Retail Tactics for B2B Ecommerce Success

Retail Tactics for B2B eCommerce Success

By Jay Dunn CMO, Chief Outsiders

1 © Chief Outsiders, LLC 2017 Index

Chapter 1 Why Should B2B Care About Retail?

Chapter 2 B2B Threats & Opportunities

Chapter 3 Retail Best Practices That Work

Chapter 4 What We Have Learned

2 © Chief Outsiders, LLC 2017 Chapter 1 - Why Should B2B Care About Retail? eCommerce: Dog Eat Dog

s a B2B CEO, you might not immediately see how consumer retail can help you A run a business-to-business eCommerce website. However, once you realize how retail brands manage eCommerce, you’ll understand how their best practices can make an remarkable difference in your B2B eCommerce results.

Therefore, there is a lot that B2B companies can learn from consumer retail companies. They can learn from the success that many retailers have had with e-commerce. They can also learn what the shift to online and mobile shopping can mean for their business.

3 © Chief Outsiders, LLC 2017 The Age Of Disruption Most major retailers saw and began responding to the eCommerce disruption in the late 1990’s, early 2000s.

Macy’s spent more than $200M on eCommerce in 2000 and has invested a similar amount ever since. Most larger retailers followed suit with varying investment, but not all.

Online revenue is growing quickly (expected to trend to 30% of retail sales by 2020), and retailers got extremely good at eCommerce and continue to lead the industry in selling products to people online.

However, as consumer behavior changed to eCommerce and mobile, mall traffic has continued to decline and bricks and mortar has gotten much tougher.

How Tough Is It?

- closing 100 to 730 stores.

- closing 108 Kmarts, 42 Sears.

- closing potentially 300 stores.

- closing 70 stores.

- closed 250 stores, out of business.

- closed 171 stores, out of business.

- closing 110 stores, bankruptcy.

- closing 120 stores.

- closed 400 stores.

- closing 120 stores.

4 © Chief Outsiders, LLC 2017 Yet, as bricks and mortar has declined, eCommerce has surged. Retailers have rapidly improved online sales performance and have established tried-and-proven tactics that have helped stem the disruption brought on by the digital consumer.

But that doesn’t mean B2B is smooth sailing. There’s a whole set of challenges and opportunities ahead for B2B too.

5 © Chief Outsiders, LLC 2017 So, You’re Saying To Yourself:

Dang, glad I’m not the CEO of Macy’s, Walmart, or heaven help us, Sears...

What could possibly keep me from being successful at B2B eCommerce?

6 © Chief Outsiders, LLC 2017 Chapter 2 - B2B Threats & Opportunities

Little did we know, by “you’re done,” Bezos meant every other business on the planet, perhaps even yours.

Jeff Bezo’s company is willing to lose money to dominate market share - something nearly all other businesses cannot do. Makes competing difficult.

But, if you have great products, a strong brand, a unique selling proposition such as industry expertise or incredible salespeople, you can compete, even against Amazon.

Because the winds of disruption are in your favor.

7 © Chief Outsiders, LLC 2017 The B2B eCommerce Opportunity Is Bigger Than Amazon U.S. B2B eCommerce sales are heading to $1 trillion.

(B2B e-Commerce sales in billions of U.S. dollars

2014 $692

2015 $780

2016 $855

2017 $928

2018 $999

2019 $1,066

2020 $1,132

The ease of buying online, and the cost-savings for sellers, is driving up activity on B2B e-Commerce sites, where total sales in the United States are expected to hit $780 million in 2015 and $1.132 trillion by 2020. Between 2014 and 2020, B2B sales will increase at a compound average growth rate of 7.7%.

Source: Forrester Research Inc.

8 © Chief Outsiders, LLC 2017 Worldwide, B2B eCommerce Surges To $6.7 Trillion By 2020 As manufacturers and wholesales maximize selling online, worldwide B2B eCommerce sales explode, much of it from marketplace such as Alibaba and Amazon Business, but also from independent sellers with robust websites and experience.

B2B online sales are surging ahead worldwide Growth of e-marketplaces is helping to drive global B2B online sales to $6.7 trillion by 2020.

(B2B e-commerce sales in trillions of dollars, by 2020)

Worldwide $6.7

United States $1.9

China $2.1

0 1 2 3 4 5 6 7 8

Source: Frost & Sullivan

9 © Chief Outsiders, LLC 2017 In fact, according to Forester Consulting, nearly half of B2B customers want a B2C experience.

Plus, shoppers want you to offer key features they prefer from consumer retail websites: real-time inventory status, downloadable product information, and the ability to manage their own accounts.

B2B buyers want B2C features 49% of B2B buyers say they prefer to make online purchases on consumer-type web sites.

