5 Reasons Small Businesses Have Not Embraced Online Ordering
Over the last few years, consumer spending has been steadily moving from brick and mortar to online. In 2014, it's predicted that 1 billion people globally will make purchases online, and B2C e-commerce is expected to increase by 20.1 percent, reaching $1.5 trillion.
The ability to shop online offers consumers a host of benefits, including the convenience of buying in the comfort of their own home and the opportunity to choose and compare suppliers and research the best price. The advantage for suppliers—lower overhead cost per sale—is obvious as well.
With the burgeoning role of the Internet, it would seem natural for B2B transactions to experience exponential online growth as well. The traditional selling methodology for wholesalers and manufacturers is to send sales reps to present their catalogs and take orders. Manufacturers are always looking for cost-effective ways to streamline their sales operations. By moving to a self-service model, sales reps can be eliminated, activities scaled, and margins increased. It makes good business sense. Considering that buyers are generally tech-savvy, one would have expected that during the last decade, as with 35mm film cameras, sales reps would have become a relic of the past. But that hasn't happened.
Following are the five main reasons small businesses have been slow to order online:
1. Decisions are critical. In contrast to consumer online purchases, where a specific product or service is sought, business purchases are strategic and much more complex. The smallest mistake in ordering can be really damaging. Except in the case of a stable business with repetitive monthly orders, buyers will generally not take this risk. Small businesses need the guidance of a sales rep when making purchasing decisions.
2. The human touch. Retailers want to think their suppliers are acutely aware of their needs and that they're getting a special deal. According to a Corporate Executive Board survey, most B2B buyers' purchase decisions depend on the salesperson's ability to teach them something new or challenge their thinking. Good sales reps know that insight is the quality that buyers value most highly in a supplier, allowing them to deliver information and ideas to help their customers be more competitive and save money. It is common knowledge that sales reps who are motivated to sell generate more sales.
3. Mobility management. Taking orders on mobile devices, especially tablets, is a growing trend. The advantages are obvious. At the same time, the BYOD (bring your own device) trend means that small business managers are facing more variety and complexity in their sales team's devices, and therefore the platform they use must be operating system–agnostic.
4. User friendliness. Online sales solutions can be very complex, and buyers are reluctant to learn to use them and order independently. The frustration is compounded by the fact that each supplier has its own software system, and buyers don't have the time or patience to learn how to use multiple solutions. A step in the right direction is to offer a user experience tailored for each specific industry.
5. Push, not pull. Catalog changes are often seasonal. Buyers need to be informed and walked through new offerings. A buyer who overlooks the latest trends can "miss" a complete season. Furthermore, small business buyers are not always aware of the fast movers and which products are expected to achieve best market traction. Especially in fast-moving sectors, such as food, buyers need to be aware of all the new offerings, which, without such guidance, would be virtually impossible to find among the thousands of items they purchase.
So, for the foreseeable future, sales reps will remain central to the purchasing process. Instead of becoming a "blast from the past," their importance is ever-increasing. At the same time, the tools of their trade have undergone a dramatic transformation: from outdated, cumbersome catalogs and bags of samples to sophisticated user-friendly mobile solutions. Given this, it should come as no surprise, according to the Economic Policy Journal, that Facebook's number one hiring category is in sales.
Ofer Yourvexel is CEO of WRNTY Ltd., a provider of mobile sales apps for catalog and order taking. His management experience spans the global high-tech and retail sectors.
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