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.