Prefer to make work-related online purchases on consumer- $692 type web sites

Say it’s important to have real-time information online of $692 inventory availability

Expect to conduct half of their B2B purchases online within three $692 years

Want the ability to download product information $692

Want the ability to manager their accounts online $692

0 10 20 30 40 50 60 70 80

B2B buyers increasing expect to find business-to-consumer e-commerce site features on their supplier’s web sites. 49%say they prefer to use consumer-type e-commerce for making work-related online purchases. 77% say it’s important to have real-time information on supplier’s e-commerce sites related to inventory availability. And 52% say they expect to conduct half of their purchases online within three years.

Source: Forrester Consulting

10 © Chief Outsiders, LLC 2017 Where B2B buyers like to research products online Suppliers web sites are most popular, cited by 83% of buyers, but Google is close behind at 77%

(Percentage of B2B buyers using online venues to research products)

Supplier web sites 83%

Google 77%

E-marketplace sites 34%

User reviews of products 42%

Blogs 11% $692 Social Media 9%

Other 7%

0 30 40 60 80

When asked to name their sources for researching products before purchasing them, 83% of B2B buyers cited supplier’s web sites. But suppliers have plenty of competition, with 77% of buyers saying they use Google and 34% citing third-party marketplace sites.

Source: Acquity Group, a unit of Accenture Interactive

The tools B2B customers use to research products online is a big advantage for business - customers would rather research and purchase from a manufacturer’s website, so you better be good at both paid search and eCommerce.

11 © Chief Outsiders, LLC 2017 Don’t Be This Guy Walmart CEO Mike Duke said in 2012 that his biggest regret was not investing more in eCommerce to compete with Amazon and other direct competitors.

Walmart has been in catch-up mode ever since. “I wish we had moved faster. We’ve proven ourselves to be successful in many areas, and I simply wonder why we didn’t move more quickly. This is especially true for eCommerce.” Mike Duke, Former CEO of Walmart

If You Don’t Do It, Your Competition Will While Walmart has since invested billions in eCommerce, it holds a tiny share of the market compared with Amazon.

Walmart recently bought online retailers Jet, Shoebuy, Moosejaw, and Modcloth to take back some level of online market share.

12 © Chief Outsiders, LLC 2017 So, You’re Saying To Yourself:

Ok, I’m ready to fight off direct competitors and Amazon...

...what can I learn from retail do that can help me do that?

13 © Chief Outsiders, LLC 2017 Chapter 3 - Retail Best Practices That Work Get Back To Basics With Retail Best Practices That Work

And Here’s The Shocking Part...

14 © Chief Outsiders, LLC 2017 Marketing Is The Last Thing You Want To Do

• This statement may get me thrown out of the marketing club, but it’s true. When retail eCommerce does its job well:

• It plans the business first.

• Isolates where the revenue should come from.

• Builds the expense budget at an acceptable ROI to keep profits healthy.

• And only then creates the marketing strategy to deliver the sales plan.

15 © Chief Outsiders, LLC 2017 Get Back To Basics With Retail Best Practices That Work

Drive Sales and Customer Acquisition

• The relentless focus on conversion of expensive traffic to sales is paramount to retail’s eCommerce success.

Data Capture & Retention

• The necessity of data capture to keep expanding the buyer pipeline of 0-12 month active customers is critical. The retention of customers who haven’t purchased in 13-24 month is a must. If they’ve bolted to a competitor, you have to get some of them back.

Reporting

• Build your sales plan with forecasts of where the revenue is coming from. The marketing plan’s objective is to achieve those sales numbers.

Website User Experience

• eCommerce user experience in an ongoing priority, as if a seamless mobile experience that promotes easy search, nimble payment, and quick checkout. And that experience must be built around a purchase funnel and purchase triggers that create conversion and revenue.

16 © Chief Outsiders, LLC 2017 The Components of Successful Retail eCommerce

• Sales and Expense Planning • Reporting

• LY vs TY projection by channel • Budget/Expense

• Gross sales goal • Gross Sales

• Gross margin goal • GM$/GM%

• Projecting Revenue by Channel • Average Order Value (AOV)

• Expense by Channel • Orders

• ROAS & ROI • Web Performance - Traffic, Conversion Rate (CR%)

• Traffic Strategy • Channel Performance Reporting: • PPC/SEO - Paid search, organic • Social Advertising search, email, social, • Social media affiliates, referral, • Content Marketing other advertising.

• Affiliate Marketing

• PR • Marketing & Conversion Strategy/

• Mobile and responsive design Promo Calendar

• Conversion & Capture techniques

• Post Purchase marketing strategy

Robust business planning is required to allow to get the highest return on marketing dollars, particularly for eCommerce, since we can measure nearly every effort.

