Millennials have grown up. COVID-19 ravaged the globe. And business-to-business (B2B) transactions will never be the same.
A new white paper from DHL Express said that by 2025, 80% of all B2B interactions between suppliers and buyers will take place in digital channels. The company cited the introduction of tech-savvy millennials into the workforce and the rapid acceleration of digital trends because of the COVID-19 pandemic that forced large segments of the global workforce to shift to remote work.
“What is predicted for the future of the B2B sector has already been visible in the significant B2C e-commerce rise over the last years, where DHL Express experienced high growth rates particularly during the holiday peak seasons (e.g., Easter, Christmas) and mega shopping days (e.g., Black Friday, Cyber Monday),” the report said.
B2C e-commerce volumes rose 40% year-over-year in 2020 throughout DHL’s network. The company said it delivered 484 million shipments in 2020, approximately 9% more per day than in 2019. The volume increases drove record results for parent company Deutsche Post DHL Group. DHL Express saw an 11.9% increase in revenue in 2020.
“Even in times of worldwide shutdowns, globalization has shown its resilience, fueled by digitalization and the power of global trade,” John Pearson, CEO of DHL Express, said. “These trends have led to an ever-growing number of consumers to shift their shopping activities online. The pandemic has accelerated this development like never before, with a sharp rise in businesses selling their goods in the global marketplace. E-commerce and global logistics thus provided the key to unlock local shutdowns, keep economies running and mitigate the impact of COVID-19 for many of our customers.”
The trends seen in the B2C marketplace have spilled over to the B2B segment, DHL said, noting that global B2B e-commerce revenue had surpassed $12.2 trillion in 2020 – more than the B2C market – with predictions it would grow to $20.9 trillion by 2027.
“We have been facing the pandemic for over one year now – a year that showed how nearly a decade of digital evolution happened in just a few months’ time, with online shopping and cross-border shipping as the new normal. And this is true not only for B2C retailers, but also in terms of B2B e-commerce as companies started recognizing that online selling platforms are crucial for their business success, today and in the future,” Michiel Greeven, executive vice president of global sales at DHL Express, said.
The white paper said that 73% of all B2B purchasing decisions are now made by millennials, who grew up on technology and are now fueling the rapid digitization of the global economy. A Gartner survey found that 44% of all millennials prefer no sales rep interaction at all in a B2B purchasing setting.
“If B2B businesses want to make the most out of the new cross-border and e-commerce opportunities, they need to start adapting to the changing buying behaviors, especially with the upcoming generation of millennial as B2B decision-makers, who are further driving the digitalization of the sector,” Leendert van Delft, vice president of global sales programs and global e-commerce for DHL, said. “B2B customer experiences have to be more aligned with the digital B2C experiences.”
The shift is not totally unexpected, but the pandemic accelerated it.
“2020 brought with it great challenges, which exposed the need for B2B supply chains to be more flexible. New, digitally focused ways of doing things were brought in, and now their benefits have been felt, won’t be going back,” the report said.
The DHL report also said businesses need to invest in digital infrastructure if they have not already. This includes artificial intelligence, machine learning and big data analytics.
“These technologies allow the streamlining of internal and external business processes to improve the accuracy of demand planning and forecasting,” it said.
Improving the customer experience is also critical, including live online support.
“The research pointed to a simple but effective on-site search engine as essential to enable customers to find and view the products on offer. The more sophisticated B2B players integrate a more comprehensive suite of tools to help their customers navigate their sites and find detailed information about the products, including mega menus, video product demonstrations, website tutorials and competitor comparisons,” the report said.
Personalization and omni-channel ordering are also important factors, as B2B buyers are expecting recommendations based on past purchase history and customized product price requirements, and they are expecting this experience across platforms – from online to physical stores – and devices.
“Perhaps unsurprisingly, many interviewees identified the critical role of logistics in B2B cross-border e-commerce,” the report said. “This is not just about last-mile delivery, but also the overall fulfillment strategy. To increase their competitiveness and address different customer requirements, B2B e-commerce businesses are emulating the strategy of online retail platforms by providing multiple transport and delivery options to meet different cost, transit time and/or service requirements.”
DHL advises businesses to look for opportunities to expand capabilities in these areas and seek out partners to help.
“Digitally native buyers, combined with the ongoing effects of the pandemic, are pushing through rapid change in B2B supply chains. Along the buying journey, B2B customers want flexible, convenient and digitally focused services more aligned with their B2C experiences,” the report summed up.