UK B2B E-Commerce market report
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Providing the most comprehensive and up-to-date information and analysis of the B2B E-Commerce market, and the behaviours, preferences and habits of the consumer.
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What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?
Covered in this Report
E-commerce covers the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet.
EDI is a document standard which, when implemented, acts as common interface between two or more computer applications in terms of understanding the document transmitted. It is commonly used by large companies for e-commerce purposes, such as sending orders to warehouses or tracking their order. It is more than mere e-mail; for instance, organisations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards. In 1996, the National Institute of Standards and Technology defined electronic data interchange as ""the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media."" It distinguishes mere electronic communication or data exchange, specifying that ""in EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing.
Before using EDI, trading partners must set up a trade agreement to define the parameters of EDI. Each partner in an EDI trade agreement must independently determine a method to translate internal data to and from EDI formatted messages. Each must agree on the communications media and arrange the method for transmitting information. This may involve several methods, such as a dedicated communications link, a virtual area network (VAN) or the internet. Each must provide for system recovery in case of failure or error, security and timely response.
There are several advantages to using EDI:
- EDI speeds the process and improves the accuracy of getting information into the user's computer system. The traditional connections between businesses are telephone and mail. Both can be slow and require human intervention. EDI uses direct links to the computer system to minimize the transmission delay.
- Direct links also eliminate the need for transcribing data into the computer. This reduces errors and saves time.
- EDI solves business problems, offers cost savings, and strategic benefits, and provides a competitive edge.
- EDI helps organisations improve communications and increase competitiveness, efficiency, and customer service by cutting costs and maximizing productivity and profitability.
- EDI can lower costs by reducing inventory investments by timelier ordering. EDI can enable better business practices, such as ""just in time"" stocking. If point of sale data is sent directly to vendors, inventories can be monitored and orders automatically generated to minimize overstocking.
- Other Services
Omni-channel marketing is a multi-channel approach to sales which seeks to provide the customer with a seamless shopping experience, whether the customer is shopping online from a desktop or mobile device, by telephone, or in person at a store.
What you need to know
E-commerce has penetrated virtually every sector of business and commerce, but the level of that penetration remains low in many cases and huge opportunities still exist for growth. The two very distinct areas of e-commerce are showing very different features and opportunities. Electronic data interchange (EDI) is largely restricted to areas where frequent deliveries within a wider order are placed. It is a strongly established sector in manufacturing and the wholesale industry. Yet it remains the province of a limited number of companies, with only 1.3% estimated to receive orders through EDI in the UK. Nonetheless, EDI accounts for more than half of the total e-commerce market, and is even more significant in the B2B market.
The more dynamic element of the market concerns website sales, where the B2C market is demonstrating strong growth and the B2B market remains under-developed. Only an estimated 9.1% of companies are gaining UK orders from websites, though this rises to 19.6% if micro companies (those employing up to ten people) are excluded. SMEs continue to under-utilise e-commerce, yet cloud computing is offering data mining capabilities to all companies, while software-as-a-service can cost-effectively replicate many of the features offered by industry giants, such as Amazon and Alibaba. It remains the case, that the larger the company, the more likely it is to gain sales through ecommerce. The proportion of companies making e-commerce sales is far lower than those purchasing through e-commerce. 33% of all companies make purchases through e-commerce, rising to 50.6% of companies with more than 10 employees.
Expert analysis from a specialist in the field
Written by Terry Leggett, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
Statistics demonstrate that the larger the company, the more likely it is to use e-commerce as a route to market. Yet cloud computing and software-as-a-service are making important facilities increasingly cost-effective for SMEs. Companies of all sizes remain three times more likely to use e-commerce as a purchasing route than a sales channel.
Senior B2B Analyst
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