B2B & B2C - Characteristics and differences
Characteristics of B2B in comparison to B2C
Higher switching costs when changing providers
Since a change of provider e.g. of software is more expensive, more complex and complicated for a company than for end users, customer loyalty in the B2B industry is significantly higher and business relationships usually last longer. In the B2C sector, on the other hand, the exchange costs are low and customers can quickly and easily find a new provider, e.g. a power provider.
More complex products
Products in the B2B sector are often not standardized and have to be individually adapted to the customer. Marketing and sales require a great deal of explanation due to a higher complexity. Products in the B2C sector, on the other hand, are typically standardized mass-produced goods and are purchased for private use without a detailed explanation, as the use is usually intuitive and simple.
Concrete requirements for the product
B2B customers have comprehensive knowledge of the industry in which they operate. Therefore, they have a good understanding of the requirements that products they purchase from B2B providers have to meet. Even if, for example, a fashion retailer is usually unfamiliar with fulfillment software, he knows very well what requirements it has to meet in order to represent a smooth process.
Longer and more extensive buying process
Buying decisions in the B2B sector are usually made by several employees – the so-called Buying Center. For example, if a company wants to implement a new software, the purchase decision is influenced by several people from different departments with different interests and needs. The entire process is complex, multi-stage and lengthy. In the B2C sector, on the other hand, customers make their purchase decisions spontaneously, independently and emotionally driven.
Challenges in the B2B sector
Higher competition in the market
As the B2B market is smaller compared to the B2C market, the competition between the suppliers on the market is higher.
Complicated supply chain
Supply chain management in eCommerce can be complicated. This is particularly the case where several partners are involved in the supply chain and all need access to the same information. Miscommunication at any point in the supply chain can slow down the process.
Tougher price negotiations
Because B2B buyers make large investments, they usually negotiate better prices, ask for discounts or demand additional services.
Challenges in the B2C sector
Broad customer group
In the B2C sector, it is much harder to define specific customer groups than in the B2B sector. Usually these can only be described approximately, for example by personas or customer profiles. However, in order to reach the largest possible group of consumers, the company’s communication channels should be as wide as possible.
Tougher price competition
In the B2C sector, prices and offers are usually recognizable and comparable for the customer at a glance. On the shelf of a supermarket, for example, several suppliers and products can be evaluated directly on site and an appropriate choice made. Especially for everyday products, the cheapest product usually wins here.
Emotions play a more important role
Since purchasing decisions in the B2C sector are often primarily driven by emotions, aspects such as the design of the product or the advertising are just as decisive factors as the product itself. For B2C companies, this means that customers need to be convinced on several levels.
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What means Fulfillment?
Fulfillment includes all activities and processes which, serve the supply or supply of the buyer by the seller or by a partner of the seller.
What means omnichannel?
Link all of the company’s on- and offline channels for an improved, consistent shopping experience