How has COVID changed B2B so far?
COVID has pushed business in directions never thought possible on a global scale. From massive downturns to the escalation of fringe players to global players, COVID is forever changing the way business to business (B2B) engages, transacts and relates to digital transformation.
The familiarity with business to consumer (B2C) digital players such as Amazon, eBay, JB HiFi and Officeworks, has long overshadowed the ability of B2B to match the same effectiveness in their transactions. The Visa 2020 Back To Business Study showed that consumer e-commerce grew by 25% each week since April, something B2B is only just catching up with.
COVID is however fast tracking the development and acceptance of new B2B technology as face to face becomes of less value when making buying decisions. The Adobe Digital Economy Index indicated the accelerated change that is happening right now was thought to be 4 to 6 years away.
The areas in B2B that have been affected the most, include new technology, acceptance of that technology and people affected by that technology.
A recent McKinsey report indicated that, "more than three quarters of B2B buyers and sellers say they now prefer digital self-serve and remote human engagement over face-to-face interactions. A sentiment that has steadily intensified even after lockdowns have ended".
The loss of face to face meetings and events has certainly triggered a drive to digital. A drive that technology companies have been pushing for a while and something that COVID has now put into hyper drive. An acceleration that is also causing anxiety for many businesses paralysed by the lack of information, clarity and effectiveness of digital options.
Many businesses still sell the status quo which has its own price, especially if they have a "when this is over'' mentality to a past normal. Businesses who are still working the whiteboard and brainstorming sessions to drum up new leads or to consider what digital directions to take, will find themselves left behind once the so-called storm has passed.
The below illustration from PROS survey of global purchasing professionals indicates the increase in digital purchasing since the outbreak of COVID. It is a sustained trend post COVID, with close to 50% of buyers expecting their purchases to continue through digital channels.
With that continuation of buyer confidence in digital, McKinsey points out the current trend of B2B small online purchases will soon be overtaken by much larger purchases as the confidence in the technology and security become part of the new business normal. When a $50,000 purchase becomes a normal buying transaction as indicated by 70% of B2B decision makers, six figure purchases won't be far behind.
The challenges for face to face business meetings has been overcome in large part by the burgeoning video chat environment with Google, Microsoft, Slack and the current market darling, Zoom, capturing the attention of every C Suite executive and all of their sales and marketing people.
The quick acceptance of these models has surprised some and left many exhausted but businesses are now more reliant than ever on the convenience and adaptability of the new face of normal meetings. McKinsey points out that revenue generated from video related interactions has increased by 69%.
For B2B there is only one option, go digital or stay home. The optimism shown for the changes so far, to become permanent, give cause for celebration on behalf of digital businesses as adoption rates climb and transactions increase. There will also be a shift to virtual sales, extending business reach and lowering HR costs.
All of this has become business as usual in the last 6 months, giving way to much optimism that digital B2B commerce will thrive and become the new norm.