Closing the Gap: Digital Leadership in B2B eCommerce

ONLINE

The B2B Online Benchmarking Study

2

Executive Summary.............................................................................................2

Key Findings ..........................................................................................................3

Research Analysis

The B2B industry is making slow but notable progress towards digital transformation ...................................................5

B2B companies consider online adoption among their customers as an important sign of omnichannel success ...................6

Most B2B companies expect that at least 31% of their customers will come from selling online within three years ...............6

The complexities of B2B poses the greatest challenges to delivering ideal omnichannel experiences ............................................... 7

Meeting customer priorities and acquiring sales depend on greater strategic use of content management and cloud technologies ......... 7

Omnichannel technologies and visibility are driving factors for growth ..........................................................................................................9

Rich content and enticing product details will contribute to the appeal of buying online. ..........................................10

Key Recommendations .................................................................................... 11

Appendices ..........................................................................................................12

Appendix A: Methodology ...............................................................................12

Appendix B: Who Responded to the Survey ...............................................12

Appendix C: Related Research .......................................................................12

Oracle ...................................................................................................................12

WBR Digital .........................................................................................................12

Executive Summary The B2B market has already made significant strides in the adoption of new sales channels, but business buyers have shifted to online research and purchasing more quickly than many vendors have been able to adapt. Oracle and B2B Online survey data suggests that 83% of companies are accelerating their own digital transformation because of its strategic value to core business operations and customer engagement.

Effective digital transformation for B2B eCommerce demands successful leveraging of technology and a responsive IT environment, one in which both technical teams and stakeholders collaborate to exploit technologies for business advantages. Cloud (SaaS) based ecommerce is transformative to both IT and line-of-business because of its benefits to both agility and the bottom line. Additionally, strategic use of content provides superior resources that help accelerate customer adoption of online buying. As B2B companies simultaneously engage with their customers on the eCommerce landscape, companies with these agile teams and solutions can respond to customers’ needs more effectively, providing them with distinct advantages over their competitors.

According to the survey data, 78% of companies identify B2B eCommerce as a critical component of this digital transformation; but while this is a strategic priority for some, many companies are only in the exploratory stages of development. This ‘execution gap’ is growing aggressively as competitive B2B companies invest in improvements to usability and online performance, registering clear advantages over companies who struggle to adapt.

B2B sellers in all stages of transformation intend to keep up with evolving customer expectations by providing user-friendly, omnichannel eCommerce experiences. Although 58% of survey respondents say 10% or less of their customers come from selling online today, 43% say that within three years, customers that come from selling online will increase to 50%. As B2B customers increasingly expect accessible, more responsive ways to research and buy products, only transformative eCommerce, cloud and web content management system (WCMS) adoption will enable B2B sellers to meet the demands of customers that are increasingly migrating to digital channels.

Table of Contents

3

Fast-tracking their digital transformation is a strategic priority for the vast majority of B2B companies on their path to digital leadership within their respective industries.For many companies, there is a gap between the ‘aspiration’ and ‘execution’ of digitally transformative strategies and technologies. While 83% of respondents agree that accelerating digital transformation is a strategic priority for their executives, only 14% strongly agree that they are moving towards this goal faster than their competitors. Although business buyers have moved or are moving online, many companies are struggling to balance the concerns of their sales organizations and distributors. Meanwhile, transformative companies are already offering buyers the online conveniences they expect.

B2B companies across manufacturing, distribution, retail, IT industries and more believe a greater percentage of online customers is an indicator of eCommerce success, more so than new customer acquisitions or even online revenue. Despite an extremely low percentage of customers coming from selling online today, B2B companies expect that a dramatic transition from offline to online purchasing has hastened the need for new technologies supporting relevant and industry-specific experiences across their online channels.

Complexity: the biggest obstacle to delivering the best possible omnichannel eCommerce experiences.In addition to respondents that identify the complexity of their business as their biggest obstacle, respondents claim both organizational and process challenges, as well as limitations of their existing eCommerce platforms and systems, as a close second and third, respectively. Each of these challenges—as well as a lack of back-office integrations, too much reliance on IT and amount of time required to deliver innovations—are complexities themselves, challenges that must be taken on to succeed in meeting the diverse demands of B2B sellers’ customers. To be sure, taking on this new buyers’ market requires a fundamental shift in the way technical, non-technical teams and stakeholders work together, and leverage technologies to achieve their omnichannel eCommerce objectives.

Today, buyers perform research and make their purchases online, as both their preferred starting point and sales channel, respectively. Online selling therefore represents a growing field of competition for B2B companies, with greater expectations among buyers for tailored, omnichannel experiences and visibility into product and order information. The technology supporting these offerings is now available to any B2B company, so distinguishing oneself in these areas has become an undeniable necessity.

