Setting new standards for B2B e-commerce

Sara Kronon , Marketplace Leader at IBM Consulting

Over the last three years, we’ve witnessed the ongoing expansion of marketplaces and platform ecosystems, and a recent IBM study showed that nearly two thirds of Millennials and Gen Z want to shop for products from multiple brands on a marketplace with a single checkout.

With a new generation of procurement and purchasing professionals mirroring these feelings, the deployment of digital marketplaces in the B2B sector is outpacing growth of those in the B2C sector. They have grown up with the likes of eBay, Amazon and Walmart fuelling what their purchasing journey looks like, and they expect it to work the same way in their work life.

According to data from Digital Commerce 360, five years ago there were just 75 B2B marketplaces; today there are more than 750 and they are expected to experience a compound annual growth rate of over 30% between 2020 and 2025. This sounds impressive, but these marketplaces remain in their infancy, currently accounting for less than 15% of all B2B online sales.

Lessons from Henry Schein

I was recently joined by Yan Tseytlin , Executive Director at Henry Schein , a global distributor of health care products and services, for a discussion on how the company set about deploying its new marketplace platform. I first asked him what role the company envisioned marketplaces playing in its overarching customer strategy.

“We started to consider how we could help our customers spend less time on purchasing and have more time to spend with their patients. We talked to our customers about their purchasing experience and that got us thinking about what the best strategy might be and what we needed to do to meet their needs.”

Meeting those needs was clearly going to have both financial and technological implications, as well as a change to the company’s operating model. I asked Yan how Henry Schein went about putting together all those different pillars and what key decisions needed to be made in order to move the project from ideation to reality.

“A lot of corporate projects start with a really solid business case, which for us included an assessment of the potential benefits, the costs and the risks of doing something, as well as the risk of doing nothing. Introducing a new way for our customers to purchase is absolutely non-trivial so I approached the business case in stages. One critical element was education, and that's something I think that people that get close to deploying a programme of this scale tend to overlook. You can’t assume that everyone is familiar with marketplace dynamics or industry trends.”

Ensuring the best outcomes

We all understand the power of marketplaces in our personal lives and the value they add in the end-to-end purchasing process. We use them to research, check out seamlessly and facilitate returns in a streamlined and uniform way. We understand the customer experience because we live it in many facets of our life – from retail to travel to healthcare.

However, being a marketplace operator requires the business to look under the hood and consider the mechanics of running a marketplace. While the customer experience is expected to be exceptional and on par with their current customers’ expectations, operators also need to consider seller experience as they are customers as well. They need to consider the operational impact of adding this new business model to their existing structure. Resourcing, governance, technology, marketing, legal and finance are all functions that need to be carefully considered and consulted. I asked Yan about the key stakeholders and functions he had to bring in on day one to help ensure the best outcomes.

“It's important to not try to eat the entire whale in one bite. Projects of our scale take a lot of time in large organisations. If we think about the implementation itself, and the various stakeholders, it can get overwhelming. It’s easy to forget about a critical team early in the process, which could derail the whole project, so I brought in all the teams from the start.

“For example, marketing were part of the process from the beginning, rather than waiting until we were ready to launch. These things are typically sequential, but I found making them parallel was a helpful way to bring people along. Also, things like marketplace KPIs came up early, and it's important to know that those could be fluid and could change over time as you see how the customers are interacting with the site.”

Moving from strategy to execution requires the right people and partners in the room. I asked Yan about how IBM supported the project.

“Having the idea of doing a marketplace, developing a strategy and thinking about the execution is a journey, and it's really important to have a strategic partner come along who you can collaborate with. Working with IBM was incredibly helpful, especially around foundational operational, commercial, and technical expertise.”

As we approach NRF 2025, I’m eager to see how marketplaces shape discussions at the show. Visit IBM at booth # 4639 if you’re interested in finding out more and in the meantime, watch the LinkedIn Live session with Henry Schein here.