Nothing Fishy About BTB E-Commerce SuccessBusiness-to-business marketers tend to get lost in consumer hype, but BTB merchants are launching some of the most innovative business models on the Web. Here are examples of BTB marketers leading the way.
The Pan-European Fish Auction, a consortium in the Northern European fishing industry, has created a real-time fishing auction to tie together fish markets. The auction allows buyers in Northern European markets to bid for fish from boats landed in other markets. PEFA plans to extend the network to other countries. Restaurants and hospitality companies wanting the freshest fish, and who don't mind paying air freight charges, will have the most unique daily catch delivered.
The use of the Internet fish auction, when linked to automated processing and transactions, will speed the sale of fish by reducing labor and time and will increase revenue for the fishermen. Meanwhile, consumers benefit from fresher fish in their favorite restaurants.
Industrial parts direct marketer W.W. Grainger Inc., Chicago, offers an example of how the Internet reduces operational costs and improves the speed-to-market for BTB. The company launched a procurement site of products and services called OrderZone at www.orderzone.com. The site offers business customers a single point of entry to sites from Grainger, Cintas Corp., Corporate Express Inc., Marshall Industries, Lab Safety Supply and VWR Scientific Products.
These companies come together to offer a single point of entry for customers. Each has different accounting and inventory control systems. Yet OrderZone delivers a secure vendor site where customers can order in real time, pay electronically and receive one statement for all orders.
The system allows customers to view expenditures and inventory status with all suppliers. Perot Systems Corp., Dallas, is the company putting this together.
A more simple system is in place with Andronicos grocery stores in the San Francisco area. Beginning with a test in July, a Web-based shared database will help eliminate errors and disputes over money owed to suppliers by using scanners to monitor grocery store inventories and agreed-upon prices for items scanned at the register.
In another example, Johnson Controls, which makes building controls and components for the automotive industry, has seen its delivery-time window with key manufactures move from days to as little as two hours.
And these examples are just the beginning. Forrester Research, Cambridge, MA, predicts BTB e-commerce will grow to $543 billion by 2002. According to Datamonitor, in five years 630,000 US companies and 245,000 European companies will be fully involved in integrated BTB electronic commerce.
With this rise of BTB commerce comes a change to some existing business models.
Large public companies and government organizations are implementing e-procurement on the Web. The ramifications are easy to understand: lowering human interface, gaining global access to buyers and sellers, increasing cost containment and convenience.
Many traditional B-to-B marketers are finding they want access to the consumer. Although done to promote the company brand and its goods or services, these companies increasingly are adding e-commerce capabilities, improving cash flow and bypassing traditional intermediaries. Benefits to the customer are a wider choice of products and services, improved choices, the expectation of lower prices and 24-hour access.
E-auctions offer an electronic implementation of the bidding mechanism that can be heightened with multimedia presentation of goods. A good way to dispose of slower-moving merchandise or new products is to get established before the competition offers something similar so you can get a higher price before competition sets in.
Businesses that will see their models grow in the future include Virtual communities, with the focus on value-added communication between customers, and value chain service providers, which support part of the value chain by providing infrastructure for payment, logistics or site management.
Dealing with organizational change is the biggest challenge of doing business on the Internet. Customers of all types expect a sales and customer service environment that operates 24 hour a day, seven days a week with immediate response to their requests.
With all of the challenges that e-commerce brings, the future is very exciting. New channels and methods of selling are now ready for the pioneers of the upcoming millennium.
Robert McKim is CEO of Internet consultant firm MS Database Marketing, Los Angeles. Reach him at Rmckim@msdbm.com.