Digital is accelerating business model change in the B2B landscape

15 November 2016 Consultancy.uk

Pursuit of the digitalisation agenda is enabling B2B organisations to transform their business models, expand outside their traditional markets and enable operational innovation, finds new research. In the coming months, B2B leaders expect to bolster their digital sales & marketing capacities, with e-commerce, big data and analytics top of their agenda.

In a bid to understand how digital and technology are impacting the B2B business landscape, Vanson Bourne, an independent research and consulting firm, conducted a study, commissioned by Intershop, among 400 decision-makers with responsibility for e-commerce, marketing, products, or strategy in the UK, France, Germany, the Nordics, Benelux, and the US. 

The study* finds that digital has, and will continue to, reshape the face of B2B practices across industries. Nearly every single respondent (99%) stated that digital has led to some form of marketplace disruption, as a result of technologies and digital tools changing the rules of engagement. Nearly half (47%) said that digital is the driving force behind more products and services being released, in combination with a higher frequency. This comes with a downside – digital-led turnover is drastically shortening the life span of existing products and services, putting a strain on innovation and business models. 46% stated their sector is becoming more global than before – traditional boundaries of doing business are broken down by digital and online platforms – while 37% reported an increase of stealth practices: competitors or unexpected market entrants that, within no time, successfully establish a mark.

Impact of digital in B2B landscape

Interestingly, companies in the Nordics are most at guard for stealth competitors. Across the board, 43% of respondents are concerned about fast moving competition, while in Scandinavia, nearly three quarters (72%) regard this as a concern. The French are the most confident of their own capabilities. More than three-quarters (77%) of the respondents surveyed believe that their organisation is digitalising at a faster rate than other market players, the French however score 95% on this aspect. 

The far-reaching influence of digital channels is having a profound business impact in the B2B realm, finds the study: four in ten (40%) respondents surveyed confirm the pursuit of digital transformation has resulted in a complete change of their organisation’s business model. Companies report that today 55% of their organisation is ‘digital’, with the supply chain (54%) and demand chain (52%) the most likely areas for implementation.

Competitive side of digitisation

B2B sales

The study also looked into how digital is impacting B2B sales, finding that operations have over the years been overhauled through the possibilities of enabling technology. A staggering 99% of respondents’ organisations surveyed said that digitalisation is transforming operations and processes. In terms of the benefits, half (50%) reported digital has made sales more cost-effective while 48% said the sales process is more efficient. Other main benefits include:

  • 43% are successfully selling to customers that would not buy from them before
  • Over one-third (36%) report that the have been able to expand globally at lower risk
  • 44% are generating more total sales - and more sales per representative
  • 40% are leveraging digital B2B channels to persuade existing customers to purchase more items across more product categories

Impact of digital on business model

When asked which channels they plan to use to sell products and services in the next 12 months, organisations anticipate their own e-commerce site remaining the most widely used channel (71%). However, other digital channels including B2B market places such as Amazon or Alibaba (up from 41% to 49%), social media (growing from 41% to 46%) and mobile shops (up from 22% to 32%) are expected to increase in use over this time frame. 

On the back of the growing importance of online and digital channels, a large majority of companies indicated that they are planning to ramp up their B2B sales efforts. Almost half the respondents (46%) confirmed tech savvy leaders like the CEO and CIO are spearheading their digital transformations. 40% of organisations say the IT department as a whole is one of the primary drivers of digitalisation with a third (33%) saying it’s the non-C-level senior IT team that is accelerating digital adoption. For others, however, it is senior marketing and sales management (29%) and operations management (25%) – individuals working at the sharp end who need to enable their organisation to become more agile fast – who play a leading implementation role.

B2B Sales channels

Big Data, the Internet of Things (IoT) and smart products are earmarked as the trends that are expected to have the most value added on B2B sales. 54% of the respondents highlighted that Big Data will be their organisation´s next big investment, despite more than half acknowledging that their company does not make effective use of the technology. An impressive 95% expect to benefit from IoT and smart automation in the near to medium term, with 37% stating they plan to invest in IoT over the next 12 months.

According to another report, the European B2C e-commerce market is now worth around €500 billion.

* The study by Vanson Bourne and Intershop, titled the 'E-Commerce Report 2016', can be downloaded on this page.

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