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Death of a Salesman: Is Technology Replacing Road Reps?

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When Zappos started selling shoes online in 1999, few would have predicted that by 2014 e-commerce sales would be worth $1.5 trillion worldwide or that the once-mighty American mall would be brought to its knees by a fall in foot traffic and shifting consumer shopping habits.

It’s not that hard to envision the wholesale marketplace following suit.

In fact, a recent Forrester Research report predicts that B2B e-commerce in the U.S. will hit $780 billion by the end of this year. (To put that in perspective, B2C e-commerce in the U.S. was only $304.9 billion last year, as per data from the Commerce Department).

Furthermore, Forrester claims B2B e-commerce will stretch to a whopping $1.1 trillion by 2020, representing 12.1% of all wholesale purchases, while another report, this time from research firm Frost & Sullivan, forecasts $1.9 trillion.

“It is clear that what e-commerce has done for B2C is what is in motion for B2B,” stated Vince Tsai, SVP and general manager for ShopTheFloor, UBM Advanstar’s digital marketplace that launched in 2013 to operate alongside the company’s fashion trade shows, including WWDMagic, FN Platform and Project in Las Vegas and Coterie, Sole Commerce and Children’s Club in New York. Powered by California-based tech company Balluun, ShopTheFloor bills itself as a trade show that never sleeps, where exhibiting brands have virtual booths that buyers can browse for potential business 24-7. “People have become more comfortable discovering and transacting digitally and in fact, they will demand it,” Tsai added.

Basically, buyers are consumers, too.

“They expect to have same type of experience as they do shopping on Amazon or Zappos on a Sunday night while watching Homeland,” echoed Joe Shohfi, CEO of Pop-Market, a veteran of the virtual showroom landscape. “It’s really about the convenience—they buy what they need, when they need it.”

Pop-Market’s patented technology, owned by Global Apparel Network, is used by trade shows (New York-based footwear show FFANY and Berlin’s Premium), retailers (including the three B’s: Bloomingdale’s, Barneys New York and Bergdorf Goodman) and brands (Woolrich, Hunter, 7 For All Mankind and Steve Madden, to name a few) to ensure every week is market week.

Other notable players in the B2B e-commerce arena include Brandboom, NuOrder, Joor and Monkey N Middle. While each tool differs slightly from the next, the overall premise is the same: the promise to nix friction from the wholesale experience by moving everything online so brands and retailers can connect in a more cost- and time-efficient way.

Instead of expensive trade show booths, printed line sheets and handwritten order forms, these services charge vendors a fee to place their collections online so retailers can shop for their stores much the same as they do for themselves. Custom assortments can be created for specific groups of buyers, and if a particular style has been tweaked or dropped, the line sheet is automatically updated for all to see. “There’s no such thing as versions floating around,” Shohfi said.

And as Tsai pointed out, sellers now have key data at their fingertips: which buyers are interested in their product, who they should reach out to and which products are generating the most interest. Moreover, instead of salespeople playing endless games of phone tag with buyers, checking in to see if and when e-mails with bulky file attachments went through, there are tools that track clicks in real time.

“Technology and the internet enable buyers and sellers from around the world to interact in a way that wasn’t nearly as easy and cost-effective as even 10 years ago,” he said, adding, “Sellers who want to use order-taking tools to digitize the order can have their transactions flow right into their backend ERP systems, making the selling process more efficient.”

It goes without saying that B2B e-commerce plays nicely with the new normal of open-to-buy and immediates. “Buying is very different today. Retailers now buy all year long. They don’t buy twice or four times a year and place orders on things that may no longer be on-trend when they ship,” Shohfi said. “It’s a different world. Retailers are keeping inventories down by trying to buy closer to season and as they need it.”

Tsai furthered this point: “Retailers must be able to respond quickly as new trends emerge. The ability to engage year-round with vendors is a critical part of their response strategy.”

Not to mention, most retailers, from mom-and-pops to multi-line department stores, don’t have the time or money to devote to multiple buying trips throughout the year. Likewise, it doesn’t make sense for some brands to have a presence at every show. But with online showrooms, “you can immediately connect and engage from wherever and whenever,” Tsai noted, adding, “As companies begin to interact with marketplaces and benefits from the ongoing relationships they build with their customers, the network effect will kick in: sellers will get in front of more buyers and buyers will discover and connect with more brands than ever before.”

And if small companies are worried about disappearing in the crowd on ShopTheFloor, he pointed out that it’s no different to how a buyer perusing the physical show might discover a new vendor. “Brands benefit by getting broad exposure to a large number of qualified retail buyers while buyers can discover and engage with brands that they might not have otherwise met,” he said.

Still not convinced? According to Forrester, B2B e-commerce sites have an average conversion rate of 7.3 percent, compared with 3 percent for consumer retail sites. Furthermore, wholesalers can cut costs by up to 90 percent by steering customers to a self-service wholesale portal.

Shohfi agreed: “It costs a lot of money to hire sales people and everything else and for $300 or $400 a month, a brand with a tool like ours can probably do more business with less outlays.”

So does that mean the end of the seasonal trade show circuit is on the horizon? Not quite. “Trade shows will continue to play a critical role in the wholesale process,” Tsai declared. “It’s an environment where buyers and sellers can interact, develop relationships and ‘touch and feel’ the product. “

He added, “The human and face-to-face interaction is clearly a key advantage to the trade show experience.”

According to Shohfi, traditional trade shows are evolving into networking events where buyers get together and work on future needs together with their brands. “If you think about the trade show, a lot of the value is the interaction between business partners,” Tsai said. And then, after the show, the conversation can continue online. “It’s like Facebook for wholesale fashion.”

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