From B2B to B2C – the changing dynamic in retail

The landscape of retail has shifted. Retailers used to decide the market rules and customers adapted. In the age of customer-centric multi-channel retail, customers decide the rules and retailers try to catch up.

This new world affords many opportunities for brands, distributors, wholesalers, franchisors and predominantly concession-based department stores to shift from a B2B model to a B2C model and place the customer at the centre of every decision made, transforming into retailers themselves.

As multi-channel retailers they can get close to consumers, manage the relationship, trade directly and increase their brand penetration. This enables them to have consistent brand values, cross-channel merchandising, excellence in customer service, deeper customer insight and implement range localisation. In other words they can have ownership of every aspect of the customer journey.

In South East Asia and China the B2B mentality was sovereign in retail as it had emerged from rapid property development but as shopping behaviours have changed, and are still changing rapidly, retailers need to keep up with consumer desires and demands. This means an emphasis on branding values and consistency and on customer insight and experience, so that they too are creating a B2C mentality within multi-channel retail.

It’s an undertaking that can’t be taken lightly by either brands or retailers. A business needs to secure consistency and alignment within an organisation. If the values of the proposition are not reflected by people’s KPIs, goals and responsibilities, it is likely to flounder. Leadership, innovation and a willingness to change go together and processes are secondary.

Some brands opt for B2C and some go the marketplace route. Ideally companies should use both these channels and up to 5 more (see the 7 business models) but the choice of channels used should always be in line with their target market, segment and brand.

The extension of existing and development of new business models can cause non-retailers - specifically brands with a B2B mentality - to face a steep learning curve. Today’s consumers research, transact and share their experience across multiple channels online. To survive, it is essential for a business to place the customer at the centre of every decision made.

IVIS Group understand how brands and retailers alike can make this transition and collaborate with them through the phases of strategy, transformation and optimisation to achieve a successful multi-channel B2C business.