Conquering new markets, expanding the assortment, getting more new customers - isn’t it what keeps modern retailers and manufacturers awake at night?
With new technologies and opportunities available - it’s not a dream anymore.
One of the most effective ways to turn these into reality is to think about incorporating a marketplace model into your existing business system.
In this article, we will draw some arguments about why B2B retailers should launch their own marketplace and how it can take their business to the next level.
Let’s get into more details now.
Why B2B companies should launch their own online marketplace
Let’s imagine that you are a well-established B2B company with more than a decent client base and authority on the market.
You have already proved yourself as a reliable provider of certain product categories. But first or last comes a moment when you need to move further, scale your business, grow your audience, and break into new markets.
How can you actually do this?
Here are some of the things that come to mind first:
- Increase your product assortment
- Start to serve new customer segments
- Build more value for customers
- Grow the number of revenue channels
- Grow the number of distribution channels
No need to hide the truth, managing B2B projects is hard. You need to deal with two business owners, keep track of contracts, manage invoices for types of companies, and attract other customers.
One of the most effective ways to automate this process at less cost is to build your own B2B marketplace.
In the study "Rise of the global marketplaces", analysts predict that marketplaces will account for 40% of the global online retail market by 2020.
But what do retailers and manufacturers think about this?
Let's review some data from RetailWeek Connect report, who surveyed over 60 senior retailers to find out their attitude toward owning a marketplace.
According to it, 48% recognize that hosting a marketplace means there is no need to negotiate costs and margins with suppliers, and that they can widen their product offer with no costs.
One more benefit of developing a marketplace is a full control over the customer journey.
You will get a lot of insights about what they consume, why, and what products are the most popular. Tracking this info when selling through the external channels is impossible, but you will have these data on your fingertips as a marketplace owner.
An online marketplace will also help you conquer new markets, add more brands, and expand into new categories. In addition, you get a chance to offer more products to your customers for a lower price and give them an opportunity to buy straight from the source.
Let's review an example of the company that has integrated a marketplace model.
Albertsons - one of the largest food and drug retailers in the US has recently announced that it's going to expand its online grocery offering with a new marketplace. This marketplace will first serve as a separate website but will be integrated with Albertson's digital experience later. They expect that this marketplace will help to:
- Gather data on products trends and customer expectations and help vendors better evaluate market opportunities.
- Give vendors access to a wider range of products.
- Help capture a share of direct-to-consumer sales that might otherwise have gone through Amazon or other manufacturers.
"If you're a small player with a very good product or a big consumer packaged goods company with a small unit, you will struggle to get the attention of some of our larger banners," said Narayan Iyengar, senior vice president of digital marketing and e-commerce at Albertsons.
"Armed with data from the marketplace, brands can make their case for shelf space in Albertsons' stores. On the flip side, the data Albertsons has access to through its efforts will help it better understand its customers".
As you can see, the marketplace integration will help Albertsons utilize their existing traffic, give "early" brands more opportunities to sell and win revenue.
Let's recap the benefits marketplace gives to B2B distributors and manufacturers.
B2B marketplace benefits for manufacturers
B2B marketplace enables manufacturers to:
- Interact with their customers, track customer data and own customer experience
- Convert directly to your website
- Connect suppliers and customers without a necessity for them to visit multiple distributor sites
- Build high-quality supply chain by verifying and vetting suppliers
- Automate the sales process
- Incorporate multi-channel strategy
B2B marketplace benefits for retailers
- Get inventory visibility
- Buy straight from the manufacturers
- Have an access to a large client base
- Offer long-tail assortment
- Give B2B customer B2C shopping experience
- Provide better choice and service to your customers
- Become a leader in their niche
- Test new products and categories
- Increase in-store visits
- Increase assortment by adding 3rd party sellers
- Open new categories without investing in warehousing and logistics
Things to remember when building a B2B marketplace
Conduct concept development
Concept development is an essential stage that builds a pillar for your future project. The more efforts you make during this stage, the stronger this pillar is.
