Not much had changed in the traditional supply and distribution landscape for 50 or 60 years. Innovation was long overdue. But then came along digital business-to-business (eB2B) to revolutionise the way things are done.
An eB2B marketplace allows brands/producers to trade directly with multiple end customers or outlets, saving margin, simplifying the purchasing experience, speeding up the process, creating cost efficiencies and adding value.
For former sales rep Sam Ulph, now founder and CEO of StarStock, eB2B was an obvious solution to fragmented practices. “I’d walk into pubs, talk through the products but couldn’t conclude a sale because the publican had to go via a wholesaler rather than direct. It struck me as an incredibly inefficient use of time and cost.” And that was when the concept of StarStock — a platform that allows licensees to order food and drink stock directly from the brands that create them — was born. Today, businesses trade off the StarStock platform or set up their own platform using a StarStock ‘white label’ web shop.
Duncan Knight, partner in Digital and Customer Consulting at KPMG, says eB2B has gained momentum in the past five years or so. When manufacturers struggled to grow their field salesforce, digital engagement models took up the slack. “And then, through the COVID-19 pandemic, digital became the principal engagement model. And people who weren’t digital natives became digitally immersed and enjoyed the experience. So, eB2B evolved from a cost-to-serve engine to a growth engine. And now it’s a new revenue stream, with options for value-add services and data monetisation.”
“eB2B evolved from a cost-to-serve engine to a growth engine. And now it’s a new revenue stream, with options for value-add services and data monetisation.”
Duncan Knight, Partner
Digital and Customer Consulting, KPMG
Out with the old; in with the new
Some businesses that come to the eB2B marketplace are digitally mature. They have advanced payment capabilities and inhouse data and artificial intelligence competencies. But they must work on their relationships with both manufacturers and suppliers to establish themselves as credible players.
Others — the traditional consumer packaged goods (CPG) businesses — have robust customer and trade relationships but may lack digital and online payment capabilities. They’re conflicted about whether to buy in these capabilities or to outsource them. They eye up acquisition opportunities, not just for their revenue streams but for the digital capabilities that sit behind the brands.
Ultimately, according to Sam, it is the “hunger” to get eB2B platforms up and running, to test and learn, to bring other stakeholders along on the journey that determines how well eB2B fits with corporate strategy. “If you just dip your toe into the eB2B water to see what happens, expect to fall in the middle,” he explains. “Without commitment, producers won’t discover what an eB2B platform can do that a traditional channel cannot.”
“If you just dip your toe into the eB2B water to see what happens, expect to fall in the middle. Without commitment, producers won’t discover that an eB2B platform can do what a traditional channel cannot.”
Sam Ulph, Founder and CEO,
Moving to an eB2B platform is, warns Duncan, like building new muscle and will have implications for the operating model. It might entail changes to customer incentives, contractual terms or the way in which traffic is directed to this new channel. There will be tax and legal implications too, especially across borders. And, of course, there is data and content to manage. These are not afterthoughts but critical to building, running and scaling an eB2B platform.
Key takeaway: When adopting eB2B, stakeholder alignment is essential. Take the business along on the journey with you, understand your capabilities and deficiencies, and don’t delay in addressing operational priorities that will accompany a shift to a new channel.