With customer expectations and demands rising steadily, we are witnessing a shift in strategies of the B2B and B2C industries. Lines are blurring between the two diverse markets as entrepreneurs look for ways to target them both.
Many B2C companies are marketing to businesses, while B2B organizations are opting for selling ‘direct to consumer’ (DTC). The breaking down of the barrier between the two types gives rise to hybrid eCommerce.
A hybrid eCommerce platform allows businesses to meet the needs of both B2B and B2C markets. With its potential to revolutionize the eCommerce market, many businesses are considering switching.
That said, if you are thinking of joining the trend, here’s all that you need to know about hybrid eCommerce. The blog highlights the difference between B2B and B2C eCommerce, reasons why you need to switch, and examples of companies leading the trend.
eCommerce Challenges in Today’s Consumer-Driven Market
eCommerce is all about taking risks. It has a huge room for innovation. The flux of creativity with this platform is continuous as more businesses are jumping on the bandwagon and adopting a diversified approach. Although the B2C industry has made its way in that direction, B2B is gearing up to redefine their business model.
Difference Between B2B & B2C Commerce
From the target market and several decision-makers to order size and acquisition strategies, they all influence a business’ marketing strategy and technological needs. Thus, the requirements for switching to hybrid eCommerce also differ.
So, here are the primary differences between the two types that you need to understand before reforming your business model:
B2C businesses target every member of society, from homemakers to teachers, homeowners, students, office workers, and more. Contrarily, B2B companies offer products designed for other businesses, such as mobile app development, marketing, and advertising consultants, and more.
B2B products and services are targeted to businesses of specific niches. On the other hand, B2C brands segregate their target market based on audience demographics.
With B2C markets, the person making the purchase is the sole decision-maker. But that’s not the case with B2B businesses. In the B2B sector, sales involve multiple stakeholders and can expand over a few months.
B2C sales are quicker, straightforward, and even impulsive; people make purchase decisions at the moment. B2B sales, on the other hand, take several phone calls, meetings, presentations, and product demos before completing.
Order Size & Volume
When it comes to pricing, B2C brands price their products on the lower end of the spectrum. However, their overall sales volume is higher than that of B2B brands’. They usually price bigger orders at a higher price but inevitably attract a lower overall sales volume.
B2C companies are inclined towards building a loyal customer base. Since they’re expected to deliver smaller order sizes, labeling them with higher prices would do more harm than good. Their revenue and sales volume may suffer significantly.
B2C companies, on the other hand, deliver shipments in large-scale volume, which leads to fewer order placements. The front end retailer will place an order only when they need to restock their inventory.
Customer Lifetime Value is a metric that defines the revenue generated through a single customer by any business. The LTV value cannot possibly be a constant number as different businesses define their variables.
For B2B businesses, LTV defines the dynamics of their relationships with their clients. Business vitality is a huge factor in the B2B industry. Customer retention and acquisition costs are considered significant in determining the LTV of any business. Because a B2B business hosts several accounts worth thousands and millions of dollars, these companies generate a higher LTV compared to the B2C sector.
B2C companies often land lower customer LTV due to a broader customer base and small order sizes. The main goal of every B2C company is to acquire a loyal following. The cost that goes into acquiring the customer and measuring the profit generated throughout the life of the relationship gives us the general trend of customer LTV in the company.
Acquisition vs. Retention
As explained previously, B2C companies have a lower customer LTV due to smaller orders, and a wider customer base. For that reason, their primary focus is on customer acquisition rather than customer retention.
Unlike B2C companies, B2B companies focus more on customer retention than acquisition. They re-evaluate old accounts, repeat business relationships, and target smaller markets. Selling to an existing customer poses a success rate of 70% while acquiring a new customer and making a sale poses a success rate of 20%. Retaining an existing customer is 5 times cheaper than acquiring a new customer.
Reasons to Choose Hybrid eCommerce
The differences in the B2B and B2C sectors is not only limited to the nature of the business. It goes beyond business strategies, marketing plans, and target markets. A hybrid eCommerce platform isn’t the ideal business model for every business. However, several reasons enable a business to adopt a diversified and highly flexible platform.
Separate Customer Portals
Embracing a hybrid platform allows businesses to build separate customer portals. Due to higher DTC demands and dramatic price variations, businesses need to customize their strategies accordingly.
Every customer portal built, factors in the basics along with the target market, association with the company, order sizes, and volume of purchase. As a result, companies can design a more personalized eCommerce experience.
Although the target markets are relatively different for both B2B and B2C companies, the products they sell along with the information, is identical. Identical information on a non-hybrid platform gives reasons for inefficient scalability. A hybrid platform eliminates the possibility of content duplication.
With a single datastore, businesses can offer relevant content to different departments and markets without worrying about duplicating it.
Omnichannel Customer View
A unified dashboard allows businesses the opportunity to view customer data competently. Whether they want to track customer journeys, review customer behaviors, or track customer engagement, a holistic view of all the data allows both types of businesses to streamline activities proficiently.
Gain a Competitive Edge
The market is full of opportunities. However, for that reason, the competition is quite fierce as well. If a business plans on building a hybrid platform for its B2C or B2B business, they need to spend hours on research, customization, configuration, and personalization.
Why should customers go to their site instead of their competitor’s? For this reason, Businesses need to stand out from the competition, and what’s better than offering a holistic experience on a single platform?
Real-World Examples of Companies that Switched to Hybrid eCommerce
Every day, more and more companies are realizing the significance of a hybrid eCommerce platform offers. Several big names have switched to hybrid platforms to sell their products.
The tech powerhouse is adapting to change now and then. Setting foot into the hybrid world is their recent big move. They worked on spanning 2 different business models to sell directly to companies in-store and online.
With the help of Magento Commerce 1x, they built several web stores that helped them achieve their goals of adding more languages and local stores, connecting the in-store and online experience, and allowing B2B buyers to have their account dashboard.
Have you wondered how a furniture company sells customized furniture online? Steelcase is one of those companies. They re-invented a whole eCommerce experience to help their customers and retailers.
Employing Magento Commerce for their hybrid platform, they were able to build customer-centric web stores for B2B buyers, create a product customization engine for buyers, and support punch-out purchasing.
Build Your Hybrid Ecommerce Platform Today!
Spanning 2 different business models help B2B and B2C buyers find a common digital platform to cater to all their needs. If you’re looking for ways to stand out from the competition, Cubix will help you build an exciting and unique hybrid eCommerce platform!