In our hyper-connected modern world, e-commerce has revolutionized the way we shop. By 2020, global e-commerce retail sales are expected to reach more than $4 trillion, which amounts to around 14.6 percent of total retail spending, and opportunities continue to increase. Direct-to-consumer (DTC) e-commerce and B2B e-commerce are growing at a rapid rate, while B2C e-commerce solutions are becoming ever more innovative.
In recent years, there has been an explosion of direct-to-consumer brands. Adopted by forward-thinking companies like Nike and Tesla, direct-to-consumer refers to an e-commerce model that allows brand manufacturers to reach consumers directly versus selling through traditional brick-and-mortar stores. From the evolution of traditional stores to the influence of mobile technology and changing consumer attitudes, there are numerous reasons for the increasingly widespread adoption of DTC. As Jeff Cashman, CEO of Ally Commerce, puts it: “The historical ways of shopping—brick and mortar—have fundamentally changed. We used to go to a store to transact, but now we can also transact online or through mobile technology.”
For manufacturers, the benefits of e-commerce are extensive. DTC enables businesses to build deeper relationships with their customers by controlling their end-to-end retail experience. There’s also the financial aspect. With the brand realizing the full retail price for a product rather than the wholesale price, DTC enables businesses to reach more customers and increase margins. According to Cashman, “A brand engaging directly with a consumer, as opposed to going through a large retailer, is going to create higher margins for that brand. That’s a good thing for the brand, but it’s also creating a personal relationship with the consumer.”
Many businesses simply aren’t set up to handle the operational and processing side of the demand chain, which can discourage them from going the DTC route. If a business isn’t built to take an order, process a credit card, handle returns, or handle taxation, there’s going to be inevitable growing pains. But that’s where Ally Commerce comes in. “Ally Commerce is a turnkey solution for the technology you need to process an order, as well as the operational services around that,” explains Cashman. “We can be up, processing and shipping orders in 60 days, driving sales and higher margins.”
Research from Accenture and Forrester indicates that 38 percent of B2B buyers exclusively use online channels, while another 32 percent use a combination of online and offline channels. As such, there are growing opportunities in B2B e-commerce, a sector which is expected to reach $1.8 trillion in the U.S. by 2023. While most B2B purchasing still takes place offline, awareness building is primarily an online venture. As Chris Grubb, director of B2B e-commerce strategy at Ware2Go, says, “Many B2B companies have limited their online presence to purely informational websites, failing to take the important step of enabling their products to be purchased online. This is something they have to change.” With increasing numbers of B2B merchants adopting e-commerce models, other businesses can’t afford not to.
When creating a B2B e-commerce platform, there are a couple of things to consider. First, a mobile-ready site is becoming a must-have element. In fact, the UPS Industrial Buying Dynamics Study indicates that around 30 percent of buyers are already using mobile channels, while 24 percent intend to do so in the future. Businesses should also pay attention to the personalization of their e-commerce experience for the customer. “As a B2B buyer, I would expect contract pricing that’s specific to me as a client and products that are personalized to meet the unique specifications of my business,” says Grubb.
So, how can B2B sellers get up to speed with an e-commerce model? Before adopting any new technology, it’s important to research how customers interact with your brand. Explains Grubb, “There’s no ‘cookie cutter’ approach in terms of how customers want to interact with your company. The key is to understand what’s driving buyer behavior.” Ware2Go is a solution that businesses can turn to when they need to adapt to their buyers’ demands. By matching excess warehouse space and fulfillment services with businesses that need to ship e-commerce orders quickly and efficiently, Ware2Go can help make sellers more flexible and competitive, while also helping them preserve capital and increase the quality of their supply chains.
“Ware2Go has a large coverage. One contract with us can get you access to locations for delivery around the country. We help businesses understand buyer behavior and the benefits of being closer to end users, from a cost and speed perspective—all without requiring a lot of time, expertise and resources,” says Scott Roby, general manager at Ware2Go. With nationwide coverage that includes order to delivery in two days or less, Ware2Go provides small and mid-sized companies the fulfillment capabilities that previously only large companies could offer.
In addition to DTC and B2B e-commerce, B2C e-commerce remains a booming sector. But despite its established position, many companies make basic mistakes when implementing B2C e-commerce solutions. The failure to pursue an omnichannel e-commerce model can be critical. “In this new digitized economy, you have to be on multiple channels,” says Jon Bell, manager for global e-commerce strategy at UPS. Most merchants are already on three channels, while some use six channels or more. “Even if you’re a brand builder, we don’t think that being on one channel is enough,” adds Bell.
Speed to the consumer is crucial to the customer experience. Explains Bell, “You need to meet that new two-day delivery expectation, which means that you need to have a bi-coastal supply chain.” In addition, merchants need the ability to manage listings on different channels, as well as the technical knowledge to understand the difference between each channel. It’s also important to provide customers with a consistent experience across all channels. “It has to be intuitive, it has to be easy, and it has to be a good experience as it relates to finding what you need and going through the checkout experience,” says Dave Hudson, director for global e-commerce strategy at UPS.
There are numerous ways that B2C companies can effectively implement e-commerce solutions. For example, UPS’s frictionless fulfillment services allow small and mid-sized businesses (SMB) to take care of transportation and fulfillment in one simplified format. “Simplicity and speed continue to be the currency of the SMB market, and our eFulfillment solution addresses both,” says Bell. In addition, UPS has a platform that allows SMB merchants to sell on over 15 different channels, providing a greater reach to their B2C e-commerce.
To help with timely fulfillment and delivery once the orders come in, Bell explains, “We’ve got warehouses that allow the merchant to be bi-coastal, as well as global.” This international network of warehouses and distribution centers can help businesses build out their supply chain with minimal delays. Finally, UPS marketplace shipping can be a crucial piece of the puzzle, allowing merchants to integrate easily with online marketplaces and e-commerce platforms and streamline their shipping processes.
As e-commerce continues to revolutionize the expectations of consumers in the B2B and B2C sectors, it becomes increasingly important for businesses to adapt quickly to meet the needs of their buyers. Find out more about the e-commerce solutions provided by UPS and our associated technology companies, Ally Commerce and Ware2Go.
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