Digital marketplaces: Examples, benefits, strategies
Digital marketplaces are growing fast. Here's everything you need to know about digital marketplaces, including examples, benefits, and strategies for jumping on the bandwagon.
B2B marketplaces are rapidly gaining traction. Their numbers have tripled in Germany since 2015. Nonetheless, many wholesalers have struggled to adapt. Some are reluctant to change their ways. But wholesale marketplaces are the future, whether they like it or not.
Without question, the pandemic accelerated digitalization of sales processes in the B2B segment. According to the latest B2BEST barometer from ECC Cologne and Creditreform, their online shops are now the most widely used sales channels for wholesalers. In addition, the industry is becoming increasingly interested in electronic marketplaces.
After all, the fight for business customers is getting tougher. Major players like Amazon Business, Mercateo, and WUCATO are intensifying their efforts to woo this lucrative clientele. Nearly half (46%) of the wholesalers and manufacturers surveyed for the B2BEST study already consider such trading platforms to be their main competitors today.
Wholesaler marketplaces: Meeting customer needs
This makes it all the more surprising that many wholesalers are still reluctant to use digital and platform-based channels for their business. Instead, they prefer to consolidate their customer structure and continue to use classic sales formats like telephone sales and written orders.
According to experts, one reason for this is the fairly stable economic situation of wholesalers. Another is the fear that B2B marketplaces could endanger the exclusivity of their customer relationships and, most importantly, make it more difficult to sell complex products.
André Schwarz, Vice President of the Federation of German Wholesale, Foreign Trade and Services (BGA e.V.), has a different view, however. Studies have shown that even in the area of complex technical products, around one-third are already sold over online channels. But he adds a caveat: “Nevertheless, a B2B marketplace is surely not a one-size-fits-all solution – and not automatically the right sales channel for every company.”
At the same time, we can’t ignore the fact that business customers are increasingly ordering the goods they need over B2B marketplaces – due not least to their massive product range and straightforward ordering processes.
This makes it all the more important that wholesalers develop marketplace strategies to fit their customers’ needs.
Gen Z helps drive B2B marketplace trend
If wholesalers want to remain relevant, they need to step up their digital sales channels. The fact is, younger generations prefer click-to-shop, even at work.
“The digital positioning of wholesalers has to go beyond baby steps,” says the Cologne Institute for Trade Research (IFH) in a study on platform economics. It’s the only way that wholesalers can continue to pursue digitalization without sacrificing proximity to their customers in the medium term.
One thing is clear: B2B marketplaces already enjoy great popularity, especially among Millennial and Gen Z buyers. Wholesale marketplaces make it simple to order a wide variety of products in one go, making procurement processes faster and more efficient. This is a real plus, especially when simple products like C-parts and spare parts are involved.
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How wholesalers can capture marketplace opportunities
The IFH has observed two primary approaches to this topic at a global level:- The offensive approach: Wholesalers tackle industry challenges using existing resources and deploy their expertise in a new, different way.
- The defensive approach, in which stragglers have to react to competitive threats to protect their market shares and margins.
“Currently, wholesalers in Germany still have an ideal position to take an offensive stance: Companies with extensive networks can seize the opportunity to turn themselves into B2B marketplaces and be early adopters in the GAS region,” the trade research team wrote.
At the same time, field sales have to wean itself from transaction-based sales and evolve into a role as consultant, expert, and solution provider for the offerings of their own marketplaces – with a focus on service, according to the study.
