Businesses are changing. They are losing weight, moving quicker and thinking smarter. Nowhere is this more evident than in the way they are trading with each other.
We all know how the internet has changed the way consumers shop, but the great untold story is that of the B2B e-commerce market which already dwarfs online shopping and is set to reach $6.7 trillion by 2020.
Alibaba, the Chinese e-commerce giant, is already bigger than the combined forces of Amazon and Ebay with revenues of $27 billion on B2B sales. At blur, where we deal with the more complex end of B2B e-commerce - services rather than products – we are seeing growth figures of 100%. It’s a massive market and one of the most exciting places to be over the next decade as more businesses think the unthinkable and move to trading online with each other.
So why are businesses having a change of heart, and embracing the digital revolution with such gusto? Well, it’s partly to do with traditions and decision making processes and partly because it’s impossible to resist the huge tides of technological change sweeping the planet.
No business can act as quickly as an individual. A decision to buy a PC can be made in a few minutes within the family, but the same decision can often take weeks in a business because of the complex web of authorisation and protocols. This reticence is even more pronounced in the business services sector where finding a supplier can take months of research, pitches and meetings. Then bang! The recession hit and businesses were forced to rethink their modus operandi just to survive.
We know from our own recent research that the appetite for change has never been stronger. Over 60% plan to invest more in automation and technology to help improve efficiency and productivity.
Firms like the taxi app business Uber and electric car company Tesla have torn up the rule book and are delivering staggering commercial performances through their explosive cocktail of human talent and awesome machine power.
At blur, we have seen some significant changes in attitude towards transacting in a virtual space. The entire business services industry used to run on the philosophy of “it’s not what you know, it’s who you know”. We have smashed that myth and rewritten many of the old rules. For example, we’ve learned that:
You don’t need a personal recommendation to find a good supplier. Almost all of our transactions are between complete strangers.
- You don’t need to meet your supplier. Around 70% of all relationships are conducted exclusively online.
- You don’t have to be located in the same area as your supplier. Only about 10% of relationships are local.
- It doesn’t take months to find a new supplier. The vast majority of our customers sign contracts with their new supplier within two weeks.
Yes, consumers have been doing this for ages, but believe me, this is radical news for the business market.
Albert Einstein once said: “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.”
That thinking is now changing and our world will change as a result. The challenge we all face in business is to climb up on top of that wave of change before it knocks us off our feet. Having come from the family that created the paper diary empire Letts, I know the risk of just watching as the tide comes in.