In a time when e-commerce sales are exploding, consumers are increasingly turning to online marketplaces to make buying easier. But business buyers on the other hand haven’t shown the same interest in B2B marketplaces.
The UPS Pulse of the Online Shopper™ Study showed that 85 percent of its avid online shoppers surveyed had visited an online marketplace in the past year. And consumer preferences for online marketplaces such as Amazon, eBay, Newegg, Etsy and newcomer Jet have made them well-established sources.
Although these marketplaces vary widely in scope, popularity and what they sell, they all work in more or less the same way—curating goods from a variety of sources, and then selling them on a pay-per-transaction or subscription-fee basis, or one that combines both methods.
Why are business shoppers so unmoved by B2B marketplaces? The less-than-seamless nature of many B2B sites may be partly to blame. To improve the attractiveness of B2B sites, a recent Bain & Company brief suggested that “the key opportunity might be to mimic the smooth and efficient business-to-consumer (B2C) customer experience that retailers like Amazon and Zappos have made commonplace.”
One company that operates a B2B site that is succeeding in this space is Global Industrial, which features the same integrated, user-friendly purchasing processes used by B2C sites. Alibaba, China’s behemoth e-commerce company—and, as of April 2016, the world’s largest retailer—is another strong example. The company’s website provides a B2C-like shopping experience for a previously overlooked cohort.
To meet the needs of customers, B2B marketplaces are under pressure to improve efficiency in areas from warehouse management to last-mile delivery. Supply chain visibility—even transparency—is critically important. The good news is that, by applying the data-gathering infrastructure of the Internet of Things (IoT), which can link all phases of a warehouse operation into one long chain, attaining that visibility is more possible than ever. Providing customers with real-time information about inventory and accurate delivery time estimates are critical to establishing credibility.
Web-connect devices and technology such as temperature sensors that enable IoT are proliferating: Gartner predicts that there will be 25 billion of these connected nodes by 2020. About two-thirds of these will contain embedded radio-frequency identification (RFID) sensors that can track the progress of items as they move along global supply chains.
As the price of these sensors falls, production, supply chain, fulfillment and sales will, increasingly, be monitored in real time. The resulting end-to-end transparency may well open up new relationships. Point-of-sale data, for example, might inform production schedules; prices could fluctuate as the cost of raw materials changes.
The explosive growth of e-commerce will increase the pressure on fulfillment networks. Innovative technologies may help address this challenge: in particular, warehouse automation is gaining traction as a productivity solution. Autonomous mobile robotics systems—in other words, robots with the capability to sort, store and move products in warehouses, for instance—are being developed both by startups and established warehouse automation providers.
One key trend in the healthcare industry is the utilization of more forward-stocking facilities that better serve consumers by placing products closer to the demand for them and can help provide better patient outcomes.
UPS, for example, recently opened a 208,000-square-foot, healthcare-compliant distribution and warehousing facility in New Jersey. This new multi-client hub offers comprehensive services—including inspection, replenishment and sterilization capabilities that can help implantable medical device companies operate more efficiently—and with less inventory.
In addition, the extensive UPS network allows healthcare manufacturers and distributors to reach more than 80 percent of hospitals in the United States within just four hours.
As B2B marketplaces improve their appeal and better utilize supply chain information to become increasingly transparent, it appears likely that B2B buyers and procurement teams will come to rely upon them much more than they do today, and that manufacturers will increasingly come to utilize these new sales channels.