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These Are the 5 Major Challenges to Global E-Commerce Growth

A new white paper from DHL Express and England’s Cranfield School of Management investigates and offers advice on the significant potential of the international e-commerce landscape for B2B companies.

Based on research and in-depth interviews, the white paper, “The Next Industrial Revolution: How E-Commerce is Transforming B2B,” identifies five categories of features that are essential to B2B e-commerce platforms: digital infrastructure, customer experience, customer personalization, seamless integration and synchronization of logistics.

The study also offers practical recommendations to companies that want to develop their capabilities across these five categories, by tapping into business intelligence tools to better capture things like big data, and looking to the supply chains of successful major retailers for insight when creating their own omnichannel sales networks.

“We have seen B2C e-commerce grow at a faster pace than most other industry sectors in recent years, with premium cross-border shipments growing from 10 percent to more than 20 percent of the volumes of DHL Express,” said Ken Allen, CEO of DHL Express. “As this study shows, there is the same potential for cross-border B2B e-commerce to grow at a dynamic pace and the DHL Express network will be an enabler of that for businesses around the world.”

Within the next five years, cross-border B2B transactions are expected to reach $1.2 trillion, according to Forrester Research. And if companies are to take advantage of this opportunity, they’ll have to provide more flexible, scalable and mobile customer experiences in line with what B2C online shopping offers, though they’ll have to be sensitive to the fundamental differences between B2B and B2C transactions.

Adapting website features and functionalities, like product catalogs and live customer support, could make the difference, as could better integration of frontend and backend systems and end-to-end logistics.

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“E-commerce is radically transforming the way in which B2B companies operate and opening up new market opportunities around the globe while simultaneously challenging many established companies to keep up with more agile newcomers,” said John Pearson, CEO of DHL Express Europe. “The most successful e-commerce companies today provide an enhanced customer experience comparable to what we all now know from our personal online shopping activities. To compete in this changing market environment, B2B companies are also having to change their supply chains, becoming more transparent, streamlined, responsive and flexible.”

Michael Bourlakis, a professor and chair in Logistics & Supply Chain Management at Cranfield University, said “innovators” have sophisticated offerings and are using advanced technologies, like machine learning and virtual reality, to better anticipate customer requirements and deliver on demand for more personalized experiences.

Companies that want to build flexibility into their networks and take advantage of the overseas demand that comes with the launch of a new e-commerce offering, should look to international express logistics companies to help them gain door-to-door access to overseas markets. This would mean tapping into insights from potentially new customer segments without having to employ sizable warehousing and distribution networks in low-volume markets. In turn, it would streamline their logistics processes, cut back on lead times, improve transparency and minimize the overall financial risk.

Supply chain experts cited in the paper said the key barriers and challenges influencing B2B e-commerce growth are exchange rates, customs and duties, and less developed infrastructures as top challenges, especially when operating outside Europe. They said supply chains will need to adjust considering that they will be more information and data-driven and less based on physical activities.

Agility will be key for transport networks in order to accommodate new logistics demands and increase customer satisfaction, while new skills such as IT-related activities and supply chain analytics will be vital to accommodate the changing business and supply chain landscape.

Investment in the digital transformation of B2B cross-border e-commerce businesses will continue to play an increasingly important role, the paper stressed, and can only be implemented successfully by streamlining culture, processes and technology.

Digital transformation to a B2B e-commerce business requires drastic changes, including top management interest and collaboration of business processes, the paper noted.

“An effective implementation results in simple, flexible and convenient business processes for improving customer experience,” the paper stated. “It also combines the best of human and machines, working in tandem to deliver personalized service, via online customer support and machine learning techniques to better anticipate customer needs. Customer service will be a key differentiator for B2B e-commerce companies, supporting a company’s brand.”

B2B sales data could be of great potential for transforming businesses that are growing in volume, velocity and variety, while business intelligence tools are important to transform data into visualizations to gain deeper customer insights for specific product demand and on products sold.

Synchronizing logistics operations will be critical to success in cross-border B2B for e-commerce companies, because customers want speed, reliability, traceability and convenience in delivery with an effective product returns and exchange policy, according to the paper.

“For those companies looking to build flexibility into their networks to either address demand or differentiate based on a faster speed to The Next Industrial Revolution market, international express logistics companies or integrators can also support B2B companies with direct and rapid door-to-door access to overseas markets even for smaller batch volumes, providing better conversion rates of latent demand and the opportunity to differentiate with a premium service offering,” the paper added.