The Evolution of Retail: Why Brands Must Deliver a Digital Purchasing Experience to Retailers

Only a few years ago, retail was considered an old-school industry, resistant to the digital revolution sweeping through other sectors. Retail buyers preferred making transactions with brands through traditional methods over online transactions - hesitant to embrace the unfamiliar world of digital purchasing. These traditional methods included picking up the phone and calling a brand sales rep or sending an order form directly to a retail buyer for them to fill it out. This cumbersome process is tedious, labor intensive and can lead to all sorts of errors (related to invoicing or entering an incorrect order for example). 

However, the COVID pandemic accelerated the adoption of ecommerce by 10 years in only three months. And as more and more people began shopping online, retailers' preferences also began to shift. They became accustomed to buying the goods for their stores online, rather than the “old-school” methods that they had historically leveraged. Combine this with the fact that many “old-school” retail buyers have retired and millennials and Gen Z buyers have replaced them, it’s safe to say a new wave of retail buying is upon us.

“Today, millennials are involved in an estimated 73% of B2B buying decisions.”

Up until this point in time, there has not been much innovation with the “B2B retail world.” However, it’s quickly becoming clear that brands that are not delivering their retailers a seamless digital experience run the risk of losing them. Customers (in this case, the retailers) are used to online shopping experiences as individual customers and brands must meet the needs of their customers. 

In this article, we’ll talk through some of the research that has been done on what retailers want and then dive a bit deeper into the potential impact of brands that don’t conform to meet their retailers' needs.  

Changing Preferences of Retailers

It’s safe to say that retailers' preferences have significantly evolved. A remarkable 90% of B2B buyers now seek direct-to-consumer (DTC) style experiences from the vendors they purchase from online. But brands are struggling to keep up with this preference shift as only 46% of B2B purchases are currently completed online, showing the gap that exists in the market today. 

So what exactly is the “DTC-style” experience that they are looking for? Think about all of the aspects of an ecommerce transaction that make it so easy to buy from a brand:

• A simple checkout

• An incentive to make another purchase (like a coupon or a gift with purchase)

• The ability to earn loyalty credits 

• Personalized messaging and recommendations of what to buy based on your previous purchase history

A retailer (buyer) is used to these characteristics when they are shopping as individual customers and, thus, they are now expecting them from the brands that they are purchasing from to stock their retail stores. Most retail buyers have grown up shopping online at this point, so any brand that does not meet their expectations in this regard faces potential consequences, as we will detail further below. 

The Importance of a Robust Online Experience

If you are a brand that is selling to retailers and you are skeptical that retailers actually want to make transactions online, we have the statistics to prove that if you don’t start offering retailers a “DTC-like” experience to buy from you, then you run the risk of losing business. As today, 52% of B2B buyers are frustrated with their current online buyer experience. Since this is a relatively new shift in buyer preferences, not a lot of innovation has occurred within this space, leaving open lots of room for improvements for brands to make. 

This frustration can spill over and have significant consequences to your business. Approximately 25% of wholesalers have switched vendors after just one negative online experience - showing the importance of delivering a seamless online experience to each and every transaction. Based on the conversations that we’ve had with brands selling to retailers, they tend to see between a 40-50% repeat purchase rate from retailers. So losing one retail customer could translate to thousands of dollars in lost revenue since retail orders have a significantly higher average order value than a typical order from your online store. 

“ 70% of B2B buyers prefer purchasing from a website over sourcing products through a sales representative.”

Further bringing to life the importance of delivering a strong online experience to buyers is the fact that 70% of B2B buyers prefer purchasing from a website over sourcing products through a sales representative. What used to be a relationship business is now shifting to one that is focused on speed and streamlining efforts. Most buyers have an endless list of daily to-do’s and they don’t have an hour to spend talking to a sales rep. They just want to order their items and be done with the transaction when it’s convenient for them. This is evidenced by the fact that 88% of B2B buyers favor a self-service customer portal that offers an Amazon-like experience, where they can manage their orders, track shipments, and access support independently. 

Flexibility matters to retailers. And the more that you can do to provide retailers with a strong online experience that gives them the freedom to order when they want, the more likely it will be that they will have a positive experience with your brand and come back to shop with you again. 

Looking to the Future

The future of B2B sales is undeniably digital. By 2025, it's projected that 80% of B2B sales interactions between suppliers and buyers will occur in digital channels. Brands that fail to adapt to this new reality risk losing valuable customers and falling behind their competitors that do. Buyers are clearly favoring speed and the ease of a transaction over the relationship that they have with a brand.

Embracing digital platforms not only meets the current demands of B2B buyers but also positions brands for future success as the digital transformation continues to unfold.

The shift towards a digital purchasing experience for retailers is not just a trend—it's a fundamental change in how business is conducted. Brands that invest in creating a seamless, engaging, and efficient online purchasing experience will not only satisfy their current retail partners but also attract new ones. In a world where Millennials and future generations dominate B2B buying decisions, the ability to offer a robust digital experience is crucial for long-term success. The “new” generations have grown up shopping online and they expect strong online experiences from the brands that they are buying from to stock their stores. 

If you’re interested in understanding how Vanik will be able to help make it easier for your retailers to place reorders with you, while earning valuable rewards, set-up time to talk with us.