It’s no secret that B2B remains mired in paper, pen and even fax machines. And indeed, when it comes to commerce between companies, B2B could use a push to streamline transactions between firms as they deliver goods and services to one another on an increasingly global scale.
To that end, Magento said last month that it would add several new features to its commerce platform. Magento Digital Commerce Cloud for B2B focuses on the middle market, with an eye on corporate account management, inventory and order management and catalog information and flexible payment options, including credit payments.
In an interview with PYMNTS’ Karen Webster, Mark Lavelle, CEO of Magento Commerce, stated that the company has been boosting staff and its global presence in anticipation of high demand for cloud services, and Magento’s cloud business could be more than half the company’s business within a short period of time.
“Everybody wants digital commerce technology software right now,” he said, adding that the demand extends across several businesses, industries and verticals, with the commonality that they are digitizing “either for the first time or the second time.”
Demand has been emerging in an especially strong manner for B2B, said Lavelle, as companies are “either … re-platforming or they are getting vertical for the first time.” For Magento, the impact has been notable, said Lavell: 30 percent of new sales have going to B2B as recently as 18 months ago.
The Magento Digital Commerce Cloud for B2B, said the executive, took shape as firms have found they need apps and mobile functionality to conduct business in a manner reminiscent of B2C and the intuitive processes that are a part of that arena.
The B2B offering from Magento, he stated, has been a natural outgrowth of the B2C module, customized for corporate workflow, from purchase orders to invoicing to payments to catalogs.
But for B2B, processes are “clunky,” as they are still mired in routine or paper-based processes. “Unlike B2C,” he said, “B2B tends to be as varied as the companies that participate.” There is less standardization within B2B (and standardization, he said, is where Magento’s strength lies), and one advantage of the Magento offering is that certain activities, such as purchase ordering, are streamlined “out of the box.”
Queried by Webster as to payments, Lavelle said that firms might be loath to put, say, transactions for the delivery of goods on Mastercard or Visa accounts, while Lavelle said that the platform allows for the implementation of wire transfers or pre-established credentials to conduct business on credit, which does help control the risk inherent in payments. Current clients “are eliminating the paper and the phone call” but maintaining the ability to order on credit, with net 30 terms, for example, capitalizing on the efficiencies of streamlined validation and approval according to each B2B relationship.
The enhancements to everyday business tasks, as they are done digitally, can be felt across firms of all stripes and sizes, stated Lavelle.
He offered the example of a mom and pop ski shop operating in Telluride, where upon logging onto a site powered by Magento’s software, the business owner could see, in one place, his or her orders all pre-established with credentials shared by suppliers. Such direct, two-way communication can ensure that inventory flow — and payments — can operate with speed and efficiency, even if they are a seasonal mom and pop business and off the beaten track.
The landscape for B2B services is one where SAP Ariba and InSite also have competing B2B offerings, said Lavelle, as several firms vie to bring some commerce functionality to market, and yet “we haven’t met any of them head-to-head … the market is just vast, and we are super excited from what we see from that standpoint.”
Looking out at the rest of the year, Lavelle noted the firm’s commercial presence in areas such as India, Hong Kong, Singapore, China and Japan, with additional prospects for making inroads into B2B amid what he said globally is “a very exciting time.”