Key Findings

4

Flash Findings

B2B companies must invest in new technologies to support the flexible, personalized omnichannel experiences.Despite technical hurdles and the complexities of B2B commerce, new developments in cloud technology can help B2B sellers meet their customers’ unique and diverse requirements. Buyers now demand a faster and easier buying process. As a result, some B2B companies have identified digital marketplaces like Amazon and Alibaba as strategically valuable channel partners, with 82% of respondents acknowledging that customer experiences on these sites surpass those of their own B2B websites. But for this reason, many B2B sellers see these marketplaces as margin-eroding competition, effectively setting the bar for digital experiences now expected by business buyers. In order to capture and retain today’s business buyer, B2B companies must offer a level of ease and convenience that equals or surpasses those of eCommerce giants such as Amazon.

Key Findings

49% 51% 82%of brands view online marketplaces (e.g. Amazon) as strategically valuable channel partners

of brands feel they are encroaching competitors

of brands say they online marketplaces have a better customer experience than their B2B site

Amazon – Friend, Foe, Gold Standard

“Omnichannel is very important to Ferguson and more importantly, our customers demand it. Our new B2B site is fully

optimized for desktop, tablet and mobile devices. The concept of “buy anytime, anywhere, and from any device” was

key for our customer base. From our interviews, it became very clear that our customers expect to be able to start

the shopping process on their laptop in the office and finish it on their mobile device at a job site. Mobile capabilities

especially, will continue to be an important area of focus and innovation for us.”

- Mike Brooks, Chief Marketing Officer, Ferguson

5

Research Analysis

The B2B industry is making slow but notable progress towards digital transformation.

While most B2B companies claim their digital transformation is underway, 43% of respondents are in either exploratory or strategic phases. Those who are already investing in and adopting new technologies—such as cloud and WCMS—to enhance the end-user experience will be in much stronger positions than their competitors. Regardless of what stage of digital transformation a company is in at present, all will push towards adoption at an increasing rate over the next three years, assumedly to avoid losing customers to their competitors.

Nonetheless, these companies are beginning to determine goals, identify opportunities for improvement, and define strategic roadmaps that include adoption of new digital measures for improved, omnichannel customer experiences on their websites. Determining goals and opportunities is a critical first step towards understanding, identifying and optimizing business technologies that will deliver satisfying experiences for their customers.

Still, 40% of B2B players do not believe their companies are shifting to digital more quickly than the competition. The fact remains that many companies are uncertain about which technologies they should be investing in.

Which stage of digital transformation is your business in?

Evaluate the following statements about the importance of B2B e-commerce/selling online to your company:

17% Stage 1: Exploring opportunities for digital transformation

26% Stage 2: Defining digital strategy development process

38% Stage 3: Building, testing, and launching digital capabilities

19% Stage 4: Optimizing digital and innovating ahead of the curve

B2B eCommerce is gradually becoming more important

Accelerating digital transformation is a strategic priority for our executives

B2B eCommerce is critical to our business advantage and results

My company wishes to be considered a leader in digital business within our markets/industry

My company is shifting to digital faster than our competitors

B2B eCommerce is a threat to our sales organization and distributors

Strongly Agree Somewhat Agree Unsure

Somewhat Disagree Strongly Disagree

50% 37% 1% 9% 3%

44% 39% 2% 12% 3%

44% 34% 4% 11% 7%

41% 31% 6% 17% 5%

14% 38% 8% 28% 12%

12% 24% 4% 22% 38%

“Using a modern SaaS eCommerce solution allows companies to accelerate their digital transformation, innovate faster,

and introduce new operating models that can better drive revenue and margin growth. Oracle has the only modern,

complete, and unified Customer Experience cloud suite on the market that helps organizations deliver a consistent

and personalized omnichannel experience across all channels and devices. With industry leading solutions across

commerce, content, marketing, service, sales, and customer data management, Oracle is uniquely positioned to help

organizations transform the customer experience and drive measurable results across every customer interaction.”

- Madhukar Kumar, VP, Cloud Product Business Group, Customer Experience (CX), Oracle

6

Research Analysis

B2B companies consider online adoption among their customers as an important sign of omnichannel success.

Most B2B companies expect that at least 31% of their customers will come from selling online within three years.

Almost half of B2B retailers identify the percentage of their customers who are buying online as the top indicator of eCommerce success—even more so than acquiring new customers.

