Changes in consumer behavior and technology advances have transformed business-to-business (B2B) online marketplaces from being just a place for merchants to list their products and services, to become platforms that efficiently optimize merchandising, pricing and inventory information.
Andy Hoar, senior analyst for business and channel strategy at Forrester Research, noted that technology developments and the scale of use among merchants have also increased dramatically, thus, allowing more companies to effectively optimize their merchandise, pricing lists and inventory of products and services.
"Whereas merchants in the early days of B2B marketplaces used [these platforms] as glorified listing services, they can now envelop products and services with deeply personalized and social media-based content, dynamically vary pricing and offers, and link to inventory control and service metering systems in real-time," the analyst told ZDNet Asia.
Hoar pointed to the emergence of new social, media-savvy Web 2.0 marketplaces such as TradeKey.
Devashish Saxena, senior vice president and regional marketing director of Asia-Pacific at element14, agreed. He said the drivers impacting business-to-consumer (B2C) marketplaces are also spurring the evolution of online B2B markets. element14 is the Asia-Pacific brandname for Premier Farnell--a multichannel, high-service distributor that supports engineers and purchasing professionals, according to its Web site.
Saxena said the Web has evolved from an information channel to a transactional platform, and now to a social channel, becoming the key driver in how customers connect and transact with a brand as well as connect with each other to shape their purchasing decisions.
As such, he noted that the B2B label is "often misrepresented" because from a marketing and online perspective, it is trying to connect and influence an individual even though the commercial relationship is with another business.
"In fact, we sometimes refer ourselves as being in the business-to-engineer market to remind us of this important fact," he said.
Saxena added that social connections play a large role in influencing individuals' purchasing decisions, from brand preferences to personal interests. As such, element14 pays close attention to how these online behaviors are evolving among its target audience, including understanding what information they need at each step and how it can facilitate the decision and buying processes, he stated.
Engaging in "frictionless commerce"
According to Hoar, B2B online marketplaces bring together thousands of buyers and sellers, which is more than individual companies can source on their own or when partnering with each other. Additionally, since these marketplaces are online and "virtual", operators need not bother about geographical boundaries, too, he added.
Furthermore, customers need not engage with other people during the purchasing process and the marketplaces do not shut down based on office hours, but are available any time, any day, the analyst noted. This, he added, provides "frictionless commerce" for one-stop shopping purposes.
Clement Goh, managing director at networks and data center platform operator, Equinix, added that today's B2B marketplaces "make the world smaller" and provide easier access to different services and products. They also allow operators to provide localized services and offer merchants a quick time-to-market option, he explained in a phone interview.
Goh also pointed out that while the primary principles of online marketplaces remain the same, transactions have become safer and communication has improved with technological advances.
That said, Hoar highlighted the cons of online marketplaces such as higher levels of price and purchasing transparency which continue to keep some companies away.
The analyst explained that for companies that engage in extensive price negotiation as a sales closing tactic, such marketplaces largely neutralize that option because the market price is publicly known to buyers.
Potential business customers would also not want their rivals to know what they are buying and from which vendor, he elaborated.