses have been hit with wave after wave of ongoing disruptions.
According to the Hubs Supply Chain Resilience Report 2021, 75% of businesses experienced external disruptions to their manufacturing supply chain and 56% experienced more disruption than in the previous year.
Experts predict supply chain turmoil will continue throughout the year, forcing companies and consumers alike to accept a new normal.
While COVID-19 may have created many of the supply chain challenges businesses face today, the pandemic isn’t the only cause of supply chain disruption. There are ongoing parts shortages as a result of regional shutdowns and an influx of order volumes. One example is the global chip shortage, which impacts nearly every industry from electronics to auto manufacturing and industrial machinery. Along with inventory scarcity, businesses are experiencing significant shipping delays on top of rising transportation costs.
In the face of ongoing disruptions, buyers must quickly identify ways to diversify and mitigate risk within the supply chain. One strategy is to onboard new suppliers.
B2B marketplaces can simplify the research process, allowing buyers to discover a new pool of suppliers. Sellers within these marketplaces are required to integrate with the Operators that source third-party products and services. The marketplace Operators are then required to rapidly integrate with buyers’ eProcurement systems in order to automate the transactional data between buyers and sellers. This results in customers being enabled to place orders immediately and quickly access the items they need to keep the business moving forward.
Businesses with an eCommerce platform are more likely to make the vendor selection shortlist when buyers or marketplace operators are looking to onboard and connect with new suppliers quickly.
API-Driven Automation & iPaaS-based Solutions Are the Future
In the past, procurement automation was limited to static Catalog Interchange Format (CIF) files or complex CDI catalogs. These older technologies are too simplistic and unreliable to provide the rich experience today’s users expect.
Modern B2B commerce environments leverage API-driven integration and automation to provide reliable, responsive, up-to-date purchasing data. At the same time, adoption of purpose-built B2B Integration Platform as a Service (iPaaS) is growing rapidly as companies seek a link between B2B eCommerce stores and customer eProcurement or ERP platforms.
A B2B iPaaS transparently handles two-way communication between a supplier and their customer, allowing sellers to offer procure-to-pay automation without the cost and hassle of custom integration projects and ongoing technical support.
In 2020, iPaaS solutions generated $3.74 billion in revenue on the back of a year-on-year growth rate of 38.7%. The growth doesn’t stop there. Gartner predicts the iPaaS market will exceed $9 billion by 2025.
As B2B transactions become increasingly digital, automation is necessary to keep pace with the flow between buyers and sellers. By automating and integrating B2B transactions – including purchase orders, invoices, requests for quotes, order acknowledgement, advanced shipping notifications and punchout solutions – buyers and sellers can more quickly and reliably connect to more trading partners while providing a more modern experience.
Setting Our Sights on the Future
Our company occupies a unique position in the market. We are central to the buyer/supplier trading process, and this “trade-centric” positioning has been a cornerstone of our development as a business over the years. For this reason, we believe it is necessary to transition to a brand name that better reflects the full scope of our position within the market.
This is why we are excited for our new chapter as TradeCentric. This new name better reflects our deep connection to the buyer and supplier community, and we are excited to continue delivering on the commitment we’ve made to our clients for the last decade: enabling a modern, seamless, streamlined trading experience.
Troy Lynch, CEO