More than 85,000 businesses have launched online stores or joined online marketplaces in the past four months, according to new research from Growth Intelligence, while there has also been a surge in B2B e-commerce, according to Wunderman Thompson Commerce.
With more than 750,000 businesses forced to close their doors under Covid-19 lockdown restrictions, businesses in nearly every sector have accelerated their digital transformation to adjust to the ‘new normal’ and meet growing demand for online shopping.
As well as businesses that have historically dominated the eCommerce space, the crisis has seen some less likely businesses going online. The Fashion and Apparel sector has seen the largest number of businesses opening eCommerce sites since February, with 8,665 clothing companies adding online payment methods and new eCommerce technology. But Manufacturing (7,129), Food and Drink Retail (4,156), and Agriculture, Fisheries, and Industrial Food Production (3,767) are not far behind.
With research showing that millions of people have been shopping online for the first-time during the lockdown and this new demand set to continue[ii], many businesses that would historically have distributed via shops, restaurants or distributors have started selling direct to customers for the first time.
Growth Intelligence’s AI monitoring found that of the 762,250 businesses that were forced to close due to Covid, only 308,861 (41%) have fully reopened, with 453,389 (59%) either still closed or trading under severe revenue-limiting restrictions such limited hours, limited locations, seeing clients by appointment only, adding waiting lists, cancelling historical orders or only serving key workers.
However, with many employees still on furlough and movement still restricted, tens of thousands of businesses are surviving and even thriving by pivoting their business model online.
Tom Gatten, CEO of Growth Intelligence comments: “It’s remarkable to see the speed at which small businesses across the country have adapted. Being unable to trade in the traditional sense has been a catalyst in driving digital transformation and where one door has closed, this nation of shopkeepers has forced another to open. Thousands of businesses are making the most of the tremendous opportunity that growing demand for online shopping is creating. While our data shows a very slow return to what we previously considered ‘normal’, the new environment is opening new markets and this will reinvigorate the economy.”
Meanwhile, B2B has also seen a switch to ecommerce. According to The B2B Future Shopper report 2020 – which saw Wunderman Thompson Commerce survey more than 200 B2B professionals in the UK on the current B2B commerce landscape – many B2B businesses have moved away from traditional sales representatives in favour of ecommerce. While almost half of respondents (44%) said their business bought directly from salespeople prior to the coronavirus outbreak, this number has now dropped to just one-in-six (16%).
B2B online purchases have increased by nearly a quarter (24%) since last year. With Covid-19 driving more consumers online, the number of online B2B purchases has risen from 41% before lockdown to 46% during lockdown. And changes in consumer behaviour have already forced some businesses to switch suppliers to facilitate their new ways of working, with nearly a fifth (18%) of buyers changing supplier for all purchases as a result of the pandemic.
But in spite of growing demand, more than two-fifths (43%) of businesses still find buying online more complicated than buying offline. The top reason why businesses switched supplier was because their existing supplier was out of stock (44%), highlighting ongoing issues facing the supply chain as a result of the outbreak.
What’s more, the ability to provide products online remained important for many B2B purchasers, with 43% claiming they had changed suppliers because they were not able to offer online ordering and 42% changing due to the supplier’s inability to offer delivery during lockdown.
Neil Stewart, CEO, Wunderman Thompson Commerce explains: “We’ve seen Covid-19 dramatically shake up consumer retail, so it is unsurprising to see a similar pattern in the B2B landscape. However, with supply chains heavily impacted by the pandemic, businesses are struggling to match this demand and need to have the infrastructure in place to cope with surging online sales. Many buyers may not be comfortable, or even able, to purchase items in person and will therefore look to the plethora of other options available online. The number one priority for B2B retailers over the coming months will be to ensure they can provide the same services online as they do via physical channels.
Amazon’s popularity as a B2C platform means it is poised to tap into the growing demand for eCommerce in B2B. Nearly a fifth (18%) of all B2B buyers start their journey on Amazon Business, with 11% starting on its B2C site. Almost three-in-five (59%) don’t currently purchase through Amazon Business, but say they intend to in the next 12 months. Whether it’s Amazon or another online marketplace, almost three-quarters (74%) express a want for something akin to Amazon Business, claiming it’s more convenient than purchasing through individual supplier portals; this figure rises to 87% for medium sized business, 84% for the biggest companies and slightly over two-thirds (68%) of SMEs agree.
29% of respondents said the vendor’s own supplier portal/online catalogue provided them the best product availability during lockdown, but Amazon’s role is not insignificant with 16% saying so. This suggests that while the B2B community is using Amazon and want access to a vast online marketplace, they remain nearly twice as likely to go direct.
Lessons can be learned from the current B2C experience, with the majority (72%) of B2B buyers admitting they expect a similar experience on a B2B site as they get on a consumer website. This could be accelerated by opening B2B sites up to general consumers, with 70% of respondents agreeing that B2C consumers should be able to buy on a B2B website at a standard price.
Stewart concludes: “The pressures that businesses are under has opened a potential gap for growth for Amazon Business. We’ve already seen with its B2C platform that it has the infrastructure to match current demand. While most buyers still prefer to go directly through a supplier, Amazon’s vast infrastructure is an appealing alternative at a time when supply chains are heavily disrupted. And with businesses increasingly looking at the B2C experience as the benchmark for B2B shopping, it would be unsurprising to see a move towards online marketplaces such as Amazon become the norm.”
this lovely article taken from here