4 Steps to Digital

Transformation in
B2B Commerce

perficient.com
The COVID-19 pandemic has put a heightened focus on
eCommerce for many businesses. Organizations that previously
invested in strategic commerce approaches are thriving, while
those without a clear commerce strategy and road map have
found difficulty being agile in responding to the increased
demand.

The impact COVID-19 has had on customer behavior will forever

change how we look at commerce.

It is a common misconception that an eCommerce transformation

begins with a website or mobile application. In reality, there are
business decisions to be made and opportunities to explore
before technology even comes into play.

Creating an appropriate strategy and roadmap for your business is

imperative. This guide outlines four steps to assess your readiness
for B2B eCommerce transformation, including:

1. Set Your Objectives

2. Evaluate Your Market
3. Determine Where You Fit
4. Assess Your Internal Processes

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 1. Set Your Objectives
Start by identifying what you want to achieve. There are the standard business goals
to consider, such as increased revenue, but you should also consider goals around
customer expectations.

Improve Customer Satisfaction

A customer-centric focus is required to compete and win in a competitive
marketplace. It’s critical that you align your customer service strategy to your brand
message. Consistent, easy-to-use customer service options are expected. Customers
also expect you to understand them and provide personalized experiences that are
tailored to them based on the relationship they’ve established with your organization.

Digital platforms provide the tools to help accomplish this. By leveraging standard
platform capabilities, you can draw a deeper understanding of your customer to
better meet their needs. Insights into customer activities allow you to identify buying
patterns and journeys. This makes it easier for you to segment them more accurately
to optimize product offers, pricing, and other needs that are unique to them.

The value of a B2B eCommerce platform often has more traditional goals of
providing an improved customer service experience or service at a lower cost rather
than to enable purchasing. Do your customers want to order more easily? See
shipping statuses? Request and manage quotes? View their account balance? These
are examples of benefits that go beyond the ordering process and aim to improve
ease of use to increase customer satisfaction. These capabilities can help you retain
customers and build loyal relationships.

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Growing Your Bottom Line
Improving customer experience is one of the most effective ways
to increase sales. Providing improved customer service via online/
digital channels has been proven to accelerate revenue growth
with customers relative to overall corporate growth. In fact, B2B
eCommerce sales are expected to outgrow B2C sales, reaching
6.7 trillion USD by 2020.1

Improved digital experiences and ease of purchasing will delight

and foster loyal relationships with existing customers. But it’s just
as important to drive new customers. Digitizing customer service
initiatives will reduce order errors and potentially reduce the
number of people engaged to handle order issues. In addition,
an excellent online store can attract new customers that were not
visible to your selling channels in the past.

Before embarking on a digital transformation you must have

measurable objectives for both customer experience and revenue
growth. These objectives will serve as a framework for future
conversations and decisions made as the journey progresses.

B2B eCommerce sales are expected

to outgrow B2C sales, reaching
6.7 trillion USD by 2020.

1
CMS Connected

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 2. Evaluate Your Market
Keeping up with the competition can be difficult in an over-saturated marketplace full
of innovative competitors. Traditional selling methods are no longer the only way to do
business. Consider where you can corner the market.

Improve Customer Satisfaction

The “Amazon Effect” is upending many retail markets. Non-traditional competitors
are coming in and securing market share. One example of this phenomenon is the
bed-in-a-box companies that are changing the market for traditional brick-and-mortar
competitors. This shift is also prevalent in B2B markets. Some very innovative B2B
sellers are even competing against their own traditional brick-and-mortar business
by segregating what they sell online and what they sell in-store. In light of these new
market forces, you must identify your true value to the market.

To match pace with these new and unconventional competitors, you need to explore
your customers’ unmet needs. Now more than ever, B2B businesses selling through
multiple channels need to understand the value of these variable channels. While it
may seem obvious, brick-and-mortar businesses have inherent advantages. How can
you best leverage the resources non-traditional vendors don’t have? This may mean
re-thinking how those resources are used.

Direct-to-Market Opportunity
Many companies are expanding into previously unexplored opportunities
for selling, such as bypassing distribution channels and going straight to
market with their products. Given the tools available today, this strategy
is something you should consider.

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Customer Evaluation
Every B2B customer is unique, whether it be in size, industry,
product mix, or target customer. Consider how best to serve
their needs and the value you can provide. For instance, many
businesses create a self-service system for smaller accounts
and focus their manpower on large clients. The objective
is to provide excellent customer service, even if you have
multiple models to serve your clients. There are new tools and
processes that can deliver great experiences even if they aren’t
a part of the traditional B2B sales and service model.

Digital leaders often begin by creating personas that are too

broad and need to be broken down to a more granular level.
There is no one-size-fits-all solution.

