Omni- Channel Benefits for B2B Commerce

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1 i Mtkang/Shutterstock B2B ecommerce trends and tides are signaling a shift towards a B2C- like Omni- Channel eco- system.

2 arvato Systems North America 6 East 32nd Street, New York, New York United States All Rights Reserved Copyright 2014 This document is arvato Systems sole and exclusive property. You are not permitted to duplicate, hand out, or distribute without prior written approval. Version 1.1 November 1,

3 Has the term Omni- Channel and its associated derivatives become unclear? Think the correlating buzz and hype is B2C retail specific? Not sure what it has to do with your B2B Commerce strategy and business model? Then consider that the back- end critical business functions required for B2C Omni- Channel dominance are equally relevant to your B2B business. In this brief paper, we shall examine the changing trends and tides in B2B ecommerce that are signaling a shift towards a B2C- like Omni- Channel eco- system. Next, you will learn how your critical investment decisions over the next months are going to determine your near- to long- term market positioning and overall success. B2B commerce trends The Omni- Channel commerce concept has revolutionized B2C retailers business models. With shoppers endlessly empowered by new devices and applications, communicating with your market and transacting with customers has forever changed, a trend showing no signs of slowing. While your B2B customers may not need to interact with your business using the latest mobile device or social media application, they are still consumers and are demanding a shopping experience rivaling their personal lives as consumers. Adapting the B2C Omni- Channel model The driving forces behind B2B s shift towards Omni- Channel strategies Matching the competition - Innovative competitors such as AmazonSupply and TigerDirect have replicated the B2C retail Omni- Channel model in their estores. When market trendsetters, leaders, and innovators shift their business model or adopt new practices, everyone takes notice. This turning point mandates that others follow their lead or become dinosaurs. Higher demand for mobile experiences Businesses have realized they are leaving significant revenue dollars and new customer acquisitions on the table by not providing a robust mobile shopping experience. Forrester s 2014 benchmarking B2B ecommerce Technology Investment and Initiatives report, based on a survey of B2B ecommerce professionals, indicated just 38% of respondents were capable of transacting with customers on a tablet. In fact, only 35% had the means to sell using a smartphone. Consequently, 58% cited mobile sites and apps as a 2014 technology investment priority - third only to ecommerce platforms and back- end integration projects*. Version 1.1 November 1,

4 Rising ecommerce budgets and investments Forrester research indicates that B2B ecommerce professionals planned to invest almost 7% of their Online revenues on technology, a significant leap higher from typical allocation of just 4% in recent years*. Furthermore, 70% of B2B professionals anticipate increased budget and spending in the coming years. Increasing customer focus With the B2B eco- system undergoing an Omni- Channel transformation there will be a significant business and cultural shift, viewing technology from the customer s point of view, rather than channels or internal company silos. This creates an ongoing demand for scalable, extensible platforms capable of keeping pace with dynamic shifts in customer behavior. Demand for New B2B ecommerce Platforms and Upgrades B2B companies are realizing the need to rethink and revitalize their ecommerce business model and platform and are taking action. According to Forrester s study, 50% of B2B ecommerce professionals were planning to upgrade their ecommerce platform within 18 months. Taking it one step further, 15% already had a project in motion resulting in 65% either currently upgrading or planning to do so*. Shockingly, the same question was posed to B2C ecommerce professionals in a May 2013 Forrester research initiative, and only 12% were planning to change their ecommerce solution within the same 18 month timeframe. This lends support to our belief that B2B companies are aggressively poised to close the gap between B2C and B2B ecommerce capabilities and end user shopping experience. B2B Omni- Channel Transformation Highlights It s been established that B2B companies have lagged behind their B2C counterparts in adopting Omni- Channel strategies, and are finding themselves at an inflection point in their ecommerce evolution. But while this paradigm shift may resemble B2C innovations, such as increasing customer touch points, becoming customer- focused, and ramping up for a race to re- platform it is unlikely the B2B Omni- Channel development model will be a mirror image of retail companies approach. To that end, what will B2B companies focus on as they invest in ecommerce? How will they prioritize ecommerce investment and functionality to immediately impact revenue? To answer these questions, it is beneficial to examine what B2B company needs are fueling the sudden wave of upgrades and investment. Version 1.1 November 1,

