The Future of B2B marketplaces: Trends to watch in 2023 and beyond
It has only been in the last few years that B2B eCommerce has really taken off. In fact, according to a report by Forrester, spending on B2B marketplace platforms is expected to grow from $1.7 trillion in 2021 to exceed $2 trillion in 2023 and $3 trillion by 2027. In the past, businesses relied on brick-and-mortar stores and catalogues to reach their customers. Customers increasingly turn to the internet to research and purchase products. This shift has led to a decline in traditional channels and an increase in online sales.
Online marketplaces have also had a major impact on the way businesses operate. In the past, businesses typically maintained large product inventories to meet customer demand. Today, however, businesses can take advantage of just-in-time inventory management practices made possible by online marketplaces. This allows businesses to reduce their inventory costs and free up working capital.
Finally, online marketplaces have created new opportunities for businesses to reach international markets. In the past, selling internationally would have required a physical infrastructure that was often prohibitively expensive. Online marketplaces now allow businesses to easily sell their products to customers worldwide at no added cost.
There are a few key factors:
- The rise of the Millennial workforce: This generation is more comfortable shopping online than any other before it.
- Greater access to technology: Thanks to the advancement of technology, businesses now have more options than ever before when it comes to B2B eCommerce platforms. Integration tools, PIM (Product Information Management) and advancement in headless technology will automate half of the tedious tasks by replacing outdated legacy systems.
- The growth of online marketplaces: Sites like Amazon and eBay have made it easier than ever for businesses to find suppliers and products.
Our predictions are generally based on quantitative data and experience, namely the many conversations we have with business and organisations yearly. With that in mind, let's dive into predicting next year's trends for B2B commerce.
Trends to watch in 2023:
- Online sales will keep growing
- Vertical marketplaces
- Artificial intelligence
- Frictionless checkouts
- Omnichannel selling
- Increase in the subscription model for sales
- Augmented reality and virtual reality
1. Online sales will keep growing
B2B eCommerce and online sales are only set to continue to grow, as we move into 2023. Statista research suggests that in 2023, an estimated 17% of B2B sales are expected to be generated digitally.
Undoubtedly, the coronavirus pandemic has become a catalyst for eCommerce/marketplaces sales modes. Quarantines, self-isolation, travel restrictions - these measures have led to online sales having a greater influence on digital marketplace trends.
As a result, more and more organisations have started switching to digital sales process and have got involved in online marketplace development. Selling online can give you new opportunities for business growth. Ecommerce is no longer a novelty sales channel that B2B businesses experiment with, either. McKinsey & Company research shows that 65% of B2B companies were exclusively selling online in 2022. And, for the first time, B2Bs are more likely to offer ecommerce over in-person sales.
The latest research on professional buyers and B2B sellers indicates:
- Buyers are spending more online now than before the pandemic
- The value of the purchases has increased by an average of 45%
2. Vertical marketplaces
Another noticeable marketplace trend is the shift towards vertical marketplace platforms. Vertical marketplaces focus on a specific niche and offer products from only that particular category. Vertical vs horizontal marketplaces differ in that the first ones serve a group of customers with a specific interest. Meanwhile, horizontal marketplaces offer products across different categories.
Today, companies and organisations tend to focus narrowly on the products they offer and the customers they want to serve. So, consider building a vertical platform if you are considering investing in marketplace development. For example, you can build an online auction platform for IPv4 address trading.
This way, you will be able to stand out from the crowd and increase your user base. At the same time, vertical platforms can bring more value to customers by satisfying their unique needs and requirements. Consider, for example, such vertical marketplaces as CarNext or Hilco.
3. Artificial intelligence
It is common for organisations to turn to artificial intelligence to streamline their workflow and processes. However, the eCommerce space has not stayed on the sidelines and has quickly followed this lead. Today, AI is becoming an increasingly prominent feature of online marketplaces.
The main proponents of online sales is the generation of zoomers (1997-2021) and millennials (1981-1996), from 18 to 34 years old. They prefer to communicate using instant messengers, avoiding phone calls. It is worth considering the value of utilizing AI within your marketplace communication channels. For example in the forms of messengers and chatbots. AI implementation - Artificial intelligence allows the creation of personalised recommendations based on the customer’s purchase history.
Finally, smart AI algorithms help analyse consumers’ behaviour and identify the best sales channels.
Below you can see the statistics of revenue from the artificial intelligence software market. The numbers have gradually increased since 2018 and are expected to reach more than $100 bln in 2025.
Therefore, there is no doubt that artificial intelligence as a marketplace trend will continue its rise.
Interestingly, the McKinsey Global Institute forecasts that at least one type of AI technology will have been implemented by about 70% of organisations by 2030.
We have already mentioned the active usage of AI as a significant marketplace trend. Still, we want to show how artificial intelligence can help create a personalized experience. Why is it so important within marketplace trends? Increasingly we hear that consumers tend to value products that are tailored to their specific needs.
Recent findings of Smarter HQ are working illustrations of this online marketplace trend. They show that 72% of customers will only collaborate with personalised messaging brands, while A McKinsey & Company survey of close to 3,500 decision-makers in 12 markets found that along with more channels and more convenience, customers want a more personalized experience.
Use AI online marketplace technology to collect information about your visitors. This way, you can adjust your marketplace to their particular needs and desires during purchase. As a result, you get better chances to grow your revenue and reduce the bounce rate up to 45%.
5. Frictionless Checkouts
Research conducted by Baymard Institute, shows that the average marketplace cart abandonment rate is 69.99%.
When designing a frictionless checkout experience, it is important to streamline the experience with fewer steps. This means not requiring people to make an account to buy, being transparent with all costs and accommodating a wide range of payment options. Retailers that can offer frictionless checkout experiences will be able to enjoy higher conversion rates.
