The Future of B2B Commerce: Trends to Watch

In the recent Driven by DCKAP podcast episode, Karthik Chidambaram, CEO of DCKAP talked with Mark Brohan, Senior Vice President of B2B and Market Research at Digital Commerce 360, they explored some significant trends shaping the future of B2B commerce over the next decade. 

Mark Brohan is a key leader in B2B commerce, serving as the Senior Vice President of B2B and Market Research at Digital Commerce 360. With a strong background in journalism, he uses his storytelling skills to analyze industry trends and share valuable insights. At Digital Commerce 360, a leader in e-commerce research, Mark helps businesses understand the complexities of online sales. His dedication to research and understanding customer needs makes him a great resource for companies looking to improve their digital strategies.

So, Here’s what they discussed.

The Landscape of Consolidation

One major trend Mark highlighted is the ongoing consolidation in the distribution industry, particularly among midsize and smaller players. He observed, “You will see a lot of consolidation to come within… the midsize to smaller distribution industry.” The pressures on these businesses to remain small and family-owned are increasing, making it challenging to sustain operations without evolving. As a result, we can expect the industry to see larger companies absorbing smaller ones, leading to a more concentrated market.

This consolidation will not only affect market dynamics but also influence how businesses operate. The larger entities will have more resources and capabilities to innovate and adapt to the changing needs of their customers.

The Rise of Digital Sales

Mark pointed out a critical shift in the way B2B sales are conducted, especially regarding digital channels. Currently, only about 15% of all B2B sales are made through purely e-commerce platforms like websites and mobile apps. However, he noted that this number has grown significantly from 8-10% during the early days of the pandemic. He stated, “Next four or five-six years, you’re going to see that approaching 25 percent because today you’re going to see digital sales all across the board.”

As the younger, more digitally-driven buyers enter the market, they expect seamless digital experiences. This means businesses need to enhance their digital strategies and consider omnichannel approaches to meet the evolving demands of their customers.

The Power of Marketplaces

Another fascinating point Mark raised is the rapid growth of B2B marketplaces. He mentioned, “I have never seen a faster growing e-commerce channel in all my years of covering any kind of something digital than these B2B marketplaces.” These platforms are no longer just niche players; they are becoming mainstream channels for B2B transactions.

The allure of marketplaces lies in their ability to offer a broader range of products and services, often with integrated financing options. Buyers today want choices, and marketplaces can provide a wider selection than individual distribution companies. Mark emphasized, “Distribution companies need to integrate with marketplaces and figure out the strategy for that.” Failing to do so could leave companies behind in an increasingly competitive landscape.

Navigating Last-Mile Logistics

As e-commerce continues to grow, the challenge of last-mile logistics becomes more pronounced. Mark pointed out that many manufacturers still struggle with this aspect of distribution. He explained, “That anywhere, anytime buyer means it, they want it anywhere.” Customers expect transparency throughout the entire purchasing process, from order placement to delivery.

The B2C sector has spent decades refining last-mile logistics, and B2B companies must catch up. Integrating logistics with customer service and ensuring transparent pricing will be crucial for businesses looking to thrive in this environment. As Mark noted, “A lot of companies are still trying to change and shift the battleship around” to adapt to these new demands.

The Role of AI in Manufacturing

An exciting aspect of the discussion was the role of artificial intelligence (AI) in the future of manufacturing. Mark shared insights on how AI is transforming processes, particularly by reducing the need for human intervention. He mentioned, “If you look at one of the areas where AI will come into play on the manufacturing side, it’ll be how to figure out how to take the human element out of manufacturing.”

While this may sound futuristic, the reality is that automation is becoming increasingly prevalent in manufacturing environments. As processes become more automated, businesses will need to adapt their strategies to leverage these advancements effectively.