Developing online capabilities that are more attractive to existing customers than their previous channels of choice lays the groundwork for future customer acquisition, as proof that companies’ digital transformation is successful—it converts its existing customers, those who arguably are more accustomed to a certain way of doing business.

In that regard, increased customer satisfaction drives more sales. Meeting their buyers’ expectations creates more customer loyalty, more opportunities for acquisitions and a more consistent revenue stream.

Although less than a quarter of respondents have 10% or less of their customers coming from selling online today, another 10% expect that, in three years, 31% or more of their customers will come from selling online, with 9% of respondents expecting at least half of their customers to come from selling online.

16% of B2B companies indicate they are either in the building, testing or launching stages of their digital capabilities, or are already ahead of the curve. These companies’ anticipated success is clearly supported by the emerging realization of their online potential.

What are your top most important indicators of B2B eCommerce success? (Respondents selected more than one answer)

% of customers buying online

New customer acquisition

Online revenue

Conversion rate

Customer retention

Lowering cost to serve customers

Average order value

Customer lifetime value

Average number of line items

49%

36%

47%

29%

43%

27%

37%

20%

4%

35%

1%

23%15%

12%

16%

5%

20%

3%

10%

8%

9%

5%

9%

3%7%

4%7%

2%

11%

What percentage of your customers come from selling online? What percentage do you expect within three years?

0-5%

6-10%

11-20%

21-30%

31-40%

41-50%

51-60%

61-70%

71-80%

Over 80%

Today In 3 Years

“The most successful B2B commerce leaders recognize that their customers are also consuming B2C websites in their “real lives”—and those websites set the bar (and an expectation) for any website with which they interact. In order to achieve a foothold in the online space, B2B companies have to find a way to weave the specific (and often, highly specialized) elements of their businesses with the best user experience expectations set by the B2C commerce landscape.“ - Chad Petersen,

Director, eCommerce, Carolina.com

7

Research Analysis

The complexities of B2B pose the greatest challenges to delivering ideal omnichannel eCommerce experiences.

While a 55% majority identified complex industry challenges as the top barrier to omnichannel development, B2B companies identified internal organizational and process challenges as a close second.

Complexity exists on both the buyer and seller side. B2B sellers need to reflect their customers’ complexity within their own internal operational complexity, and build omnichannel experiences that succeed in addressing all customer touchpoints. Complex customer needs necessitate a digital transformation because the existing technology on which the business is built cannot support the requirements of modern customer expectations.

In facing the demands of diverse customer buying behaviors, B2B players need to adapt their organization and internal processes to deliver on customer expectations, which may involve adoption and integration of new technologies, such as enterprise WCMS, cloud and eCommerce platforms. These technologies allow for simplified, manageable processes and the means to take on the complex challenges of B2B sales.

Which of the following are the biggest obstacles your organization faces to deliver the best possible omnichannel eCommerce experience? (Respondents selected more than one answer)

Complexity of our business

Organizational and process challenges

Limitations of current eCommerce platform and systems

Lack of integration with back office systems

Too much reliance on IT

Time required to deliver innovations

Other

55%

44%

40%

34%

33%

4%

27%

Meeting customer priorities and acquiring sales depend on greater strategic use of content management and cloud technologies.For B2B sellers, rich content should be an integrated component of the eCommerce platform and the digital experience. 64% of respondents stated that they wish to add more rich content and images such as video to their eCommerce experience; and make product listings clear, easier to find and more enticing. Superior content is critical, as it helps business buyers carry out their responsibilities more effectively, providing the information and insight they need to understand value in relation to their business. B2B sellers should make it easy for buyers to find the right information, and engage buyers with content that answers their questions, precisely and immediately.

Modern, integrated B2B eCommerce platforms

can help B2B companies delight their customers

by reducing complexity of the buying experience

and required IT infrastructure.

43%

40%

38%

38%

35%

34%

27%

27%

27%

22%

20%

16%

15%

15%

12%

12%

2%

Based on your online selling needs, which of the following technology initiatives are a top priority over the next 18 months? (Respondents selected more than one answer)

Content Management (CMS/WCMS)

Product Information/Content Management

Email Marketing

eCommerce Platform (upgrade or replacement)

Mobile/Responsive Design

Web site analytics

Onsite Search/Navigation

Quoting

A/B Testing

Multichannel integration

Order Management/Back End Integration

Recommendations

User Reviews

Merchandizing tools

Cross-Channel Customer Service

Product Configurator

Other

8

Research Analysis

71% of respondents believe cloud technologies will reduce costs and simplify IT, as well as facilitate innovation and digital transformation. Cloud technologies are desirable alternatives to on-premise solutions because of their scalability, flexibility and affordability. These qualities lend themselves to industries with varying requirements from customer to customer and evolving demands for specialized online tools and content.