So, how do you get started? Let’s go to “The DSP.”

17 © Chief Outsiders, LLC 2017 The DSP - Deceptively Simple Projection Someday, I’ll patent this model, but for now, it’s yours for the taking. The DSP is a surefire model you can use to figure out what your eCommerce website needs to produce to achieve your projected sales plan. Here’s how it works:

THE DECEPTIVELY SIMPLE PROJECTION

• How much Traffic do you need, • At the Conversion Rate you have, • To generate the Orders required, • At your Average Order Value, • Minus Markdowns or Promotions, • To deliver the Gross Sales, GM$, & ROI goal

Let me show you how it works:

18 © Chief Outsiders, LLC 2017 The DSP - Deceptively Simple Projection Let’s say you are a $5 million business, selling exclusively online, and want a 20% increase next year, or $1 million incremental revenue. Your current business website performance:

Monthly Traffic: 200,000

Conversion Rate: 2.5%

Monthly Orders: 5,000

Average Order Value (AOV): $84.00

Monthly Revenue: $420,000

Annual Revenue: $5, 040,000

The math is as follows:

200,000 Traffic divided by 2.5%Conversion = 5,000 Orders.

5,000 Orders multiplied by $84.00 AOV = Monthly Revenue.

Monthly Revenue multiplied by 12 = Annual Revenue.

To get $1M incremental, you need increases in one of these: Monthly Traffic: Increase this by 38,000 Conversion Rate: Increase this to 2.98% AOV: Increase this to $100.00

19 © Chief Outsiders, LLC 2017 The DSP - Deceptively Simple Projection Since we know it’s very difficult to raise product prices in a competitive market environment, let’s assume that’s off the table.

To get $1M incremental, you need increases in one of these: Monthly Traffic: Increase this by 38,000 Conversion Rate: Increase this to 2.98% AOV: Increase this to $100.00 $84.00

So, that leaves either increasing Traffic or increasing Conversion Rate to achieve our $6M annual revenue.

And that’s where Marketing Strategy and Conversion Strategy come into play. The lessons of retail dictate that every dollar spent must achieve a targeted ROI.

And “Marketing to the Sales Plan” is how we get the biggest bang for your buck.

Marketing To The Sales Plan Once you’ve tested and arrived at your options for driving more traffic and conversion, your marketing dollars should be directed there.

So, if Google paid search is working for you, explore putting more budget there at a healthy ROI to drive increases in traffic.

If you’ve tested conversion techniques and found some that work for your business, your ROI on paid search will be higher since you are converting more of the traffic into sales.

The lesson is to “reverse-engineer” your marketing effort for the highest possible return on investment, building the sales projection by channel first, then applying marketing efforts to drive those sales.

Sounds fundamental, but that’s why it’s called “back to basics.” You may be surprised how many businesses spend marketing dollars first and hope for an ROI later, instead of the other way around.

While consumer retail and B2B are vastly different business models, when it comes to eCommerce, the best practices of retail work well for B2B.

Your customers and prospects are people too, and they spend more time on consumer websites than they do B2B websites, so the more commonality they experience on your website, the better opportunity you have to convert that traffic to sales.

So, here’s the game plan to drive your success:

• Build Your Sales Plan by Channel. • Use “The DSP” to Project Areas of Focus. • Build Your Traffic Strategy. • Build Your Conversion Strategy. • Get Reporting & Analytics in Place. • Build Your Marketing Plan and Budget.

Above all, take it seriously. The world’s changed and is not changing back. The future’s online and mobile. Acknowledge that to grow, you have to compete. To compete, you have to be better. So, steal from the best because retail best practices will help you build a better business.

Jay Dunn

Jay is an expert in maximizing the tools of the digital age to drive incremental sales and customer growth for B2B and B2C companies, regardless of size.

Specializing in eCommerce, retail, and digital marketing (paid search, SEO, email marketing, retargeting, affiliates, video, content, social media, and social advertising), Jay’s expertise has resulted in remarkable increases in incremental sales, gross profit, customer growth, and turning B2C websites into sales engines and B2B sites to centers of lead generation.

From start-up to mid-sized to Fortune 500, B2B to retail to eCommerce, Jay has partnered with CEOs and their leadership teams to deliver highly-effective solutions which have driven significant results for some of the world’s best-known companies - The Home Depot, Brookstone, Lane Bryant, Bare Necessities, Char-Broil, PK Safety, and City Chic.

Contact Jay Web: chiefoutsiders.com/contact-jay LinkedIn: linkedin.com/in/jaydunn Email: [email protected]