When working with companies that need to validate their idea, we, at Apiko, offer them concept development that includes product analysis, landing page development, wireframing, and prototyping. After this, our clients get a fully-developed business logic, value proposition, and ready-to-test wireframes.
Don't ignore this stage before proceeding to development itself, as it will enable you to test your idea and check if this is exactly what your audience needs.
- Find problems in your market and solve them with the help of B2B marketplace
Most of the mistakes entrepreneurs make in the early stage of product development is that they choose the company oriented approach to build a value proposition. In most cases, this leads to failure.
Wrong approach - Company oriented
- What can we sell to the consumers?
- How can we do it effectively?
- How can we gain profit from the customers?
- How can we build relationships with them?
Put your customer in the first place instead.
Right approach - Customer-oriented
- What tasks your customers struggle with? What inspires your customers and how can you help them achieve their goals?
- How do your clients prefer to receive offers?
- What type of relationship with the company do your customers prefer?
- What are the real values your customers are ready to pay for?
- Сreate an empathy map of your potential customer
Empathy map is a tool teams use to get inside the mind of their potential customers and better understand their thoughts, pains, and gains.
To create such a map, gather your team and define all customer segments you are going to serve. Then, create a buyer persona portrait for each of these segments. For this, give him/her a name and define demographic characteristics. After this, answer the following questions. Let's assume that this is a woman.
- What does she see around? (Who surrounds her? What offers does she receive?)
- What does she hear? (Who is she influenced by?)
- What does she really feel? (What is important for her in business? What are her goals?)
- What does she do? (What does she tell to her team?)
- What are her pains? (What are the obstacles she faces in everyday life?)
- What does she struggle to achieve? (What is a success for her? What strategies can she use to achieve her goals?)
In the case of B2B marketplace, you can divide your audience into retailers and manufacturers, and segment them according to the industry, revenue, location, etc. This technique will give you an insight into how your marketplace can bring value.
- Make sure that the brands that sell on your marketplace comply with your сompany values.
When looking for potential customers, choose only those suppliers that work in the similar industries.
Source: RetailWeek report
Trendy features for B2B ecommerce sites
Auctions give an option for retailers to sell products by offering them for bids. B2B online auctions help manufacturers and retailers draw more attention to their products and gain new customers.
Chatbots will help you increase sales, help generate more leads, improve customer service, and cut customer waiting time.
Source - eCommerce Trends 2018
Implementation of a chatbot system into your B2B marketplace is a great way to automate lead generation and management and speed up orders processing.
We, at Apiko, have integrated a chatbot system into a B2B marketplace that connects service providers with companies. A chatbot receives a request (in which a company reports about some equipment malfunction, etc.), after which a system automatically creates a detailed work order, which is then processed by technicians.
Solutions like this help businesses serve customers more quickly and lead them to the purchase stage.
There are a lot of methods to implement AI in your B2B marketplace. Here are some of them:
- Allow customers to take a picture of a product they like in-store and then find the same online
- Online personalized search and shopping recommendations
- Computer vision technology
Automatic invoice management gives suppliers and manufacturers an opportunity to quickly manage invoices, fetch the data they need, and save time.
Provide retailers with data about who their customers are and what affects their buying decisions. For example, marketplace Spring provides complete information about the customer’s spending online and offline (such as purchase activity, geolocation information, contact information, etc.) to give retailers insights into new revenue opportunities.
With bulk pricing, users have a chance to order a large number of items at a lower price. In this case, buyers select the number of products, indicate their options and characteristics, and after this, the price is calculated.
Bonus: Learn more about ins and outs of B2B marketplace development
Operating your own B2B marketplace can open new horizons in your career and help you break into new markets. The statistics we have used in this article prove that retailers recognize the necessity of hosting a marketplace and owning the customer journey. It will help them to incorporate omnichannel strategy, grow assortment, gain new customers, and become a leader in their niche.Business growth