The Covid-19 pandemic has changed the way in which many businesses operate, some permanently. Traditional retail stores have run into a figurative buzz saw trying to keep their doors open. They have been forced to quickly develop skills that have been more associated with digital retailers. These include increasing conversion rates, emphasizing ecommerce sites, and deciphering mobile commerce trends for the upcoming holiday season.
For online retailers, the transformation caused by the pandemic has been no less dramatic. A recent report by McKinsey & Company has shown that in just the last three months e-commerce penetration in the U.S. market has grown more quickly than over the last ten years combined.
Some B2B companies have also witnessed a strange phenomenon – dramatic growth in consumer demand. As customers move more of their lives online, they have discovered that many B2B-centric operations offer products and services that are actually quite useful to the average consumer.
B2B businesses have taken note of this trend and considered adding B2C options to their online stores. In this article, we’ll look at the advantages and drawbacks of that tactic, how best to implement it, and what it means for your business strategy.
Opportunities and Challenges
There is one major advantage of getting into the B2C space for businesses and that’s higher margins. Selling to consumers as well as fellow businesses means that you can access a larger, more diverse customer base, therefore building resiliency into your operation.
Getting into B2C is not without its risks and difficulties. Marketing and distribution systems are generally more complicated in the B2C space, if only because of the increased numbers of individual customers and smaller orders. This means that you must enhance your audience research processes to generate intelligence on these new customers. Depending on your product or service, there is the possibility you will need to add capacity to your warehousing, distribution, and fulfillment networks.
Another challenge involved with moving into the B2C space is compliance. Strictly B2B operations are used to having the data they hold governed by bespoke agreements between themselves and their customers. In the consumer space, there are a large and growing number of frameworks, such as Europe’s GDPR and the upcoming Cloud act which, despite what many see as drawbacks, intend to grant consumers a significant level of protection and control over their data held by businesses they patronize.
Adding B2C Options
If these challenges can be overcome, however, adding B2C options to your current B2B line can be a great way to increase revenue. And from a technical point of view, it need not be difficult. You have, in my opinion, two approaches available when it comes to adding this B2C sales: build a completely separate website or combine two experiences into your existing store.
Arguably, building a completely separate website to handle B2C orders is the ideal situation, because this allows you to include the variant requirements of both customer bases. Your B2C website will have different payment requirements, integrations with your back office, product visibility, order minimums, promotions and shipping options, to give just a few examples, and working with each of these elements is easier if done separately from your B2B business.
Building two separate websites means you can also separate your marketing more easily.
Consumers generally expect a more personalized, proactive approach to their purchasing journey than the businesses you are used to. In addition, you should recognize that you’re now dealing with two different “busy” seasons and product strategies, and should have the capability to adapt to these easily.
It’s also possible, however, to build two almost completely distinct experiences into one website. More advanced website design and implementation software, can be used to separate users based on their persona and then offer each group of potential customers a different experience. Taking this approach might be suitable if your business is relatively small, but complications can quickly arise if you find yourself serving thousands of orders.
Whichever technical approach you take, be aware that you will need different marketing strategies for these two sets of customers. The primary difference is one of scale: while in your B2B business you might look for one sale of $5,000 a week, for B2C customers it’s more likely you’ll receive 100 sales of $50 each.
The reality of that number of sales per week means you need a different approach to marketing products to new B2C customers. B2B clients looking to make large purchases generally conduct extensive research; a B2C customer forking over $50 will typically not. So you will have to do their research for them.
Ideally, every B2C customer who visits your website should be assessed via a web analytics platform and segmented into one of a number of “personas.” You’ll offer each customer a range of personalized offers, products, services, and content based on what they are likely to respond best to.
Working with data doesn’t stop there, though. Ultimately, you should collect as much information as possible – within the boundaries of the relevant legislation – on your new B2C customers, because this makes your marketing strategy more effective.
Once inside the B2C space, the sky’s the limit. Building an effective B2C strategy offers access to a vast number of new customers who will force you to greatly improve your marketing skills. That’s not to say that you have to completely re-invent your strategy – age-old tools like gated content can still be effective, for instance, but you should also recognize that B2B customers are fundamentally different from their B2C peers.
Ideally, these two approaches should be mutually supportive and build resilience into your business. When the next pandemic hits (and it will eventually), you’ll already be in a great position to take advantage of unpredictable market fluctuations.
Brian Skewes is a technologist into deconstruction. Over two decades of self-employment, he has accumulated a wealth of inadvertent real-world lessons related to building, running, and preserving a small company.