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 3. Determine Where You Fit
Explore opportunities to expand and evolve your current strategy. Can Are they doing research, comparing products, purchasing, or looking
you offer new products? Can you sell from supplier stock, thereby for support post-purchase? If they are prepared to purchase, and you
reducing inventory-carrying costs? Can you reach new customers? are not selling direct, you may consider providing links to marketplace
It may be useful to evaluate these and other opportunities to provide sites or distributors where they can complete their purchase.
new value to existing customers or attract new customers altogether.
Distributor Fulfillment
Online Marketplaces One strategy many B2B businesses are adopting is acting as an
intermediary between suppliers and buyers. After building an
If you decide to bypass your distributor network to sell straight to the
eCommerce platform with a positive user experience (UX), you can
end user, online marketplaces are an excellent place to start. Sites like
expand your online offerings to products you neither produce nor
Amazon, Overstock, and Wayfair are great examples of third-party stock. Acting as a marketplace of sorts, you can include the goods
sites you can leverage to build an enhanced relationship with your and services of other brands in your catalog. This means you don’t
end customers. When buyers are searching for a product online, you have to invest in inventory or handle fulfillment, but rather you can act
want to ensure they find yours. It is also key to understand where they as a channel for third party sellers and provide great user experiences,
are in their journey and how you can fulfill the needs of those buyers. add additional value to the market, and attract new traffic.

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 Selling eCommerce Capabilities
Some larger, more progressive manufacturers that have
developed an excellent eCommerce experience have chosen to
offer those capabilities to smaller channel partners. By creating
eCommerce sites for those channel partners, everyone wins.
The larger organizations maximize their channel, and smaller
distributors reap the rewards of an improved digital presence.
If you chose to explore this business model, it’s important to
evaluate the expenses associated with creating these platforms
and compare them to the cost benefits at scale.

White Label Products

In commodity markets, many manufacturers and distributors
choose to provide white label products. White label products
are unbranded and may either be leveraged by manufacturers
to secure distribution relationships, or by distributors to
support their brand. By adopting this strategy, you can focus
on production and supply chain while limiting investment in
marketing and brand engagement. Selling white label goods to
distributors will allow you to monetize on your channel partners’
customer bases, marketing capabilities, and web traffic. White
label products often bring cost advantages as well, appealing
to cost-driven buyers since brand and sales investments are
reduced.

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 4. Assess Your Internal Capabilities
Before you can embark on a digital transformation, you need to evaluate where your
organization stands today with your availability strategy, product information, sales team,
and IT capabilities to know where you’re prepared to grow.

Availability Strategy
A clear stocking strategy is critical to establishing availability or delivery expectations
and enabling ongoing engagement with your buyers. As you consider that strategy, it
needs to be aligned with your customer strategy. Once clear expectations regarding
availability and lead times are established, you can leverage data to evaluate sales
trends, product costs, logistics capabilities, and replenishment resources. Product
and customer mix may lead some B2B suppliers to adopt some combination of the
strategies noted below.

Build-to-Stock
Also known as “made-to-stock,” this stocking strategy focuses on historic demand
and future sales forecasts to maintain appropriate inventory levels. Orders are filled
from stocked inventory rather than producing or acquiring products as orders come
in. Companies adopt this method when rapid delivery is critical, but this approach is
problematic for high-cost or customized products.

When this strategy is adopted, the next decision centers around inventory placement.
Evaluation of regional demand informs inventory placement, as does delivery cost and
expectations. Some organizations have chosen to establish internet inventory locations
to simplify stocking and limit channel conflict.

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Build-to-Order
Companies that adopt a build-to-order strategy produce products only upon receipt of
order. Also known as “made-to-order,” this method begins the production or fulfilment
process after an order is placed. This results in longer fulfillment times and puts
pressure on the supply chain, but also reduces inventory investment. Manufacturers
and distributors that follow this process generally sell products of higher value that are
more specialized or customizable.

Supply Chain Assessment

Longer lead times are expected for more expensive products that require customization
or have regulatory considerations. For more generic, fast-moving, or lower-priced
items, customers expect quick delivery after ordering (thank you, Amazon). It’s
important to provide transparency regarding lead-time, shipping costs, and any other
costs anticipated when you receive a client order. For many B2B sellers, providing this
level of transparency without human intervention is a significant challenge.

Another factor to consider is simplifying your fulfillment logic. For manufacturers

and distributors with multiple fulfillment locations or production facilities, it can be
difficult to determine the best way to fulfill an order. In many cases, this function is
often provided by customer service representatives. Automating this process can be
complex and difficult, but it’s important for B2B businesses moving online, particularly
given multiple line items orders typical to this market.

