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Technology / AI and automation

Amazon Business: A threat to B2B e-Commerce?

When the e-tail giant’s business offering arrives in the UK any day, will it make B2B e-commerce platforms defunct? Michiel Schipperus, CEO of Sana Commerce, provides his view.

What’s the background?

December 2016 saw Amazon’s growing business offering open up in Germany, and the UK is its next target – due in ‘early 2017’.

Since the launch of Amazon Supply in 2012, Amazon has been toying with the B2B

Michiel Schipperus, CEO of Sana Commerce.

market. Speculation has concentrated on its power to succeed and its potential to usurp the position of many specialist e-commerce platforms and web shops already in use by manufacturers, wholesalers and distributors online.

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In 2015 the online giant stepped up its commitment to B2B with the US launch of Amazon Business. This was a dedicated attempt to appeal to corporate procurement with properly vetted business suppliers, an appropriate approvals system, reporting and analysis, procurement integration and 30 days payment terms.

 

Sana is an e-commerce vendor for B2B. Do you view Amazon Business as a threat to your market as it makes its way over the pond?

No, I see it as complimentary. Amazon Business give companies the opportunity to increase market reach and sales for those offering mass market, standardised B2B products.

However, challenges still remain for the thousands of B2B organisations selling niche products at the top end of a supply chain. For these companies, understanding their customer requirements and being able to deliver a strong buying experience is key to maintaining revenue and growth – this is where our deeper B2B e-commerce capability is really targeted.

e-Commerce platforms like Sana’s integrate directly into the customer’s ERP system, essentially performing calculations inside the ERP using its own business logic. This ensures there is only ever one version of the truth and the customer insight and buying experience is protected. In contrast, with Amazon Business and other platforms, organisations run the risk of having to maintain multiple buying systems working outside of the ERP, creating new interfaces duplicating business logic and data specially for Amazon Business.

Although it offers procurement system integration Amazon isn’t a fully integrated solution, meaning that organisations are unable to offer things like customer specific pricing or product assortments, which typify more complex B2B sales.

However, customers with a range of sales needs and channels can benefit from running their webstore side by side with marketplaces by exporting detailed product information from the ERP directly into the likes of eBay, Amazon and Google. Product sets can be defined and exported using ERP filtering, and semantically enriched master data for web-improved descriptions and images to deliver a professional catalogue to these marketplaces.

It could be a case of using dedicated e-Commerce as the principle platform for complex products and transactions with repeat customers but adding Amazon Business as a secondary channel to market for simple ad hoc customer transactions.

Another consideration is the growing popularity of omni-channel sales and marketing. How will Amazon Business fit into delivering a single, customer experience across all customer touch points? This is particularly important for companies with technical or specialty products who often need to talk directly with customers or negotiate additional discounts as part of the online sales process.

While Amazon Business definitely has a role to play, often the motivations behind e-commerce in B2B, such as supporting complex sales and rich back office integration are different to the world of B2C. Using a consumer-designed storefront with a few B2B web store features may limit a company’s ability to really understand their B2B buyers. Having this insight makes it easier to see where you can improve the buying experience – whether that’s online or offline.

 

But given Amazon Business’ extensive reach, what are the benefits of implementing your own B2B web shop?

Implementing your own web shop enables you to build and create an omni-channel strategy that ensures each and every customer receives the best experience wherever they are in the sales cycle and however they choose to get in touch. You’re mapping the technology to your business and sales model, rather than having to shoehorn the latter into a standardised tool for the job.

Doing this enables you to develop strong customer relationships online, meaning you can meet customer needs more closely and, as a result, increase the likelihood of repeat and growing sales. Don’t forget that a lot of B2B is about preferred supply and repeat custom – not simply searching online to see who has a standard product at the cheapest price that day.

A dedicated web store also provides you with the ability to offer different complex product offerings, whether that’s specialised pricing or additional business services and processes such as integrated technical support or the opportunity to ask questions before clicking ‘buy’.  Your own webstore also enables you to easily add new products and promote these to specific relevant segments of your customer base.

 

Is it possible to create additional revenue using your own B2B online shop, while at the same time maximizing the benefits from marketplaces like Amazon Business?

Absolutely. Organisations should certainly consider Amazon Business as a potential channel to market like any other. By incorporating Amazon Business into its channel strategy, companies can use it to reach new customers, while ensuring that existing revenues are maintained and protected. But first I recommend that B2B organisations consider the following:

  • Take a strategic view – consider your B2B e-commerce options in line with your overall sales and customer relationship activities and plans.
  • Ensure that when creating and operating a B2B web shop it fully supports your individual business objectives and demonstrates your USPs to ensure that you’re able to gain stand out across the marketplace.
  • Look at your sales strategy as a whole and decide which channels are the most effective. Think about the needs of different customers, such as those buying offline, those who require more in-depth sales support and those that you can sell to quickly online. Decide which channels are the most effective for reaching each audience.
  • Continuously watch market and customer developments and adapt your digital sales and customer relationship activities accordingly.

This article is from the CBROnline archive: some formatting and images may not be present.