In B2B commerce’s pursuit of the “Amazon-like” experience, both buyers and vendors have quickly discovered that business-to-business cannot take the same path that the business-to-consumer market did.
Navigating through a fragmented field of disparate platforms, systems and data requirements is among the largest challenges to B2B eCommerce adoption today. While there may be a platform perfectly designed for the needs of a vendor, it may not adhere to the unique needs of its customers. One corporate buyer may submit orders a different way than another. On the other hand, a retail buyer may have found the perfect buying platform that fits its own needs but fails to address what a vendor needs to receive orders.
Historically, whoever holds the market power has dictated which portals are used and how data is sent and received. That results in a small vendor with little market influence forced to on-board onto multiple platforms, implement an electronic data interchance (EDI) connection, and submit invoices differently depending on who placed the order. Similar friction exists when the buyer-side lacks market power, too.
According to Convictional Co-Founder and Chief Operating Officer Chris Grouchy, this is the crux of the problem of a lack of eCommerce technology adoption.
“Suppliers really struggle to get adoption from their buyers because the solution, while designed to make a supplier’s life easy, hasn‘t necessarily been used to make it easier for the buyer — or even incentivize them to use a new tool,” he told PYMNTS in a recent interview. “Why is this the case? What it comes down to is a lack of integration and automation on both sides of the transaction.”
Developing a single portal that addresses both buyer and supplier needs is not necessarily the silver bullet in this case, he explained, because businesses’ needs are so varied when it comes to how they send and receive documents, data and money. Instead, Grouchy said, application programming interface (API) technology can enable seamless integration of data within back-office systems and between the systems of two different businesses without forcing them into a particular solution.
API integrations can address a range of problems. Grouchy pointed to the internal challenge on the vendor side of lacking real-time visibility into inventory levels that potentially leads to a supplier listing product not actually in-stock, compromising the quality of the buyer experience.
Between businesses, APIs level the playing field of market power across buyers and suppliers, he added.
“It’s no longer a question of, ‘Who has market power?’” he explained. “It’s more a question of, ‘Now that everyone has equal market power, which vendor can service both sides of the transaction, and compel each side to want to work with the other?’ That’s the opportunity of APIs.”
The B2B space has made clear the difficulty of forcing behavior change within organizations. That resistance to change is behind ongoing use of paper checks, paper invoices, orders that are phoned-in or emailed to a supplier, and other outdated processes that waste time and money. So when a supplier requests that all buyers be on-boarded to a platform and change the way they submit orders, receive invoices, and submit payment, resistance to that request is almost guaranteed.
What APIs offer, Grouchy explained, is a way to automate and streamline data integrations between businesses without forcing either side to change behavior.
He noted that this ability will become even more important as businesses elevate and evolve their buying habits. In the retail world, for instance, Grouchy pointed to the rise of the drop shipping strategy, which enables a retailer to direct customer orders straight to a wholesaler or manufacturer rather than keeping product in-stock — a trend that will continue to place pressure on suppliers to have flexible systems that can receive and fulfill those orders correctly and quickly.
Vendors, too, are evolving the way they approach the B2B eCommerce space. An Amazon-like experience assumes that a supplier should on-board to Amazon Business or other leading marketplace platforms — this strategy can certainly aid in buyer-supplier discovery. However, Grouchy noted that suppliers are increasingly looking for ways to provide a better customer experience without being pitted against direct competitors, and without the marketplace operator cutting into their margins.
Other B2B eCommerce marketplaces themselves have an opportunity to compete with Amazon and address some of its larger points of friction, Grouchy said, most notably as they relate to the vendor on-boarding experience.
Buyers and suppliers both have their own needs for how they exchange purchase orders, invoices, payments and other data, while each also has their own desires for end-user experience. While market power has, in the past, dictated which experience will win over the other, Grouchy said API integrations allow buyers and suppliers to stick with the experiences and platforms they prefer without compromising a seamless flow of data between each other. And as buyer and seller behavior continues to evolve, demands for seamless data integration will continue to rise.
Convictional is approaching this space with the concept of the B2B Graph, the term it uses to describe the networks in which each node is a supplier and all its B2B customers.
“We can only build this B2B Graph by being able to integrate on both sides of the transaction, and by making it really easy for a supplier to sell to any kind of B2B customer regardless of the systems they’re using, or the ordering interfaces their customers prefer to use,” Grouchy explained.