A Thought Leadership Spotlight Commissioned By Accenture and hybris, an SAP company March 2015 B2B Omni-Channel Commerce Platform Transformation: A Spotlight On Europe RESULTS FOCUSING ON EUROPE FROM THE THOUGHT LEADERSHIP PAPER BUILDING THE B2B OMNI-CHANNEL COMMERCE PLATFORM OF THE FUTURE, NOVEMBER 2014 Introduction In November 2014, Forrester Consulting completed a study commissioned by Accenture and hybris software, an SAP company, to explore how businessto-business (B2B) buyer expectations are transforming how suppliers sell and deliver products and services. The study, Building The B2B Omni-Channel Commerce Platform Of The Future, outlined how B2B buyers online expectations are being driven by their personal consumer online shopping habits and how B2B sellers must adapt their technology, organization, and process to keep pace with that change. To further explore the geographical variations, this spotlight focuses on the trends among online B2B buyers and sellers specifically in Europe. When we narrow the focus on B2B commerce trends in Europe, our key findings are that European B2B buyers: Demand sophisticated omni-channel capabilities from their suppliers. Are increasingly likely to make work-related purchases on their own and online. Expect enhanced search functionality, ratings and reviews, personalized experiences, and integration with back-office systems from suppliers.
2 European B2B Buyers Expect Omni- Channel Features From Suppliers Today s B2B buyers expect to access any information or services from any device, in their immediate context, at their moment of need. So it comes as no surprise that our custom study revealed that just under half of all European buyers leverage a smartphone or tablet to research products and services to make work-related purchases, with slightly more German (51%) buyers likely to use smartphone and tablets. The study also revealed that most European buyers expect: An increase in work-related purchases made online. More than half of respondents saw an increase in the total percentage of work purchases online, particularly in the, where 61% saw an increase (see Figure 1). A further 39% of all European buyers surveyed saw an increase in their average online purchase size. Business deals that are pre-negotiated. More than a quarter of European respondents (26%) indicated that they have seen an increase in sales with pre-negotiated pricing compared with the previous year. Enhanced, omni-channel features and functions from suppliers. Similar to all other countries surveyed, 61% of European B2B buyers expect suppliers to offer enhanced search functionality on their website particularly in the, where 68% mentioned this as a key feature (see Figure 2). A further 59% expect suppliers to show ratings and reviews of products/services. In addition, 45% of European buyers, slightly more than any other region, expect deep integration with back-end ERP systems. FIGURE 2 European Buyers Expect Omni-Channel Capabilities Of the following, which three features/functions would you most like your suppliers to offer? Enhanced search functionality on their website Showing ratings and reviews of products/ services 60% 61% 56% 59%68% 58% 59% 54% 61% FIGURE 1 Over Half Of European Buyers Expect Work Purchases Made Online To Increase Improved personalized product or service recommendations on their website 50% 51% 57% 50% Please tell us how your buying behavior with work-related purchases has changed in 2014 versus 2013. (Increasing only) %oftotalwork purchases made online 61% 53% 51% 61% Integration with our backend finance, accounting, order management systems, or ERP systems Merchandising/ recommending relevant products and services 45% 44% 45% 38% 37% 45% 30% 37% Average purchase size online %ofsaleswith pre-negotiated client pricing 29% 26% 27% 23% 29% 39% 37% 39% Base: 930 B2B buyers at organizations in Canada, the US, the,, and *Base: 454 B2B buyers at organizations in the EU Access to their website through a mobile optimized website 15% 15% 16% 17% 13% Base: 930 B2B buyers at organizations in Canada, the US, the,, and *Base: 454 B2B buyers at organizations in the EU
