Trends and Technology
How Millennials are Driving the B2B E-Commerce Landscape
June 2, 2021 |
The C2FO Team
The business-to-business (B2B) e-commerce industry is in the midst of a paradigm shift.
Millennials and their personal shopping habits are powering the digital transformation in B2B e-commerce.
Because this new generation of decision-makers expects the same flexibility, speed and customer service they get from business-to-consumer (B2C) companies like Etsy and Amazon, B2B businesses will need to partner with and leverage the expertise of third-party logistics companies to meet the new demands of e-commerce.
The challenges of 2020 exposed the need for more flexible supply chains and accelerated the digitization of the entire sector, from customer interactions to fulfillment and delivery.
In a recent white paper, international courier DHL Express reported that its business-to-consumer (B2C) e-commerce volumes rose 40% year-over-year in 2020.
These trends seen in the B2C marketplace are impacting the B2B segment as well. By 2025, 80% of all B2B interactions between suppliers and buyers would occur in digital channels, DHL reports.
Digitalization and changing demographics
In addition to the COVID-19 pandemic’s impact on the pace of digitalization, the evolving demographics and purchasing behavior of the buyer — tech-savvy millennials in the workforce — are the main drivers of B2B e-commerce growth.
In 2019, global sales on B2B e-commerce sites and marketplaces jumped 18.2% to reach $12.2 trillion, outpacing the B2C sector and is projected to reach $20.9 trillion by 2027, according to Statista.
Millennial B2B decision-makers seek the same speed, convenience, customer experience and flexible delivery options aligned with their B2C experiences. Deloitte estimates Millenials and Gen Z could make up nearly two-thirds of the global workforce by 2025.
Research by global consulting firm Gartner found that nearly half of all millennials prefer no sales rep interaction at all in a B2B purchase setting.
DHL predicts a new generation of technology-oriented decision-makers who expect the same non-fussy experience they enjoy in the B2C sector will translate into a push for B2B companies to provide more millennial-friendly and digital solutions.
The future of B2B
The predicted growth for the B2B sector is evident in the exponential growth that B2C e-commerce experienced in 2020.
Accounts payable trends on the C2FO platform also reflect this dynamic, with last-mile delivery service providers experiencing an impressive 40% growth in 2020 due to the e-commerce boom brought on by the pandemic.
Payables for e-commerce on C2FO’s platform rose 69% in 2020 from 2019, and C2FO data shows businesses of all sizes are opening e-commerce storefronts to meet this demand.
Logistics’ critical role in meeting demand
Logistics plays a vital role in B2B e-commerce.
B2B e-commerce businesses emulate online retail platforms by providing multiple transport and delivery options to meet different costs, transit times and service requirements.
Ground transportation is more important than ever before for e-commerce. To achieve same-day or next-day delivery turnarounds, shippers partner with last-mile and third-party logistics companies that integrate technology into their management systems for real-time, reliable transportation.
Carriers have responded to environmental concerns by adding hybrid and electric vehicles to their fleets and using cargo bikes in urban areas.
At the same time, new businesses have emerged to work alongside established logistic companies. Some of the latest orders for e-delivery vehicles include a recent request by UPS for 10,000 electric trucks from UK-based start-up Arrival and a mega-order by Amazon last year for 100,000 electric vans from Rivian, according to GlobalFleet.
According to TechCrunch, even GM has invested $27 billion in electric vehicles and launched spinoff company BrightDrop that provides commercial electric vehicles and technology for first- and last-mile delivery.
Logistics companies have also added robots and drones to their arsenal to accommodate increased demand. Dublin-based Research and Markets project the market for drones in logistics to grow at a rate of 22% CAGR by 2026.
Ultimately, B2B companies should invest in technology, such as artificial intelligence and machine learning, to streamline the process and accuracy of demand forecasting, and improve customer experience and delivery management.
Digitalization of both B2C and B2B e-commerce will continue to grow as millennials demand convenience and automation.
Transport networks need to be agile to accommodate these new logistics demands and offer multiple logistics and shipping options that integrate AI and data analytics.
As demand for digital solutions grows, B2B businesses should invest in the right technology and data applications now to ensure the health of the industry in the future.