B2B Payments

US B2B eCommerce To Hit $1.13T In 2020

B2B eCommerce in the U.S. will top $1.1 trillion in revenue by 2020, making it more than 12 percent of all U.S. B2B sales, according to a new report by Forrester Research.

The report, US B2B eCommerce Forecast: 2015 to 2020, also forecasts that U.S. B2B online sales will hit $780 billion this year, and make up 9.3 percent of total U.S. B2B sales, and projects a 7.7 percent compound annual growth rate over the next five years.

“There are two types of B2B buyers,” Forrester principal analyst Andy Hoar told Advertising Age. “You have empowered end users who buy their own travel, printer toner for their home office, etc., and charge it back to the company. Then you have professional buyers — procurement buyers — who are buying in mass. The professional buyers are using e-procurement systems from companies like SAP and Ariba, and they have gotten better.”

According to Hoar, who wrote the Forrester report, 74 percent of B2B buyers now research at least half of their work purchases online, and 30 percent complete at least half of those purchases online — and that will nearly double to 56 percent by 2017. The biggest driver for B2B sellers is a dramatic reduction in cost, with an incremental cost online sometimes as low as pennies per sale, compared with tens or hundreds of dollars offline because of sales commissions.

Another factor: 56 percent of B2B eCommerce executives in a 2013 Forrester report said they can make a profit on some customers online. And on the other end of the valued-customer spectrum, 60 percent of B2B sellers said omnichannel buyers spend more overall, and are more likely to become repeat and long-term customers, according to the new report.

That’s true of small-business B2B buyers too, according to a separate report last week that found 75 percent of B2B printer-ink buyers shop online, but 58 percent still prefer in-store purchases.

The top industries for B2B eCommerce are — and will continue in the near future to be — petroleum and pharmaceuticals, with electronics being a fast-growing segment, according to Hoar’s report.

“The way in which people buy medical supplies has changed,” Hoar told Ad Age. “A lot of these purchases have to be tracked closely for reporting purposes, so there has been a mass migration from a paper- or fax- or home-based ordering system in the pharmaceutical industry to a trackable electronic ordering system.”

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