B2B ecommerce is estimated to rise from $889 billion in 2017 to nearly $1.2 trillion by 2021 in the United States, according to a study released this week from Forrester Research.
Behind the uptick, per the report, is the preference and ease for researching and buying online. Forrester Analyst Andy Hoar, who led the research, suggests that B2B buyer behavior continues to change.
The revised report, titled US B2B eCommerce Will Hit $1.2 Trillion By 2021, shows a slight shift in the amount generated by B2B ecommerce through distribution and direct channels. "What's $100 billion amongst friends," he said, noting a move toward digital to discover and research products, as well as make purchases online. Some purchases are being made with credit cards.
At electronic components distributor Premier Farnell about 30% of the online purchases are through credit cards, Hoar said, citing the distributor's VP or ecommerce in the U.S.
Hoar acknowledges an opportunity for distributors and brands to reach B2B buyers through search advertising, display and video, but the reports doesn't make mention of the possibility.
Forrester analysts forecast a compound annual growth rate (CAGR) of 7.4% in B2B eCommerce during the next four years. The report defines the potential of the U.S. B2B eCommerce space.
Hoar sees a channel shift from offline to online, calling it the consumerization of B2B. The estimated $1.2 trillion -- about 13% of all B2B commerce --doesn't include people talking to sales reps or buyers going to sales locations. Some 87% remains offline, which provides another $8.9 trillion in untouched opportunity. "Unlike online B2C, in B2B you don't need to try on ball bearings or touch an electronic capacitor," he said. "You just order the products over the phone or online."
B2C gets all the attention, but B2B online buying has stronger possibilities for growth. Hoar estimates the ceiling of B2B buying online as being much higher than B2C. In 10 years he believes the majority of consumers will still make purchases in stores, but more B2B buying will move online. "I've told people, unofficially, that by the year 2030, B2B ecommerce could be 30% to 40% of all B2B commerce," he said.
Interestingly, 64% of B2B buyers will research at least half of their work purchases online. Some 38% of today’s B2B buyers complete at least half of their work purchases online. With that percentage increasing to 55% by 2020, B2B sellers will see a significant volume of offline business move online in the next few years, according to Forrester/Internet retailer Q1 2017 global B2B Buy-side online survey.
While drugs and druggist sundries and petroleum products represent the largest categories today, climbing at a 17% of total online sales by 2021, the fastest-growing segments as measured by share include durable goods categories. Those include motor vehicle and motor vehicle parts and supplies; electrical and electronic goods; and machinery, equipment, and supplies. The report states that these trends continue despite the growth in B2B sales of non-durable goods such as grocery and apparel.