The webinar is no longer available on-demand, please see the recap below:

Agenda

• Growth Drivers in B2B eCommerce
• The Range of Models in B2B eCommerce
• The Evolving B2B Site

Growth in B2B eCommerce

Business to business eCommerce has been evolving quickly.

It’s harder to observe B2B trends than it is for B2C because there is no leading site you can explore – most of B2B’s features and functionality lies behind a veil. Much of the user interfaces, features, levels of integration, workflow and business processes are proprietary.

Key Growth Drivers For B2B

• Improve operational efficiency
• Customer self-service and process automation
• Improvement in order capture and processing
• Fueled by the downturn and changes in the workforce
• Build stronger direct relationships
• Make it easier to do business
• Develop the brand
• Improve availability, responsiveness, and service
• Need to develop a direct relationships with customers
• Grow the business
• Acquire new customers in their preferred channel
• Grow through increased channel touch-points
• Retain existing customers switching channels
• Prevent customers leaving with sales rep changes
• Keeping up
• Prevent competitors from capturing market share
• B2B customer expectations are driven by B2C
• Evolving online B2B models are pushing the experiences forward – B2b, B2B2C, B2B2B

Many B2B transactions still take place through fax, phone, inside and field sales reps. The B2B ecommerce site offers the chance to improve quality, timeliness of order capture and efficiency of process. It also allows for a stronger relationship, making it easier to do business 24/7. This is especially useful for a branded manufacturer selling to boutiques, where the order may be placed by the boutique owner at 10pm after the kids have gone to bed, for example. The manufacturer would not find it cost efficient to keep the call center open at all hours, but B2B customers may want to transact on their own schedule.

The website also strengthens the relationship between the company and the end customer, rather than relying on a sales reps who own accounts, and may take business with them if they ever leave the company.

B2C retailers have learned that multichannel customers increase the value of that customer to the business, and it works the same for B2B.

Often, B2B ecommerce projects are inspired by what the competition is doing. Innovation and competitive pressure is driving much of the growth in the ecommerce channel.

What’s Unique About B2B Sites?

What Makes B2B Different than B2C?

• Authentication and initiating orders
• Custom catalogs, prices and offers
• Orders and lists created over time
• Order workflow, incl. quotation, punchout
• Scheduled delivery and fulfillment options
• Off-line sales integration, marketing support
• Multiple product and bulk order entry
• Product configuration and customization
• Complex promotions unique to B2B
• Invoicing, Remittance and Reporting

Business to business eCommerce is not simple.

Authentication – Required registration – When you think about direct-to-consumer, you want to minimize the need for authentication / log in. Many B2C sites have learned they need to offer guest checkout for better conversion. Certainly there are marketing and service advantages to customer login for the B2C, but it’s markedly different in B2B where it’s far more important to show proper content, catalog, pricing etc. as part of your negotiations with them or their user type/role.

Unique promotions in B2B – Promotions can get very complex in B2B, with geography, terms offered, order minimums, book-by and ship-by dates determining who is eligible for what promotion. There may be new promotions daily to move product as quickly as possible. What is typically too complicated for a consumer to evaluate is very common in B2B.

Multiple and Bulk Ordering – For this you must enable businesses to order across all the variants of the product (example given is shoes – choose your assortment of size/width/color). You must also show availability dates in same interface, which may vary as you replenish stock. Typically you wouldn’t see this in B2C.

Quick Order Capability – This is when the client can order entire an “end cap” which is pre-merchandised and ready to go with back stock for a retail store.

Product Configuration – The ability to bundle and configure a product to order may involve custom manufacturing and other processes you wouldn’t find in B2C.

Unique Reporting Needs – A B2C site typically wouldn’t allow a customer to run reports on purchase history, but this is common in B2B. A procurement manager needs to find who in the organization has ordered what, and a retail chain with different geographic divisions wants want to keep tabs on what’s being ordered where.

Customer Self Service – Change and view orders, create inquiries, create quotes, view returns etc. are all important to B2B. Customers may still like to call but there’s a benefit to the customer and organization to offer these capabilities online (convenience, cost savings).

