Human Relationships are at the Core of B2B commerce
Human Relationships are at the Core of B2B commerce.
Most products, and even services, in B2B commerce, are in the process of getting Commoditized.
At the outset, the above statements are radically opposite. So much so that one completely negates the other: A product getting commoditized meaning standardization to the extent that only transactional terms matter, not relationships, not vintage, not even Humans. While commodities lack a face, relying on human interactions raises entry barriers and gives every transaction a name.Yet the reality of B2B commerce in 21st century has evolved somewhere in between. While most B2B commerce remain old-school, conversation-driven and impacted by Business-to-Business relationships, the terms are slowly but surely getting commoditized. While certain factors, such as a lack of technology and the longevity in relationships, remain the same, there are fundamental shifts taking place at the core of B2B trade.
At the outset, the above statements are radically opposite. So much so that one completely negates the other: A product getting commoditized meaning standardization to the extent that only transactional terms matter, not relationships, not vintage, not even Humans. While commodities lack a face, relying on human interactions raises entry barriers and gives every transaction a name.
Yet the reality of B2B commerce in 21st century has evolved somewhere in between. While most B2B commerce remain old-school, conversation-driven and impacted by Business-to-Business relationships, the terms are slowly but surely getting commoditized. While certain factors, such as a lack of technology and the longevity in relationships, remain the same, there are fundamental shifts taking place at the core of B2B trade.
Business Buying is getting smarter and shrewder. With an increasing number of Suppliers & products available, Businesses now have many more options for Procurement. Businesses are now more flexible to try new sources, to cut costs, including Tech-based Suppliers. This is particularly true for products used for maintenance and repairs as well as raw materials. There is a propensity to prioritize transaction terms over human interactions to some extent.
With increasing competition, and reducing margins, B2B suppliers are now more sensitive to cost-cutting. Suppliers are fast adopting Digital means to target Business buyers and reduce cost on Account-based Marketing (ABM), etc. Credit, however, remains an important means of relationship-management.
While Covid has upended Businesses, it has been a boon for B2B commerce. The industry was in a vicious circle of Relationship Building -> Commerce -> Follow ups -> Repeat, Covid has nudged the whole ecosystem towards faster and leaner processes along with merit-driven selection. For e.g., the overall Credit in B2B sales has come down across the chain. For e.g.: from Polymer to Toothbrush to Dealers to Retailers, the average cycle has reduced from 150 days, to an average of 75 days Post-Covid.
Covid-induced lockdowns broke supply chains overnight and disrupted the traditional workflow of both: products like groceries, medical equipment, etc. as well as services, like education, consulting, etc. This forced Businesses to transform themselves in a short Turnaround time and make do with the new Business realities. There were a lot of trade-offs exercised and some years long-pending changes done in days and weeks.
With fundamental shifts in all sides of B2B Businesses, there are new Divisions and New Businesses coming up, in three areas:
a) Digitization of Supply Chain
b) End-to-end Intermediation
c) Marketplace Models.
And the old ones are getting replaced. There are 2 broader themes that are driving these trends: a) Cost-cutting b) Scalability
Both these themes are leading an Employment boom in B2B Commerce. There is a new rigor and interest amongst both Employers and Potential talent across the Board: Entry-level, and seasoned folks. Be it B-schools or engineering colleges, Job portals or social media hashtags, B2B Companies have an important seat in driving employment numbers. For e.g.: B-schools are not just packed with Investment Banks, and FMCG companies, but also B2B commerce companies. There is also a Huge lateral shift of Talent from B2C companies towards B2B: it’s truly a coming of age for B2B Commerce. There are 4 major areas of Employment generation within B2B Commerce:
With the increasing push towards Digitized Supply chains by Suppliers, and higher adoption of Procurement technologies by Business Buyers, there is a huge demand for Operations Professionals in B2B Commerce. With Suppliers going for more horizontal integrations across sourcing to payment, and Buyers moving towards smart Procurement strategies: Experience is being complemented, and sometimes replaced, by new Talent.
This is the biggest source of employment in the B2B commerce. Most companies are either developing in-house technology, or going for integrations with external tech partners. From commerce to e-commerce, the path towards Technology adoption is a certainty, for most B2B companies. This has been a trend since 2015, and Covid just tripled the speed and focus. With the pandemic and lockdowns, companies had no choice but to onboard smarter processes, to avoid disruption in sales and services.
c) Account Management:
With suppliers going for scale, demand for Account managers and Sales Development professionals has increased. There has been a major push to an otherwise already existing demand. Here, there continues to be a preference for Sales professionals and mostly serve as both entry points and also Mid-level management.
d) Business Ownership:
B2B Commerce companies and esp. Suppliers are decentralizing the Business profitability. The trend of dividing Businesses into Categories, regions and SKUs, and designating P&L owners to drive the mini businesses, has caught on like fire, across the industries. Business Owners mostly serve as mid-level management, with direct access to the Senior management. Being at P&L position attracts high demand from Ex-entrepreneurs and seasoned management professionals.
While most employment generation areas are either new-age careers or Covid-induced, they fit in very well with the Conventional functions of the Business: Sales, Operations, Marketing, etc, and not necessarily upending the traditional structures. B2B Employment boom is a result of some long pending transformations in the way commerce is conducted and it is here to stay. While B2B commerce is still years, if not decades behind, in technology and digitization, the growth path is fast and secure.