Providing a delivery estimate for complex orders can also be a challenge. Shipping
items from multiple locations increases shipping costs, but at times is unavoidable.
Determining when and for whom to provide that level of service is important. When
digitally transforming your B2B strategy, look for areas of your supply chain where
shipping and fulfillment decisions can be automated. Need help? Consider investing
in an order management system (OMS).

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 Product Development and Management share this information throughout the organization. As part of your
digital transformation, rethink how you manage those processes and
When selling products online, you need to maintain consistent, rich what information management systems are used, understanding that
product data across channels, including: the information/data required today may be different from what has
• Product-specific information been managed in the past. As you consider these implications, you
• Technical details may need to bring new skill sets into the organization, as well as IT
• Accurate descriptions professionals, to do the work.
• Installation guides
• Maintenance information Tools such as product information management systems (PIM) can
• Compatible products significantly improve your ability to manage and syndicate product
• Imagery data effectively. But product data management is not a one-time
effort. Data management needs to be a pillar of your business. There
This information must be consistent wherever a buyer encounters it. are multiple product information management (PIM) systems that can
B2B companies often have data scattered across multiple locations consolidate and continuously update data across channels, but it is
and channels (ERP, cloud, internal network, etc.), making it difficult to critical to establish clear ownership of and responsibility for that data.

Structure Data for Success

Sourcing data from suppliers is the main focus for distributors. If your supplier list is long, it can be difficult to gain and maintain product
information to plug into your system. Those suppliers may also suffer from the limitations regarding product data management discussed
previously. Establishing connections and a process to acquire, assimilate, and manage that data is crucial.

For manufacturers, the focus is on internal data dissemination and on supporting multiple distribution channels. From marketplaces to
distributor sites to manufacturer marketing initiatives, it’s vital that your product data is extensive and uniform across platforms. Choosing
a system and a team to manage all this data across these channels is a crucial part of that.

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Sales Structure
The Ordering Process
When evaluating your sales process, begin with how orders come in.
• Phone
• Email
• Online
• EDI

Also consider:
• Order type mix relative to customer size and value
• Order complexity with respect to
- Product complexity
- Number of line items
- Fulfillment complexity
- Compliance

Understand that transitioning to an online/self-service ordering model doesn’t happen overnight.

Your current customers will need support to transition with you as you make these changes.
Carefully consider the customer service implications that may accompany that transition.

Why EDI?
EDI is the exchange of business information in a standardized format. It allows
your clients to send information from their system to yours without any human
interaction. By automating data exchanges, many of the ordering processes can
be streamlined and keeping data up-to-date is more efficient. In some cases,
EDI is the primary technology driving transition to electronic ordering for B2B
businesses. However, it requires significant setup and technical capabilities
on the part of both the seller and the buyer. For many organizations selling to
smaller organizations, the cost and complexity of EDI may be excessive.
 Sales Force Culture
The current structure of your sales workflow will affect the
choices you make in transitioning to a digital sales approach.
• Traditional sales teams are more transactional in their
approach. They spend their time taking orders and making
sure those orders are recorded and filled.

• Consultative sales teams work to understand their clients’

business to better help them anticipate future needs in
selecting products and services.

Automating order entry (self-service) puts pressure on sales teams

to transition to more consultative models. This will require training,
and there will inevitably be pushback from those not prepared to
make the transition.

Automating order entry (self-service)

puts pressure on sales teams to
transition to more consultative models.

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IT and Technology
New technology deployments require a strategy. It can be
tempting to throw technology into the ecosystem very quickly,
particularly when there is a significant technology deficit
within your organization. Consider not only the skills and
resources required to support new technology, but also the
stress integration efforts that new systems will put on existing
teams. Having a plan for ongoing care of your current system
is imperative, as well as developing a roadmap for migrating
new systems in the future.

In addition to skills, the evolution toward digital will put

pressure on technology budgets and processes. Studies have
shown that technology spend is increasing across the board
as organizations realize how critical technology is to their
success moving forward. That increase isn’t always funded
from the traditional IT budget. Sales and marketing teams are
becoming more significant technology advocates, and the
push to upgrade may come from them as well.

Technology Systems and Resources

Commerce digital transformation requires new technologies
and IT skill sets. You need to understand your current
technological landscape. There are several systems that can
benefit your digital transformation beyond a core eCommerce
platform, but you may not need each one.
 eCommerce
An eCommerce platform, like Magento Commerce, provides the base for the shopping and buying
experience, including catalogue assessment, search, filter and refine, and checkout. It’s important to note
the differences between B2B and B2C platforms. B2B platforms provide the functionality one typically
finds in any consumer platform, but also support the additional complexity required of B2B buyers
including customized catalogues, customer-specific pricing, customer-specific logistics and delivery
options, organization-level user management, and enhanced ordering tools and interfaces. Using Magento
Commerce in the Adobe technology stack also provides mobile connection through progressive web
applications (PWA).