What Is Similar Between B2B and B2C?

• Online Merchandising
• Search
• Categorization
• Cross-Sells / Up-Sells
• Online Marketing
• Segmentation / Targeting
• Recency / Frequency
• Similar management challenges
• Heavy product content burden
• Integrating with large enterprise systems
• Customer Self Service

Product content (images, information, user guides, reviews, videos) is still important, and even more important than it is on B2C sites when the buyer requires technical specs, how the product should be used and education on specific details of the product.

Similarly, site search is important, especially for industry terms that are frequently misspelled (Latin or brand names, think of the pharmaceutical industry). Autosuggestion is helpful.

Cross-sell/upsell, bundling, product configurators, comparison tools etc. are also very important in B2B.

The Range of Models in B2B Ecommerce

A Range of Models At times supported through a single solution

B2C – .com site
B2B – large wholesale account site -> dealer
B2B2b – dealer -> distributor portal -> small parts dealer
B2b2C – product extranet -> distributor portal -> dealer B2C shop -> consumer
B2E – sales support intranet -> support materials
B2C / B2B – call center
B2B2C – B2B2C platform -> .com retailer site

Example: Viking sells professional kitchen products and has a consumer site, distributor extranet, services extranet and culinary extranet.

An Example of B2B2C or “White-Labeling”

Michelin tires runs the Costco tire store, servicing the tire needs online for the Costco customer, even down to the servicing inside the shop. Especially when products are expensive to stock, it may make sense to seek this kind of support from the manufacturer.

The Evolving B2B Site

The Evolving B2B Site

• Extreme Personalization
• May deliver versions based on role, location, contract, buying history
• Customized catalogs, assortments or product exclusivity to different customers or regions
• Personalized alerts and reminders of promos, orders, quotes, etc.
• Searchandising, including guided navigation
• Improved ordering processes
• Robust self-service
• Multichannel integration
• Mobile UI, apps
• Content and offer targeting
• Based on role, segment, ordering history
• Integrated with marketing tools
• Merchandised landing pages
• Promotions and special pricing
• Visualization tools / Product configuration
• Managing & leveraging content across channels
• SEO

Brian showed screenshot examples of:

• Customized content
• Rich product content
• Search results refinement
• Templated order forms
• PO history & account details
• Quick order based on past purchases
• Product configuration
• Automated product recommendations
• Browser search bar for quick navigation
• Custom catalog development
• Product care and use instructions

Key Take-Aways

• Design your site for the customer, who is that end user who needs the product, the information, to self-service?
• Don’t design for the sales manager’s goals and expose your “corporate underpants.”
• Employ familiar UI principles from online retail.
• Focus on marketing and merchandising tactics like cross-sell/upsell, product comparison etc.
• Don’t let internal business processes, systems, and sacred cows drive the online experience.

Contact Brian

Brian K. Walker
bwalker @ forrester.com
twitter.com/bkwalker

Next Webinar

Bridging the technology and marketing divide for ecommerce success
Tuesday, January 26, 2010
9am PST / 12pm EST

Ecommerce has always created its share of internal strains within organizations. The tension between online vs. offline operations and between brand vs. direct marketing are two common examples. Even more persistent is the tension between marketers and technologists, with both groups accusing each other of an inability to “get it” and acting as an obstacle to an efficiently running business.

Learn about how bridging the technology vs. marketing divide has gotten easier as the technology landscape has changed—while such changes are helpful, they are not sufficient to completely close the gap. In this one hour webinar, Rob Schmults, CMO of Smart Destinations, and Matt Higgins, CTO of Smart Destinations, will share views on the way changes in enabling technology combined with better organizational collaboration can make your ecommerce business faster, better, and cheaper.

Webinar Takeaways:

· How web services, WYSIWUG, and GUI’s offer the allure of cutting IT out of the picture entirely
· Why marketers have to understand the importance of articulating solid requirements—and why change orders are beautiful things
· Why technologists cannot be passive order takers despite the safety such a pose offers—and how they can help marketers focus on what matters
· These lessons are applicable to SMB or enterprises with internal or external resources

Sign up today!

