In an episode of the popular ABC show “Shark Tank” that aired last week, founders of the web-only fashion retailer ranked in the Second ...
Companies that got into e-commerce to serve business clients often find consumers anxious to buy as well. Serving two distinct customer sets requires new skills and technology that B2B e-commerce players are mastering.
In business since 1946, family-owned Tacoma Screw Products Inc. has decades of experience providing other companies with the nuts and bolts needed to run just about any kind of manufacturing, construction or service business. And if Tacoma's catalog of some 45,000 products doesn't have the particular style or size of rivet or bolt that a buyer needs "our skilled machine shop staff will fabricate it," the company proudly proclaims on its web site.
With a staff of about 50 account reps and a chain of 16 branch locations for providing sales and service, Tacoma is a regional Pacific Northwest powerhouse with some 40,000 clients ranging from aerospace manufacturing giant Boeing Co. to home builders, farmers and government agencies. And since launching its e-commerce site a year ago, it's gained many new customers, some of them consumers.
"E-commerce has grown our market reach to customers we didn't even know were out there," says Eric McGregor, Tacoma's manager of e-commerce and operations support. "We're now reaching across the country and seeing orders from outside the Northwest." Some of the orders come from consumers, including the purchasing managers at major corporate clients who have begun placing orders for things they need for personal home projects. That's helping Tacoma reach into the market for smaller businesses and consumers who are buying on TacomaScrew.com what they might—or might not—also find in a local hardware store, like screws, rivets or internal screw thread housings used in making industrial machinery.
"We have a large assortment of springs for doors, and I see a lot of people ordering different springs, or things like wood screws—the buyer could be a company or an individual," McGregor says. "These are things they could get from their local hardware store, but they're ordering from us."
Indeed, B2B companies of all stripes and sizes are finding that as they build e-commerce sites intended for traditional corporate and government customers that consumers and small businesspeople, such as contractors, come shopping as well. That provides a welcome new revenue stream for these B2B companies, but it is also forcing them to adopt technology that allows them to serve different categories of customers well. They have to develop mechanisms for dealing with new problems, such as when online competition forces the consumer price of an item lower than what a company charges corporate customers.
There are plenty of examples of traditionally business-to-business companies developing business-to-consumer expertise as a result of their expansion into e-commerce.
Women's bicycle gear and apparel brand manufacturer Terry Precision Bicycles For Women Inc., for example, developed better ways to manage inventory and connect with consumers and its retail dealers. SpaEquip Inc. figured out how to more effectively manage pricing for its contract business customers and for the increasing number of new customers, including individual consumers, coming to its web site. And Belkin International Inc., which manufactures electronics devices like computer network routers and iPad accessories, found ways to more efficiently manage inventory for both its relatively new consumer channel and its traditional business channel.
As these and other companies grow their B2B and consumer businesses, they're taking on new challenges in technology deployments. They include providing web sites that each type of customer finds easy to navigate, and creating centralized product databases that allow the company to present one type of product information to business buyers and another to consumers.
Several e-commerce technology vendors specialize in serving B2B companies, including those that cross into consumer markets. Some offer more comprehensive systems than others, providing back-end product, inventory and order management systems integrated with the customer-facing e-commerce application, as Forrester Research Inc. notes in a report released last month.
Electronics manufacturer and retailer Belkin International needs that kind of all-encompassing technology system. Belkin sells thousands of networking and consumer electronics SKUs to customers in more than 30 countries. It was crucial for the company that it have central control of product data and pricing across all of its markets on a global e-commerce site, chief information officer Deanna Johnston says.
To meet the challenge of expanding the company's web sites and e-commerce sales globally, Belkin uses technology from hybris AG that lets it maintain all its product information in a central database. "We use hybris so we can have one source of the truth for all of our product information, and share that content globally while still easily supporting localization needs," Johnston says. "The really good thing about the hybris architecture is its product catalog, which uses the same underlying data architecture while allowing for different product presentation layers for each channel." Hybris was acquired this year by software company SAP AG, which, like hybris, is based in Germany.
Andy Hoar, an analyst who covers B2B technology and strategies at Forrester, says product information management and web content management applications, such as those built into the hybris software platform, are crucial for providing accurate product information online, particularly when a company sells a large number of SKUs across business and consumer markets. A product information management, or PIM, system ensures that a retailer has accurate and consistent product descriptions across its operating departments, including marketing and merchandising. "The biggest challenge is product information management," Hoar says. "No matter how good an e-commerce system is, if the product data isn't accurate, it's no good."
All too often, he says, companies enter new product information from their suppliers inaccurately—a problem that's exacerbated if a company presents incorrect information across both B2B and consumer selling channels resulting in the same products listed with different identifiers across multiple applications such as web content management and marketing management systems. That can make it impossible to show accurate product data across web pages and marketing materials for business as well as consumer customers. An effective PIM system, Hoar says, ensures that a company works off the same core information for each product as it modifies pricing or tailors descriptions for particular merchandising displays and marketing materials intended for business versus consumer selling channels.