Product Information Management (PIM)

PIM systems support both back- and front-end needs when it comes to managing and disseminating product
data. Many evolving organizations manage product data in silos with different parts of the organization
enhancing base product data to fit their individual needs. As a result, that information is often misaligned and
inconsistent. Pulling that data together to support the customer-facing channel can be difficult or impossible to
accomplish without a PIM system. With Magento Commerce, you can connect into your PIM system.

Customer Relationship Management (CRM)

A CRM system allows your internal teams to stay aligned with what customers and clients are doing, regardless
of their department. Any team member has the ability to see customer interactions with salespeople, the
website, and customer service, as well as what marketing materials they’ve accessed and more. By tying all this
information together, a CRM gives a holistic view of your customer and keeps all teams on the same page.

It’s also an essential tool in providing an omnichannel experience for your customers. By enabling clients to
transition from interacting online to interacting with internal teams, your employees will be better equipped
to provide a seamless experience as the customer moves through the buying journey.

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Marketing Automation
Marketing automation systems, like Marketo Engage, are often bundled with a CRM system and have evolved
to help companies market to customers and potential customers. They allow organizations to target marketing
based on customers’ interactions with the business. Consolidating data into these systems enables your teams
to target messaging based on defined customer journeys and content.

Content Management System (CMS)

A CMS is used to manage content across marketing channels and customize what content is presented across
various platforms such as print, website, email, and more. It may also provide personalization mechanisms to
target content to specific users based on customer data.

There is no prescriptive order to implement the systems outlined above. There will be system overlap, and
your organization may not have a need for certain programs. Glaring holes in your technology stack should
be prioritized over less-critical problems where a temporary solution can suffice. In some cases, manual
processes will be sufficient to bridge a gap and fulfill customer expectations. It may be strategic for leadership
to take a stepwise approach in doling out additional technology investments as the digital journey progresses
and demonstrates increasing value.

Order Management (OM)

OM systems provide a mechanism to manage customer orders, which Magento Commerce does.. From
determining how best to fill an order to providing order status updates throughout the lifecycle, these
systems are critical to providing visibility to available inventory and enabling end-users to see their order
status without human interaction.

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 IT Resources
These platforms are evolving at a rapid rate, and IT has to respond quickly to
implement and meet customer needs. While it’s traditionally believed that IT
(specifically technology) is an expensive component of business structure,
it must also be viewed as a part of your value proposition to your customer.

Consider IT from an investment perspective. B2B customer expectations

surrounding the delivery of new and improved capabilities are growing, often
because of B2C experiences. Increased personalization, advanced analytics
to anticipate customer needs, and tech trends like AI are all developing in
traditional consumer markets, and it’s only a matter of time before customers
expect those technology experiences to be a part of their experience. Have an
accelerated IT program to bring value to customers more quickly. Be adaptable
to customer needs. You need to have an IT organization that’s fast when it
needs to be fast, and deliberate when it needs to be deliberate.

Your IT team needs certain capabilities in order to create a more seamless

digital technology transformation:
• The ability to provide analytics and analytics support to maintain clear
performance data
• The ability to integrate multiple systems seamlessly
• Ongoing maintenance and updates to the systems
• Awareness of new technological enhancements that could bring value
to the business

Having an IT infrastructure in place and a team to support these tasks

is a crucial component in the success of your digital transformation.

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What’s Next?
Digitally transforming your eCommerce experience requires strategic thinking
and internal assessment of your capabilities. Technology is not a one-size-
fits-all solution, and having the resources and data to back up your platform
implementations is imperative to your success. Ultimately, COVID-19 will force
a change in the your approach to commerce, requiring you to become faster
and more nimble. This transformation in speed and business agility will only be
possible by building a strategic commerce road map for your business. Magento
Commerce can get you there not only today, but in the future.

Perficient + Commerce
Perficient blends the strategic imagination of an agency with the deep technical
acumen of an established consultancy background to deliver exceptional
customer experiences for the world’s biggest brands.

Driven by customer insights, we gather and analyze the data to determine the
best approach for your omni-channel strategy. Our customer experience experts
craft a journey that tells a story, enabling you to connect with your customers
while providing utility that makes its way into their everyday lives. And with a
deep understanding of business needs and extensive technical capabilities, our
commerce solutions encompass multiple channels, providing a seamless and
efficient experience across your entire enterprise.
Let Perficient help
you on your digital
transformation journey.
Perficient is the leading digital transformation
consulting firm serving Global 2000® and enterprise
customers throughout North America. With unparalleled
information technology, management consulting and
creative capabilities, Perficient delivers vision, execution
and value with outstanding digital experience, business
optimization and industry solutions.

PERFICIENT.COM/BLOGS PERFICIENT.COM/GUIDES (855) 411-PRFT(7738) [email protected]