Can you give Get Elastic readers some background on ecommerce and online marketing for pharmaceutical companies?

In many people’s view, pharma e-marketing and ecommerce are closely linked with a famous “blue pill.” I haven’t found anyone with an email address who hasn’t received spam urging them to buy it in cheap, discrete and generic form.

This has nothing to do with pharma marketing at all. The type of customer acquisition is closer to the one used by the sex industry, which indicates very low “conversion rate” and requires high volume advertising. I am not even going to discuss it here and let us agree that it is absolutely irrelevant to our main topic.

The pharmaceutical industry is amongst the most strictly controlled and regulated industries in the world. For each e-marketing specialist it requires dozens of specialist lawyers and regulatory professionals to check every word or statement made online or offline.

Therefore we would subdivide the e-marketing strategies into following categories:

1. Non-prescription drugs (so called “supermarket pharmacy”) sold online to a consumer. It is a very limited field and includes products like antacids, Aspirin, plasters, etc. Selling this online is pretty hard work, as if someone has a headache he / she will not wait even a day for the delivery but rather pop-in to the local grocery store or pharmacy to get it.

2. Prescription drugs. These can not be sold online to the members of public. And all professionals agree with this. First of all, prescription drugs are called prescription because a medical professional should asses the condition in full, making the decision for the patient.

There is a market that takes advantage of different sets of prescription or non-prescription drug regulations worldwide and different prescribing conditions (think your cheap Canadian pharmacy site). However, this is not considered real pharma e-marketing as it has very limited set on offer — mostly ED drugs, antidepressants, painkillers and sometimes antibiotics.

3. B2B wholesale. Now here when the real ecommerce starts. Not many pharma companies are getting involved in B2B ecommerce, even at this stage, and prefer to work through distributors. Marketing materials are usually provided by the manufacturer with distributors pushing them forward.

4. Governmental level pharma e.g. vaccines, diabetes drugs (insulin), anti-hypertension, etc. Not much e-marketing here, most contracts are long time and established.

5. API market. API (active pharmaceutical ingredients) is actually a base for a drug which is then being post-processed and made into a final product. (Like in an omeprazole tablet weighing 1 gram, only 20 mg is omeprazole API itself. The rest is a “ballast.”) This is the most thriving and dynamic section of pharma Market where the e-marketing development is an absolute must. Strictly B2B.

6. R&D market. Almost the same as the API market, but less volumes involved and deals mostly with new developments.

Can/will pharma sites sell direct to consumer? What kind of “channel conflict” exists?

Non-prescription drugs, yes, no problem. But, as I said, if someone has a headache it’s much easier to find a 24/7 shop and not wait for a delivery.

Prescription drugs – NO. There is a possible exception but it’s not easy to implement. General Practitioners / Family Doctors could be given a “secure key” (like file stored on their computer or other sort of authentication) so they could “authorize” a purchase by a patient. But it still involves extra waiting time, which, sometimes is too precious.

There is no “channel conflict” for legal sites as they mostly get stock using the same distributors. For the “gray area” sites it could be a patent / distributor / exclusivity conflict.

What are the major barriers for pharma in entering ecommerce [both B2B and B2C]? (legal, shipping, security, sales force restrictions etc).

For B2C – legal, non-efficiency (e.g. waiting time).
For B2B – lack of specialists, lack of understanding of e-marketing benefits, general e-marketing strategies not working in pharma, etc.

How do pharmaceutical companies take orders from mom and pop drugstores all the way to the Walmarts and Walgreens’ of the world?

Big stores and chains are not very active in this area and prefer to work through the existing channels on all products. Smaller stores in order to compete are turning to the ‘Net. Some might use classic ecommerce system cart-order-payment-delivery, others looking for supplier and then making direct contact.

Is there a trend for pharma to push B2B orders online? What drives this trend?

