When we last addressed this subject about a year ago – we cast our hopeful eyes forward – and offered suggestions for “best practice” recommendations to help Building Product Brands manage growth in the online sales channel.
In reflection, perhaps we may have even understated the importance of this momentum opportunity.
Yes, the past year has brought even more growth in the online sales channel… than many could have predicted. And the ability to be agile and move at the speed of the realities of the ever-evolving building products channel has never been more critical.
It’s often claimed that if not measured… it didn’t happen. So consider this: based on a study by Vantage Market Research, online B2B sales now hold a value of $7.7 trillion annually. And according to Gartner, 80% of all B2B sales are expected to occur online by 2025.
Direct to Customer e-commerce is driving this growth. And the reason is simple – B2B and DTC shoppers – are the same people.
E-commerce has flattened buyer categories due to the wide scale adoption of online shopping by emerging audiences. And a majority of customers claim their loyalty may be open-for-renewal, with promotions and online marketing continuing to grow in importance.
Millennials and Gen Z make up 64% of today’s business buyers. These prospects have come to expect that their construction-related purchasing must be as seamless as their personal shopping experiences. For them, buying online is more than merely a transaction. Rather, the desire is for the experiences to be intuitive. Anticipating audience needs. And above all, easy.
Driven by this growing generational influence, the existence of online marketplaces has stirred a robust debate among suppliers. As the digital landscape continues to redefine traditional business models, the question looms large… are online marketplaces a looming threat? Or a golden opportunity for building material sales?
Navigating the Threats and Challenges for B2B Vendors
For B2B builder products manufacturers, the expanded opportunities of online marketplaces bring a unique set of challenges that cannot be simply ignored. One of the first opportunities… is navigating how to maintain a brand’s identity and differentiation. After all, as brands continue to enter and populate these digital marketplaces, each one risks the perception as a commoditized offering.
With little room for individuality.
Being overshadowed by competitors in the crowded marketplace.
And eroding unique value propositions… that have been carefully crafted over the years.
Perhaps most significant, is the potential disintermediation of B2B relationships. Traditionally, vendors have established direct connections with their buyers – fostering personalized relationships – and well-understood needs. With the intermediary role of online marketplaces, the risk of losing direct customer engagement rises significantly. This shift in dynamics ultimately may lead to a reduced ability to tailor offerings… potentially impacting customer satisfaction. And in turn, loyalty.
Moreover, the dependence on third-party platforms introduces a layer of uncertainty regarding data security and privacy. Transactions must entrust sensitive business information to these platforms… which elevate valid concerns about safeguarding proprietary data, intellectual property and trade secrets. As cyber threats become ever more sophisticated, ensuring the integrity of such data becomes paramount.
The Opportunity to Unlock Growth for B2B Suppliers
Contrary to the perceived threats, online marketplaces also present a vast landscape of opportunities for marketing to home builders and others in related industries. One of the key advantages lies in the expanded reach and exposure that these platforms offer. By joining online marketplaces, suppliers can tap into a wider geographical audience – breaking free from constraints and reaching potential buyers – beyond traditional networks.
What’s more, online marketplaces facilitate seamless entry into numerous, new markets. So distributed enterprises can struggle less with the complexities of expansion. Online platforms provide a gateway for suppliers to showcase their products or services on larger stages… without the need for expanding physical presences. This democratization of market access can be a game-changer for brands aiming to scale their operations.
The agility inherent in online marketplaces also empowers B2B suppliers to adapt quickly to changing market trends. The ability to analyze real-time data – and respond to customer feedback – enables Building Product Brands to fine-tune offerings swiftly.
Ensuring they continue to stay ahead of the curve.
This dynamic responsiveness positions businesses to not only survive… rather, to thrive in the steadily shifting landscape.
Striking a Balance: A Strategic Approach for B2B Stakeholders
As trade suppliers navigate the threats and opportunities presented by online marketplaces, adopting a strategic approach becomes all-the-more important. So, instead of viewing online platforms as an either/or proposition – it may be more valuable to explore hybrid models – that blend traditional methods with digital strategies.
Never lose sight of preserving an emphasis on brand differentiation. Consider online marketplaces as supplementary channels. Rather than relying solely on them. By maintaining a strong online presence – while preserving direct customer relationships – Building Product Brands can strike a balance that allows them to reap the benefits of digital exposure. Without sacrificing hard earned brand identity.
Often overlooked: collaboration and partnerships within the online marketplace ecosystem can mitigate potential threats. By strategically aligning with the right platforms and building symbiotic relationships, manufacturers can harness the collective power of the digital marketplace… while safeguarding their core business values.
Of course, there are genuine threats that loom large. Yet, at the same time, there are significant opportunities.
As the digital landscape continues to transform the way business is conducted… it’s wise to approach online marketplaces with a discerning eye. And recognize the potential pitfalls… while embracing the transformative possibilities they offer.
The key lies in striking a nuanced balance. Leveraging the strengths of both traditional and digital strategies. While ensuring sustainable growth in an ever-evolving marketplace.
As you’re considering new strategies in this new year, we’re here to help. Send an email to Steve at sk@kleberandassociates.com to get the conversation started.
