B2X on the Rise: The Hybrid Buyer Decides

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Transformation from B2B2C to B2X seems inevitable in so many sectors, especially consumer goods. In the days of digitization, the end user drives the change. – A joint brainstorm with Albert Ortig and Stephan Lechner.

During the last two decades, digitization has swept across entire industries, leaving no stone unturned in exposed sectors. Elsewhere its impact was more moderate, just a refreshing breeze of innovation and pleasant efficiency gains through automation, in communication and administration. Which is why until recently classic B2B2C players saw little reason to rethink their practices. Field sales, wholesalers, distributors, partner businesses - those structures were here to stay. Or so it seemed.

End Users: the Unknown Variable

But these pillars have long begun to crumble, and the blame lies with the end user, a widely unknown variable in the minds of manufacturers with indirect market access. Until very recently, purchase decisions happened in the retailers´ outlets, and supporting those perfectly was the name of the game. Now we see qualified purchase advice slip behind the buyer´s preliminary web research in customer journeys. "In the past, you picked your trusted retailer first, and the product after. Nowadays, in two out of three cases, the process is reversed”, says Albert Ortig, Managing Director of Netural, about the current situation. "ROPO" - "Research Online, Purchase Offline", or "webrooming", is the technical term for this phenomenon.

"The last separation between e-commerce and classic commerce is in the minds of suppliers."

Zitat Stephan Lechner, Netural CTO

Up to now, most manufacturers accompany customer journeys with brand presences or product information on the web. "But modern, digital-minded consumers demand more," says Albert Ortig. Increasing automation, cross-linking of communication channels and globalized supply chains multiply their choices, while loyalty to brands and dealers is dwindling. The consumers´ focus is not limited to service, performance or price any more. They want it all - anytime, anywhere, transparent, flexible and with total convenience, a "Seamless Shopping", without any limits separating online and offline. New, "hybrid" buyers simply follow their momentary and contextual impulses, weighing all options, and ultimately choosing the most trustworthy promise of the best experience and value. "The last separation between e-commerce and classic retail is in the minds of suppliers", remarks Stephan Lechner, Netural´s co-managing director.

Holistic Concepts Make the Difference

Bad news for manufacturers: Half-hearted players who do not set up their product ranges for digital sampling, configuring and purchase will drop out of the “relevant set” when purchase decisions are made. Particularly at risk are sales through small, specialized retail structures. While leading retail chains score with their own digital strategies and take suppliers along, small players tend to sit on the fence and hope their in-store consulting skills will keep them alive. But important as physical in-store presence may still be in various fields, new digital services driven by artificial intelligence and mixed reality as key technologies will put traditional added value under increasing pressure. "Without a feasible, customer-focused digital strategy, dependence will grow," says Albert Ortig, “with underachievement as a medium term perspective and lost market shares as the long-term outcome."

Albert Ortig, CEO Netural and Roomle, entered a joint venture with the wood-based materials manufacturer Egger.

Yet, entering direct sales will present unfamiliar challenges, especially when existing distribution partners feel left out of the loop or even competed against. Their fear of losing sales to the manufacturer's digital flagship store should be taken seriously. "Such worries are refuted by countless examples, but involving all stakeholders in your strategic planning is essential if you want to create a real win-win-win." A shining real-life example is the Tyrolean wood-based materials manufacturer Egger who entered a joint Venture with the Netural spin-off Roomle last spring. From 2020 on it will enable end consumers to plan their individual furniture online and deliver the resulting orders to its worldwide network of local carpenters for subsequent assembly and installation, a concept involving and benefitting the entire value chain.

Adapt the Organization to the Task

In digitized environments, marketing needs to outgrow the traditional give-and-go between branding and product management. Successful transformations from B2B2C to B2X (or even B2E - "Business to everyone") require a realignment of the whole organization, and indeed of the entire corporate culture, with "agile" being the order of the day. Both strategic experience and practical e-commerce in terms of country-specific legal issues, store management, performance marketing, customer care and logistics are frequently not up to the task. Just setting up an online shop is no solution.
Generally speaking, becoming a digital player is a transformation that reaches far beyond mere technology issues. "Of course, processes need to be modeled on the software level, and functions will be determined by tools," says Stephan Lechner: "However, a consistent focus on user needs must be maintained under all circumstances." Also mind that more often than not, the full spectrum of user needs does not reveal itself before creating the application.

The Approach: Thinking and Act as an Innovator

"To avoid wasting years to prepare your entry only to stumble over misjudgments after a big-bang launch," adds Ortig, "take time find out how successful disrupters achieve speed and orientation." This may involve saying goodbye to thinking big and instead taking quick small proof-of-concept steps in selected regional markets – much like international eyewear manufacturer Silhouette, a customer of Netural, who launched an online shop last summer, for the Austrian market only, and only selling sunglasses. – Why? To meet realistic goals and to allow unpretentious learning, gathering as much data as possible to gain insights about acceptance and business potential and to make the necessary strategic or operational corrections before a final full-force rollout of what has proven to work.
Bisherige Investitionen in Marke und Produktqualität machen sich jedenfalls bezahlt. „In vielen Branchen, vor allem bei Konsumgütern, ist der Wandel von B2B2C zu B2X unausweichlich“, zeigt sich Albert Ortig überzeugt. „Was man als Tatsache, aber nicht als Bedrohung sehen darf. Es birgt für jeden Hersteller mehr Chancen als Risiken. Kaum ein österreichisches Unternehmen schöpft bislang offline sein gesamtes globales Potenzial aus. Online wird das möglich.“

Previous investments in brand and product quality have definitely paid off. "In many sectors, especially in consumer goods, the change from B2B2C to B2X is inevitable," says Albert Ortig with conviction. "Take this as a fact, not as a threat. For manufacturers, this change will bring more opportunities than risks. Hardly any Austrian company can exploit its full global potential offline. Online, they will. "


Article: Ernst Demmel / 17.10.2019

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