There is no other choice. New “generic” manufacturers are the main force behind this trend. Generic companies are actually the most interested parties in the whole pharma e-marketing and ecommerce situation. Without great visibility provided by the Internet they don’t have a chance to push products forward. Lack of pharma e-marketing and ecommerce professionals is probably one of the most serious obstacles in this situation.

What particular ecommerce platform features are necessary for B2B sales? (Price lists, multiple ship-to addresses, etc)

For B2B it should be payment flexibility. B2B is not based on credit card payment and invoicing is preferred. Therefore a dedicated account manager is often the only option. Orders can be placed online (even paid for, if preferred). But the closest thing in this situation is the B2B computer market, where there is always an option to get a contract, shipping schedule, after sale support, etc.

For the API market, it doesn’t work. API is closer to the chemical market where pricing is not usually fixed and the entire system works through the usual enquiry-order-invoice scenario. This requires much effort from sales and technical people to finalize the deal.

What are the best tools for account management?

The best I have ever seen was in-house coded by the IT team. But usually most large pharma companies I worked with use SAP.

What are the differences in online marketing/web design/conversion optimization between pharma and retail/other ecommerce industries?

Still for B2C pharma there is no much difference. It is same type of consumer market with same shopping cart, etc.

B2B – very different. The main difference is how the information is presented and what customer is looking for. In the wholesale situation it is rather straightforward but comes API and things are very much different (words like MSDS, COA, Specs come to mind).

What are the biggest mistakes you have seen, or any other advice would you have for pharma sites who do ecommerce?

The biggest mistake was and is – using “generic” web marketers to handle such a highly specialised area as pharma e-marketing and ecommerce. I have written number of articles on this issue, some of them presented on my website http://www.expertconsultant.co.uk. The closest analogy is: like with doctors – there is no universal professional. If one has a heart problem then his choice should be a cardiologist, not a pulmonologist. E-marketing and eCommerce campaigns in pharma should be driven by a professional that understand both the Marketing and pharma parts, not a general eCommerce only.

Big thanks to Mkrtich for sharing his wisdom. Please check out his website http://www.expertconsultant.co.uk for more information on this topic. You may also be interested in Rohit Bhargava’s series on social media for the pharmaceutical industry at the Ogilvy PR blog.

Don’t forget, we’ve got a B2B webinar with Brian Walker from Forrester Research next week Key Trends in B2B Ecommerce – all attendees will receive a complimentary copy of Brian’s latest report “Market Overview: B2B eCommerce Platforms, A Guide To Selecting Your B2B eCommerce Solution” – a $1749 value.

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Starting with an overview, Karpinski sets the landscape by saying,

For starters, Web 2.0 is clearly about a more interactive Web that looks and feels more like an application than a static Web page or Web site. At the heart of this is the concept of AJAX, or Asynchronous JavaScript and XML-a combination of long-standing Web technologies that, when joined, yields something different than a series of point-and-click Web pages. The classic example is Google Maps, where users can manipulate graphical maps in real time, zooming in and out and pinging the app for landmarks, directions and more.

The article talks to a number industry of sources including Jason Billingsley here at Elastic Path who says:

“The technology is not new, it’s just been recently re-named,” said Jason Billingsley, VP-marketing at e-commerce vendor Elastic Path. “Once people acquire the skills to do it, they can roll out applications that are much richer experiences for users.”

In discussing the Elastic Path One Page checkout tool, Karpinski writes,

In November, Elastic Path introduced a new component of its e-commerce application that uses AJAX to let users go through an entire shopping cart check-out experience on a single interactive screen. The application does real-time ZIP code look-ups, allows users to edit their shopping carts, validates form errors and tallies final prices, shipping costs and taxes-all without a trip back to the server.

To which Jason adds,

“It really eliminates the wait-and-see process at check-out,” Billingsley said. “It has the potential to reduce shopping cart abandonment rather significantly.”

The article continues with discussion about user experience, community building and user involvement, remix culture, vulnerabilities and risks. He wraps up with an example of “web 2.0″ tools in a business to business context citing an example of a major car manufacturer introducing a blog component to interact with dealers.