Speaking about the possibilities of truly frictionless checkouts, NovaFori Executive Paul MacGregor said:
“As we witness a post-pandemic acceleration in the convergence of physical and digital retail, retailers must continue to remove any remaining friction points from the in-store and checkout experience. While digitalisation and frictionless sales are certainly two of the big winners from the pandemic, sellers should not be too quick to discount the importance of human interaction in the era of digital commerce. In order to meet tomorrow’s buyers' expectations, business must adopt a hybrid mentality, making an effective unified commerce solution ‘a must’ in 2023.”
- New payment options
When completing complex, B2B transactions, users desire a painless purchase experience with payment options that smoothly integrate with their businesses back-end systems. With 80% of B2B transactions set to occur through digital channels by 2025, it is of increasing importance that marketplace operators ensure their payment infrastructure is sufficiently developed. Doing so will help to improve both retention rate and the chance of repeat purchases.
So what payment options should be added to your digital marketplace apart from traditional credit and debit cards? First, your online marketplaces should accommodate specialist B2B payment services such as Stripe, NetSuite or FastSpring. High demand for these payment gateways is set to increase moving forward, as B2B sales move increasingly online.
6. Omnichannel selling
Did you know that 53% of retailers are adopting tools that assist them in selling through various channels? This data makes omnichannel selling one of the interesting two-sided marketplace trends for 2023 and further.
Still, the question arises of what this term actually means. How is it different from a multichannel strategy?
In brief, there isn’t much difference. The omnichannel approach means selling products and services across different channels. The key feature is that each of these channels is connected through a marketplace. This way, businesses ensure that customers get a seamless experience across all platforms through which they sell.
If omnichannel is a terra incognita for you, follow the tips below to leverage this enterprise marketplace trend.
Learn more about your customers. Research their interests, demographics, pain points, and needs. This way, you’ll discover the right moment in the customer journey to engage your audience and encourage customers to make purchase decisions.
Choose the right channels. Find out which channels are especially popular among your consumers. The channels may include a marketplace website, mobile app, ads, and social media.
Define a clear goal for each channel. For example, use one channel for interacting with your consumers and another for publishing news updates.
Keep on testing your marketing strategy. Track and measure your business results to ensure you get the most out of your omnichannel strategy.
7. Increase in the subscription model for sales
New subscription offerings are born every day. The subscription economy now operates across a wide range of industries, although there has been a particular increase in the automotive industry. Inflation and the costs of products and services are rising, and users are becoming wary of subscriptions. Many are returning to pre-subscription sales habits to avoid paying what may be considered a non-essential convenience premium. Meanwhile, those in favor of subscriptions want to keep the cost down.
The value of subscriptions for businesses is clear, due to their ability to generate mass amounts of customer data and recurring revenue from the consumer.
Recent reports have shown that most companies will switch to a subscription-based model for their software products by 2023. A study by Revenera illustrated that over 50% of businesses use subscription or perpetual licensing models. It was also stated that subscription and usage-based models would record the strongest growth in the next 18 months. Many organisations are looking to change their models to access new markets and create a recurring revenue stream.
8. Augmented reality and virtual reality
Augmented reality is a tool that joins real-world spaces with computer-generated additions. This technology is popular in online marketplaces as it gives an enhanced experience when trying products. Be it clothes or furniture, and customers can make more informed decisions with AR.
According to the survey, 82% of brands that use AR state that it helps them improve customer experience.
The technology behind AR has evolved, and today there are several different types on offer.
Firstly, Marker-based AR (image recognition or recognition-based augmented reality). In this case, an object, which is a marker, is recognized with a camera. When the AR device detects the marker, the app displays a 3D version instead of the marker. The user can examine that 3D model thoroughly from many points
Secondly, Markerless AR. You do not need a real-world object to trigger augmented reality. You can displays an item wherever you want. After that, you can rotate and move it to examine it better. For example, Shopify has taken advantage of this technology to promote its products. You can choose products and try how they fit the environment before purchasing.
Finally, projection-based AR. This type of AR projects synthetic light on real-world surfaces and sometimes allows us to interact with it. AR takes the form of holograms in this case.
Online marketplaces use AR to show product size and fit in the environment, helping users to try products before purchasing. This helps drive the sales process, the statistics below show that people of different generations will try new items with augmented reality.
Currently, the size of the AR software market approaches $10.5 billion. The extended reality market is expected to grow considerably in the near future.
A similar method of creating an excellent user experience is virtual reality (VR). The difference between AR and VR is that the first offers a blend of the real world and digital experience. Meanwhile, VR is diving into a totally simulated environment.
VR and AR technology can be used to facilitate complex B2B product overviews. For example, Cisco has previously worked with VR/AR technology provide Kaon Interactive to develop a visually engaging, interactive product catalogue, intended to give buyers an even more immersive and detailed experience.
As for now, VR is mostly used for virtual shopping tours. For example, Bloomingdale’s created a virtual store giving an engaging experience for shoppers. The brand turned to VR due to the opportunities it opens for customers. They can try clothes and shoes and also have an entertaining experience.
The future of digital commerce has never looked more promising. The latest online marketplace trends discussed above offer businesses multiple opportunities. However, it would be a big mistake to try and keep up with all of them. You must decide which marketplace trends in 2023 are important for your business and focus on them.
If you need assistance from a reliable online marketplace technology company, get in touch with us. We have delivered successful marketplace platforms for over a decade and are evolving alongside market trends.
By keeping in mind some of the most popular online marketplace trends for 2023, you can implement new ideas and solutions to grow your business. This will help to impress customers, increase loyalty and remain ahead of competitors.
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