3 European Buyers Are Taking Control Of The Purchases They Make European B2B buyers are taking control of the purchases they make for work-related tasks (see Figure 3). Twentyeight percent of European respondents agreed that they are going to make work-related purchases on their own. French B2B buyers stood out in particular, where a third of French B2B buyers agreed that they are going to buy work-related products or services independently regardless of the corporate functions policies and procedures. Further, 33% of French respondents also agreed that they are expecting to make more work-related purchases on their own within the next 12 months. FIGURE 3 European Buyers Are Expected To Make More Work-Related Purchases On Their Own How strongly do you agree or disagree with these statements? (Strongly agree and agree only) Iamgoingtobuyworkrelated products or services independently regardless of the corporate functions policies and procedures Iamexpectingtomake more work-related purchases on my own (without procurement) in the next 12 months It has become easier to make work-related purchases on my own in the past 12 months 21% 15% 15% 14% 11% 20% 28% 28% 33% 28% 29% 27% 33% 26% 23% B2B Sellers Look To Adapt To Customer Demand Through Omni- Channel Investments In order to explore how B2B organizations are adapting to increasing customer demand, Forrester surveyed 526 B2B organizations around the world that sell direct to businesses online and looked at how these businesses are adapting to the increasing demand of their customers. The survey revealed that 300 European B2B sellers across the,, and are leveraging omni-channel because (see Figure 4): Customers are expecting it. Sixty-five percent of B2B sellers in Europe are investing in omni-channel initiatives because their customers are expecting it. Further, 58% of European B2B sellers are also expecting to see a rise in customer satisfaction metrics, which indicates that firms are seeking to change how they interact with customers to please them. German and French sellers in particular are expecting to see an uplift in customer satisfaction metrics () compared with all countries surveyed. They want to leverage efficiencies and cost savings. Fifty-four percent of European B2B sellers are investing in omni-channel initiatives to drive efficiencies and cost savings through improved inventory planning and assortment, with B2B sellers in (60%) and (58%) leading the way. Base: 930 B2B buyers at organizations in Canada, the US, the,, and *Base: 454 B2B buyers at organizations in the EU
4 FIGURE 4 European B2B Sellers Are Investing In Omni- Channel Because Their Customers Are Expecting Them To What would you say are the primary drivers behind your organization s investment in omni-channel initiatives? Our customers are expecting it We expect to see an uplift in our customer satisfaction metrics To drive additional efficiencies and cost savings through improved inventory planning and assortment The omni-channel customer has a higher lifetime value To reduce customer service/call center expenses For international growth/globalization 66% 65% 63% 70% 59% 58% 50% 54% 54% 60% 58% 45% 51% 49% 43% 50% 53% 38% 36% 43% 30% 35% 33% 31% 31% 30% 33% European B2B Seller Technology Priorities Focus On Addressing Buyer Needs B2B sellers recognize the importance of omni-channel commerce to serve and retain customers. In fact, leading B2B sellers are recognizing that technology will drive the future of their businesses. Similar to other regions, 57% of European B2B sellers are currently implementing or upgrading their ecommerce platform (see Figure 5). respondents () seem to be especially motivated to implement or upgrade their ecommerce platform to support omni-channel rollout. In addition, of respondents in Europe are improving their order management system, with French sellers (53%) even more likely to invest than any other country surveyed. Also, almost half () of European B2B companies are investing in data and analytics to support their omni-channel program rollout. FIGURE 5 Investment In ecommerce Platforms High On The Agenda For European B2B Sellers In the future, which of the following technology platforms does your firm plan to invest in to support your omni-channel program rollout? (Currently under implementation/upgrading) ecommerce platform 58% 57% 55% 54% Base: 526 B2B sellers at organizations in Canada, the US, the,, and *Base: 300 B2B sellers in the EU Order management system Data and analytics 49% 53% 43% Base: 526 B2B sellers at organizations in Canada, the US, the,, and *Base: 300 B2B sellers in the EU
