Snap launches Spectacles.com, an e-commerce site where shoppers can buy sunglasses with a built-in camera.
A Forrester Research report released today projects U.S. manufacturers, wholesalers and distributors will sell $780 billion to other companies via the web this year, and that growth is accelerating. Many business buyers prefer to shop online and sellers can cut costs by serving them via the web, Forrester says.
Retail e-commerce may still be sexier, but B2B is where the biggest sales and growth figures are.
In a report released today, Forrester Research Inc. forecasts that business-to-business e-commerce sales in the United States will reach $780 billion this year—more than twice the most recent figure of $304.91 billion in U.S. retail e-commerce sales released by the U.S. Department of Commerce, for 2014—and is on course to grow at a compound annual growth rate of 7.7% until it reaches $1.13 trillion in 2020.
The growth will be driven largely by “channel-shifting” B2B buyers who are buying more online than through phone and other offline channels, and the opportunity for manufacturers, wholesalers and distributors to cut operating costs by processing more sales to customers through self-service e-commerce sites and electronic processing of orders, Forrester says in the report, “US B2B eCommerce Forecast: 2015 to 2020.”
Forrester points to “key categories” that are driving the most growth. It says petroleum and petroleum products, and drugs and pharmacy sundries account for the largest share of U.S. B2B e-commerce sales today and will continue in the lead in 2020. But it says the fastest-growing categories over the next five years will be such durable goods as motor vehicles, and motor vehicle parts and supplies; electrical and electronics products; and industrial machinery, equipment and supplies.
“B2B buyer behavior has changed dramatically in the recent years,” Forrester says in the report, which was authored by e-business analyst Andy Hoar along with other Forrester analysts. “Both professional and non-professional B2B buyers are now taking a digital-first approach to discovering and making purchases.”
The report calls out several trends driving the trend to more than $1 trillion in B2B online sales by 2020:
● Buyer preferences for researching and buying online. 74% of B2B buyers today research at least one-half of work-related purchases online, and 30% complete at least half of their work-related purchases online. Citing data collected last year in a study conducted with Internet Retailer, Forrester says it expects the percentage of B2B buyers completing at least half of their work-related purchases online will nearly double to 56% by 2017. It adds that the trend to increased online purchasing will accelerate partly because of the increased use of smartphones and other mobile devices to discover and research products, and place orders
● The opportunity to cut the cost of serving customers. B2B companies can slash the costs of serving and selling to customers by as much as 90% by introducing self-service e-commerce features, Forrester says. It notes that 52% of B2B executives say they have reduced their customer-support costs by migrating offline customers online, and that 56% say they have customers they can only serve profitably online.
● The value of building loyal multichannel B2B customers. When B2B customers buy online as well as offline, they spend more in total and per order, and become more engaged and loyal customers, Forrester says. It notes that 60% of B2B companies say their B2B buyers spend more overall when they interact with sellers through multiple sales channels. “Multichannel B2B customers are also more likely to become repeat and long-term customers, as well as try new products and reconsider lapsed or mature brands.”
Forrester’s forecast of $780 billion in U.S. B2B online sales this year increases by 40% its prior estimate of $559 billion, which it released for 2013. A year ago, Forrester noted that the market was growing rapidly, but the firm didn’t release new estimates until today.
Forrester’s new estimates are similar to estimates made last year by Gene Alvarez, vice president and analyst at technology research and advisory firm Gartner Inc., who estimated U.S. B2B online sales at about $800 billion and increasing rapidly to $1 trillion. Another report, by research firm Frost & Sullivan, projects that U.S. B2B e-commerce sales will reach $1.9 trillion by 2020, as global B2B online sales will reach $6.7 trillion.
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