Compared to online retail (B2C), the B2B commerce market is considerably more intricate. Business customers typically establish long-term relationships that involve recurring, repeated or long term purchases. Despite this, B2B customers also anticipate the convenience of online ordering options that they are familiar with in their personal lives. In the current digitally oriented landscape, B2B buyers should not have to endure outdated and sluggish digital commerce experiences. Nowadays, the expectations of B2B buyers are just as high as those of consumer buyers. Therefore, it is increasingly important to have a clear understanding of the fundamental differences between B2B and B2C commerce, as outlined below based on my experience.
- Buyers (of the app or product): B2C products are purchased by individuals for their personal needs, and the buying process is often straightforward and driven by impulse. In contrast, B2B products are bought by a purchasing department, and there are typically numerous processes involved before a purchase is made.
- Users (of the app or product): In B2C, the purchaser is typically the end-user, and the number of users is usually quite large. On the other hand, in B2B, the users are a distinct group of individuals from the buyers, and while there may be fewer users overall, the volume of transactions per user is generally higher.
- Ingress points / Channels: For B2C, the channels of communication often include generic search, online pages/forms, chat, and social media. In contrast, B2B channels of communication typically involve specific searches using part numbers, UPCs, product codes, etc., as well as interactions with sales representatives, customer service, and e-procurement systems.
- Pricing: B2C customers are frequently enticed by promotions and discounts, making these factors crucial in determining pricing. As a result, concepts such as Every Day Low Prices and Price Match have been widely embraced. In B2B, pricing is a complex function that considers the buyer segment, the specific customer, the likelihood of repeat purchases, volume discounts, and other factors such as tax exemptions and rebates.
- Payment: B2C transactions are primarily conducted using credit cards or payment apps such as Apple Pay and Google Pay. In contrast, B2B customers typically use payment methods such as Pay By Invoice, checks/drafts, and bank transfers.
- Supply Chain: When physical goods are involved, the supply chain becomes a crucial consideration, and it is important to understand the differences between B2C and B2B. In B2C, the supply chain is optimized for speed, with products positioned as close to the customer as possible to facilitate same-day, next-day, or two-day delivery. On the other hand, in B2B, the supply chain is optimized for cost, resulting in a greater emphasis on consolidation and fill rate maximization.