5 Risk management As homegrown B2B platforms fall farther and farther behind new technologies, they become increasingly difficult to maintain, upgrade, and integrate with new systems and applications. This equates to mounting systemic risks to operations, security and brand identity. While the ultimate goal is mitigating these risks, in the process B2B companies have implemented solutions adhering to new performance standards, increasing flexibility, and wholly improving the customer experience. In some ways, a new ecommerce solution is mandatory rather than optional and this phenomenon is partially responsible for the sudden spike in re- platforming and upgrade demand. Back- end integration needs It is not surprising order management, ERP, financial reporting, and other back- end functions are second only to broad ecommerce platform needs in terms of B2B companies top 2014 investment priorities. In an era of big data and analytics driving critical decisions, B2B players are being crippled by autonomous and disconnected central databases. Upgrading to an end- to- end ecommerce solution allows B2B enterprises to tap into a vast wealth of knowledge across customers, products, and processes. When this big data potential is unlocked, it serves as the basis for research and analytics that strengthens companies ability to serve existing customers, branch out into new markets, and acquire new business. This is another example of B2B companies gravitating towards the B2C Omni- Channel mentality. Cost reduction and efficiencies Customer s preference for Omni- Channel commerce and mobile touch points are mutually beneficial. These new ecommerce processes benefit companies by facilitating a self- service environment, creating opportunities to automate transactions, increasing branding opportunities, encouraging loyalty, stimulating the research and selection process, reducing time to market, expediting payment, and enhancing customer service and communications. Interestingly enough, B2B companies seeking the most cost efficient future business model are turning to mobile and multiple customer touch points, and inadvertently building an Omni- Channel experience without it being their primary goal. Product content management Version 1.1 November 1, B2B 2014 Technology Investment PrioriMes* ecommerce plaiorm Back- end integrahon Mobile sites and apps Web content management Mulhchannel integrahon Site governance 12% 34% 44% 52% 64% 59% 58%

6 End- to- end transaction Support B2B sales cycles and processes range from quick orders or simple replenishment needs to more complex and lengthy scenarios. In any case, B2B ecommerce systems must go beyond the transaction or sale and equally support payment, fulfillment, and logistics. Fully integrated B2B ecommerce systems must functionally interact with purchasing systems, finance systems, CRM applications, ERPs, and warehouse functions. Afterwards, data must be available on- demand to support reporting, analytics, and forecasting all of which drive future sales strategies. Dynamic web content and product management Referring back to current investment priorities, web content and product content management tools are key B2B focus areas. These investments reduce the costs associated with content distribution, while making the production process increasingly efficient. Today s dynamic ecommerce environment requires:! Accurate and up- to- date product information available across all channels! Access to content creation, collaboration and approval processes for multiple contributors! Consolidation of structured and unstructured content on a single scalable platform! Support for targeted content available varying by customer, market, vendor, etc.! Access to sales materials and content for sales and other company representatives Visual merchandising and rich media content Using big data and high quality pictures and videos, B2B companies are seeking better conversion rates and ROI on marketing initiatives. This reflects another parallel between B2C Omni- Channel practices and the emerging B2B ecommerce model. The Omni- Channel correlation is clear in an effort to drive revenues through online and mobile channels, B2B companies are actually providing the personalized shopping experience that B2C retailers consider mandatory today. Version 1.1 November 1,

7 Key Takeaways As B2B ecommerce trends have evolved, and firms react to shifting customer preferences, they find themselves embracing B2C Omni- Channel strategies. As this adoption evolves, the stage seems set for a rapid revolution in the standards and best practices B2B companies subscribe to. The blueprint for this change begins with ecommerce replatforming and upgrades as industry research has validated. It is no surprise that a primary focus of investment for B2B ecommerce professionals in 2015 is revitalizing their ecommerce platform, as many cost savings, customer experience enhancements, logistical efficiencies and back- end integration capabilities are mandating a robust end- to- end solution. Bigger picture, the transformation that is taking place will yield tremendous benefits for your B2B organization for years to come in particular: Unlimited growth and expansion potential A single robust integrated ecommerce platform translates into global expansion, and scalability to virtually any number of brands, sites, geographies, etc. For companies with B2B and B2C selling models, a single enterprise- level ecommerce platform can support each instance, while lowering initial investment cost and eliminating the need to maintain separate systems. Efficient business management on a single platform With the proper ecommerce infrastructure in place, core processes and data feed into and out of this super- charged commerce engine. Integration between separate systems is no longer required, and results in unified sales, inventory, order management, finance, merchandising, customer service, and ultimately more informed strategic decisions. Agility and visibility Connecting fragmented data sources creates a fresh new in- depth perspective as B2B companies manage across the board critical functions. With extensibility and flexibility, world- class ecommerce platforms provide the framework for keeping pace with today s innovations as well as any inevitable lurking future surprises. For more information contact arvato systems North America or call arvato Systems North America arvato Systems uses the technology, talent, and expertise of over 2,700 people at more than 25 sites throughout the world to create integrated, future- proof business infrastructures that help make our clients more agile and competitive, and enable them to deliver new standards of service to their customers. We create streamlined digital processes that support innovative business models while providing operation and support services. arvato Systems is a hybris Platinum partner with a solid reputation, over eight years of hybris implementation and product development expertise (B2B module, B2B Accelerator, Telco Accelerator, Digital Module, OMS). * Forrester Research, Benchmarking B2B ecommerce Technology Investments And Initiatives, March 6, 2014 Version 1.1 November 1,

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