COVID-19’s impact on business was immediate and continues to be unimaginable, closing retail stores and restaurants throughout the country, canceling events, affecting supply chains, and mandating company-wide work-from-home policies.
Wholesale vendors and retailers had to pivot their business plans seemingly overnight. Some scrambled to stand up e-commerce websites fast (the only channel largely unaffected – and growing – during the pandemic). In fact, McKinsey & Company reported how in just three months, e-commerce penetration in the U.S. market grew more quickly than it had in the last ten years combined.
Many refocused efforts on marketing. Giftbeat reported that 53% of independent gift stores have increased their marketing activity compared to this time last year.
Companies with existing e-commerce websites and online brand authority were better positioned to withstand the uncertainty, but the force of change and dissolution of traditional sales channels left many vendors questioning: should I expand into the consumer market and establish a consumer-focused go-to-market strategy?
Risks and Rewards of Adding B2C
Diving into the B2C or direct-to-consumer (D2C) space can be a huge opportunity – higher margins, expanded customer base, and diversification (fewer eggs in a single basket). Did we mention higher margins?
Risk and opportunity, however, frequently go hand-in-hand. Starting fresh in the B2C channel means establishing complicated marketing and distribution strategies, greater competition (potentially with your own customers), reduced brand recognition, heightened customer expectations, and warehousing and distribution changes to fulfill smaller orders.
Whereas your B2B goal could be to sell a $500 order minimum with a multi-month delivery date, your B2C goal is to take a single order, ship it expediently, and deliver it in perfect condition in an appealing, branded box, all while making a profit.
Of course, those wholesale vendors who’d considered adding a B2C line two or three years ago and didn’t, are really regretting it now. With insecurity abound across independent retailers, key accounts, and big-box stores, exploring B2C is a worthwhile exercise.
Adding a B2C channel means selling and marketing effectively to two distinct audiences: retailers and consumers. Pricing, shipping, order requirements, user expectations and overall go-to-market strategy differ for each group.
One of the critical decisions to make early-on is whether to have separate B2C and B2B websites or to add B2C functionality into your existing B2B website. Let’s compare pro’s and con’s of each. (You’ll also need distinct marketing strategies. Read our Marketing follow on here.)
Separate B2B and B2C Websites
In an ideal world, we recommend building a standalone B2C website, separate from your B2B site. By creating two distinct websites, you can easily apply business rules – like payment requirements, integrations with your back office, product visibility, order minimums, promotions and shipping options – without the complexity of layering two sets of requirements into one website.
Search engine optimization (SEO) is extremely important to get your brand in front of a B2C audience and is easier when you can direct targeted keywords to a single website. Effective SEO for both a B2B and B2C audience on a single website is possible, but you risk competing against yourself for search intent, unless you have a well-thought-out and solid strategy.
Additionally, marketing to the two audiences is easier. You can proactively personalize the customer journey and deploy separate merchandising strategies, tailoring content and imagery on the home page, interior pages, promotions, and products specific to the intended audience. Remember, you’re now dealing with two different “busy” seasons and product strategies.
For example, you can promote seasonal inventory stock-up to retailers in August and promote those same seasonal products directly to consumers in November. (Of course, it is possible to use dynamic content to show multiple personalized website experiences within a single page to distinct groups or personas, but this requires a more sophisticated website platform, like Episerver’s Digital Experience Platform.)
Everything from website analytics, automating marketing campaigns, and retargeting is easier when you can focus efforts on each distinct audience.
One Website, but Two Experiences
An alternative option is to add B2C functionality and requirements to an existing B2B website. This requires supporting different e-commerce experiences, however, and a firm grasp on requirements.
You must determine how to handle content/product visibility pre- and post-login, pre-login/guest checkout, different modes of credit card authorization, access to tracking information, and greater customer service/refund support.
While this can create complexity, it is perfectly possible and could be a strong way to start, if you are unsure how the market will react to your new venture.
Regardless of Your Website Strategy…
Whether you decide on one website or two, your product, marketing, and sales strategy will be different. On the B2B side, your goal might be to sell $2,000 orders, to fewer customers (and repeat), while your B2C goal is now to sell a $50 order to thousands of customers (and repeat).
You’ll likely categorize products differently to suit how each audience shops and offer different types of filters to aid product discovery, like “in-stock” or “closeout” for vendors, and “in-store pick up” or “deals under $10” for consumers.
Product recommendation engines must be trained to deliver tailored suggestions, quantities, and price points to each audience. You must establish Minimum Advertised Pricing (MAP), particularly if you also sell on marketplaces, and determine how best to feed orders to the ERP and CRM.
You’ll need to decide how you’ll segment your audience to direct the right people to the right website and develop separate strategic communication plans to promote both website releases.
A Bold B2C Strategy Means Planning
Are you ready to add B2C to your B2B business? When making this choice, identify requirements and interdependencies, and look for the simplest path forward for your business goals, strengths, and constraints. Focus your exploration on delivering the best possible customer experience without putting unnecessary stress on business operations.
Now that we’ve covered your e-commerce plan, let’s dive into the marketing strategies to plan for when adding B2C to your B2B business.
Want to explore this idea further? Get in touch to talk to a Whereoware digital expert.