5 As well as looking at the catalysts for omni-channel initiatives, the study also explored which technology initiatives are key priorities over the next 18 months. Addressing the expectations of B2B buyers shown earlier, almost half () of European B2B sellers are looking to improve their search functionality on their website (see Figure 6). European B2B sellers will also be focusing on improving accessibility and functionality of their websites and apps through mobile devices. Some interesting country-specific technology initiatives also emerge when we delve into variations between French, German, and sellers. For instance, 43% of French B2B sellers are prioritizing technology investments focused on improving mobile app access to their website. The same sellers in were the least likely to leverage technology to improve personalized recommendations on their website, with only 26% of respondents in focused on this versus 40% of B2B sellers. German sellers are taking the lead among European sellers by prioritizing technology investment to help them mechanize relevant products and services. A third of B2B sellers are looking to prioritize technology initiatives that improve integration with customers, back-end finance, order management, or ERP systems. FIGURE 6 Customer-Focused Technology Initiatives Will Be Deployed Over The Next 18 Months Based on your customers online needs, which of the following technology initiatives are a top priority over the next 18 months? Enhanced search functionality on our website Access to our website through amobileapp Merchandising relevant products and services Improved personalized product or service recommendations on our website Integration with customers back-end finance, accounting, order management systems, or ERP systems 39% 40%43% 34% 37% 35% 35% 39% 31% 34% 26% 36%40% 32% 30% 27% 30%33% Base: 526 B2B sellers at organizations in Canada, the US, the,, and *Base: 300 B2B sellers in the EU
6 B2B Sellers Must Overcome Barriers To Gain Full Value From Omni- Channel Initiatives When asked about top barriers and challenges preventing them from fully implementing their omni-channel strategy, B2B sellers in Europe revealed that: Back-office integration hinders omni-channel adoption. Similar to their North American counterparts, of European sellers are challenged by difficulty in integrating back-office technology across channels to fully implement their omni-channel strategy. In addition, of European B2B sellers are challenged by sharing customer data and analytics between channels, countries, or locations. This is even more pronounced in the, where of B2B sellers highlighted this as a challenge. The distribution partner ecosystem acts as a barrier. Forty-two percent of European B2B sellers also highlighted that they are challenged to fully implement their omni-channel strategy because of limitations by distribution partners, franchises, or wholesale customers. FIGURE 7 European B2B Sellers Are Challenged By Back- Office Technology Integration In your opinion, what are the top barriers/challenges preventing your organization from fully implementing your omni-channel strategy? Difficulty integrating backoffice technology across channels Difficulty sharing customer data and analytics between channels, countries, or locations Limited by distribution partners, franchises, or wholesale customers Base: 526 B2B sellers at organizations in Canada, the US, the,, and *Base: 300 B2B sellers in the EU 45% 43% 43% 41% 40% 40% 45% 36% 44%
7 Key Recommendations To remain competitive, B2B companies in Europe must: Invest in technology innovation. Fifty-seven percent of European B2B sellers plan to invest in automated pricing optimization. A further 51% of European sellers are also planning to invest in personalized recommendations, and are using wearable computing in distribution centers. B2B companies hoping to compete must harness new and compelling technologies that help them understand their customers more deeply and broadly. Build technology infrastructure to deliver world-class omni-channel experiences. In order for B2B companies to become successful omni-channel organizations, they must build their technology infrastructure to support enhanced search functionality, ratings/reviews, and personalization, as well integration with back-office systems across different channels. Make data sharing a top priority. European B2B companies highlighted the difficulty in sharing customer data across channels and locations as a key challenge they face in effectively deploying their omni-channel strategy. European B2B companies must break down organizational and process barriers that prevent the effective flow of data within the company and between partners.
8 Appendix A: Methodology In this study, Forrester surveyed 526 B2B companies and 930 B2B buyers across Canada,,, the US, and the. B2B buyers were from organizations with more than 1,000 employees and were manager-level and above business and procurement professionals who had recently bought products or services online. All B2B companies are currently selling direct to business partners online (B2B) and have at least 500 employees. All B2B company respondents were personally responsible for or deeply involved with selling the company s products or services online. The study was completed in November 2014.