As compelling as respondents find cloud technologies as a means of digital transformation, in terms of strategy, results were divisive—a substantial 39% percent do not view it yet as a strategic imperative.

Among 15 other technology initiatives, 43% of B2B companies identify content management as a top priority over the next 18 months in terms of their needs for online selling.

Web content management tools facilitate specialized intranet and extranet solutions that help companies both improve processes and target specific customer groups with special features, such as product configurator tools and advanced online search. In the same research group, among 15 other essential tools and capabilities, 55% of B2B companies identified advanced online search and navigation as absolutely necessary for their online business buyers to do their jobs.

What tools or capabilities do your online business buyers absolutely need to do their jobs? (Respondents selected more than one answer)

Advanced Onsite Search/Navigation

Multiple Payment Options/Terms

Custom Pricelists

Mobile Web/App

Purchase Order Payment

Single View of Inventory Across All Inventory Locations

Quote Submittal

Customer Account Management Organization Hierachies

Personalized Catalog Entitlements

Configurable Kits/Bundles

Social/Community Data (including ratings/reviews)

Purchase Lists

Recurring/Scheduled Orders

Role Administration

Delegated User Administration

Cost Centers

55%

47%

43%

33%

31%

28%

26%

23%

22%

21%

17%

16%

15%

14%

12%

10%

Please evaluate the following statements regarding your eCommerce cloud technology strategy:

We prefer eCommerce “private cloud” (i.e. within our corporate firewall) over a “public cloud”

Cloud technologies will facilitate innovation and digital transformation

Cloud technologies will help reduce costs and simplify IT

Moving our eCommerce platform to the cloud is a strategic imperative

Strongly Agree Somewhat Agree Unsure

Somewhat Disagree Strongly Disagree

33% 31% 19% 15% 2%

31% 41% 10% 12% 6%

28% 42% 13% 14% 3%

25% 24% 12% 19% 20%

“The core focus we encourage all our B2B clients to have when defining what the right Customer Experience should be, is to continuously go back to the question, ‘How can I make it easier for my customers to do business with me?’ Organizations that design their B2B solutions with the primary goal of helping their most valuable customers do their jobs better will automatically discover which site features and capabilities are going to attract additional high-value customers, drive more sales and incentivize customers to remain loyal. The underlying keys are identifying who your best customers are and understanding their specific needs.” - Asad Durrani,

Chairman & CEO, Aaxis Commerce

9

Research Analysis

Omnichannel technologies and visibility are driving factors for growth as customer expectations evolve, along with the increasing need for differentiation among competitors.Apart from respondents’ top three challenges, which are universal to business—competition, growth and profitability—B2B companies identify omnichannel experience management as their top business challenge over the next three years. Additionally, customers seek transparency into systems that can provide important information about inventory and customer orders.

nothing new—but they are occurring at a time when the methods for attracting, winning and retaining today’s business buyers are changing dramatically as a result of digital disruption. How B2B companies address the challenges of increased competition, sales growth and profitability, increasingly requires a successful digital business strategy and infrastructure.

Flash Findings

The top five business challenges organizations see over the next three years are: Increasing Competition, Sales Growth, Margins/Profitability, Omnichannel Experience Management, and Innovation]

Increasing Competition

Omnichannel Experience Management

Sales Growth

and Innovation

Margins/ Profitability

Currently, 28% of B2B companies identify a single view of inventory across all locations as a capability their online business buyers absolutely need to do their jobs. Yet, only 12% of respondents currently share inventory availability and location data from their ERP with their customers.

The top three challenges identified by respondents are

In order to grow and improve customer brand and customer product experiences over multiple channels, B2B sellers must align their strategies for addressing customer needs and new omnichannel technologies with the areas in which they seek to build business. That means navigating the complexities of their industries and identifying opportunities to establish a strong digital approach.

What part of your ERP do you currently expose to online customers?

Order Status

None

Inventory Availability and Location

Contracts/Terms and Conditions

Payments

Product Configurations

Invoices/Accounts Receivable

Other

Supply Chain

22%

22%

12%

10%

9%

8%

8%

6%

3%

10

Research Analysis

In addition to omnichannel, rich content and enticing product details will contribute to the appeal of buying online.B2B players must address complex customer demands by improving the customer experience with rich media content and more accessible information about their products online.

Content and commerce must be tightly integrated to deliver the type of online buying experience

business customers want. Product information must become more accessible as WCMS platforms support comprehensive videos, images, articles and demos that differentiate online from offline channels, contributing to B2B companies’ objectives of total online adoption among their customers.

In which of the following are ways you are looking to upgrade your ecommerce experience? (Respondents selected more than one answer)

Add more rich content and imagery such as video

Making product listings clearer, easier to find, and more enticing

Building out or improving mobile accessibility

Improving the overall user experience

Improving SEO and discoverability

Enabling audience segmentation and personalization

Better integration with our back-end systems

Improving product or service recommendations

Improving the quoting and ordering process flow/adding bulk orders

Modifying platform to serve multiple types of buying decision makers

Better integration with our customers’ back-end systems

Becoming more consistent across internation markets

64%

60%

64%

59%

63%

47%

62%

43%

34%

32%

26%

25%

11

Create a digital strategy with the following initiative at its center: adapt to B2B customers’ buying behaviors, and meet their needs at every touchpoint.Many B2B players do not know how to begin development of a digital strategy. Keep in mind that before any conversations about technologies, costs and workflow, all companies should commit to fully understanding their customers, and how transformation will make their lives better. What you learn will contribute to the technology decision-making process, and encourage the rest of your organization to ‘buy in,’ and provide more resources. Additionally, companies should identify several ways to measure the return on their digital investments. They might identify improvement opportunities based on what they learn from their customers, and their cash flow.

Adopt cloud and web content management technologies to facilitate digital transformation.In order to accelerate their transition into online selling, B2B companies must evaluate integrated digital experience cloud platforms as opposed to buying and connecting standalone components. Modern digital experience platforms that include commerce, rich content management, marketing, service, mobile, analytics, and integrations with back-office/ERP systems allow companies to focus on business success, and not technology alone.

B2B companies who successfully invest in and adopt new technologies to improve the end-user experience will be in a stronger position than their competitors. Cloud technologies are the facilitators of digital transformation; and the advanced online search, content, imagery and video features supported by WCMS should be an immediate priority for B2B companies in terms of engaging customers and aligning those technologies with line-of-business objectives. Cloud solutions have an easy entry point and they are scalable as the transformation strategy unfolds. These qualities lend themselves to an omnichannel eCommerce environment that continuously evolves to deliver tailored experiences to customers, increase adoption by existing customers and build a customer experience that drives new customer acquisitions and revenue.

Incorporate omnichannel capabilities that will set you apart from your competitors.B2B companies must directly address the complexities of their business, then evolve to operate an array of seamlessly integrated channels in order to build their unique customer base. According to Oracle, improving the user experience is nearly equal among the top four ways companies are looking to upgrade their eCommerce experiences—a group that also includes accessibility to mobile channels. But in omnichannel, all channels must operate alongside each other as they contribute to a seamless experience for the customer. Individual cloud and WCMS solutions can support growth in your application ecosystem, and the unique experiences B2B buyers have come to expect.

When reflecting on what these companies identify as their top challenges for the next three years—increasing competition, sales growth, margins/profitability and omnichannel experience management—B2B companies should ask themselves: which of these four items should be on the banner of our next big initiative?

Key Recommendations

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Appendices

Appendix A: Methodology

Appendix B: Related Research

Oracle

WBR Digital

The results analyzed in this report were gathered from responses to a digital survey delivered to an audience of B2B online executives. Interviews with sources were conducted after survey data was compiled, and centered on discussion of benchmark results.

With more than 420,000 customers and deployments in more than 145 countries, Oracle offers a comprehensive and fully integrated stack of cloud applications, platform services, and engineered systems. Part of Oracle Applications Cloud, Oracle CX Cloud Suite empowers organizations to improve experiences, enhance loyalty, differentiate their brands, and drive measurable results by creating consistent, connected, and personalized brand experiences across all channels and devices. Oracle Commerce for B2B, part of the CX Cloud Suite, is purpose-built to handle the complexities and scale of B2B while delivering consumer-like experiences that help business buyers do their job with ease, and make the buying process more personalized, and profitable. Learn more about Oracle Commerce for B2B: www.oracle.com/goto/b2b-ecommerce

WBR Digital connects solution providers to their target audiences with year-round online branding and engagement lead generation campaigns. We are a team of content specialists, marketers, and advisors with a passion for powerful marketing. We believe in demand generation with a creative twist. We believe in the power of content to engage audiences. And we believe in campaigns that deliver results.

What type of business do you represent?

49% Manufacturer

24% Distributer

10% Other

9% Retailers & Department Stores

7% Computer Systems & Data Processing Services

1% Healthcare & Biotechnology

What is your annual revenue?

Less than $25 million

$25 million to $100 million

$101 million to $250 million

$251 million to $1 billion

More than $1 billion

24%

11%

11%

12%

42%