In a previous article titled “What Is B2B?”, we delved into B2B (business-to-business) companies, what they are, and how they operate. Now, we will be approaching a similar yet unique question: What is B2C?
In simplest terms, B2C is an acronym for “business-to-consumer” companies, which are based on a business model in which businesses sell products or services directly to individual customers and clients, whom are also the end users, as opposed to selling to other businesses. B2C e-commerce (commerce through electronic transactions) normally suggests commerce transactions that take place through online catalogs featured on company websites.
Most users have already been exposed to the B2C ecommerce model, even if they are not aware. Online shopping through companies as large and diverse as Amazon to as small and niche as Austin Art Garage has proven to be an invaluably convenient business model for consumers searching for any product under the sun. In 2016, in the United States alone, the total online revenue reached an astronomical $394.86 billion, and the web comprised about 42% of all growth in the retail market, according to a report released by the U.S. Commerce Department. This isn’t even the end; these reports still predict even further growth after reaching record numbers, and shows us that the full potential of e-commerce in B2C has yet to be reached.
When giving answers to the question What is B2C?, we often think of giant retailers like eBay or Amazon. However, the reputable companies are not always the competition. B2C e-commerce competitors have great potential in niche and local sales, as with any emerging market, and customers that are consistently loyal to small and/or local businesses. The winning methods fluctuate widely for theme-based online retailers, specific deal aggregators, national closed retailing, or international distributors. However, key challenged for B2C online stores are all quite the same, regardless of scope and depth of the company at large.
Challenges Faced by B2C Companies
When asking What is B2C?, one key takeaway that is markedly different from B2B is that there is much higher demand and far more competition from customers in the B2C e-commerce industry. We can take magnifying glass to the successful B2C company recipe and highlight the following factors: consumer traffic, customer support, product searchability, and payment processing.
Consumer traffic is vital to the success of any company with an online presence. If search engines such as Google or Bing do not know the company website name, you essentially do not exist in practical terms. SEO (search engine optimization) and online marketing are the essence to any online company, and is certainly something that cannot be overlooked when marketing on the web for your business. B2C websites absolutely must be optimized to attract traffic, from everything down to microstructure, architecture, and content management systems that work for you since its inception. This is why website platforms are vital, and seemingly minor decisions like domain names and hosting are actually some of the most significant decisions to be made, with stringent cost-benefit analyses required by the owner.
When answering the question What is B2C?, what is the one word that factually defines the company? Consumers. And in order to retain and grow the amount of consumers, customer support is essential to any B2C business. In fact, the cost of acquiring a new consumer is anywhere from 5 to 25 times more expensive than maintaining existing loyal customers, whom generally spend 60% more than new customers, according to a report by Harvard Business Review. An efficient and high-quality customer service experience encourages new users to become loyal customers (though hopefully customer service won’t be needed too much!), so a lot of emphasis must be placed on retention rates. This is where the debate for whether to outsource or not comes into play for many businesses: is it better to spend less money while outsourcing customer service and possibly lose more customers, or to spend more money on quality domestic representatives, and keep more customers? This is a question up to the B2C that must decide for themselves which one they think will work better for their business. In monopolies or even businesses that dominate an industry, this question may hold little importance since customers will always have to come back anyway due to lack of competition.
Other than just providing exceptional customer service, it is also impertinent to companies to employ strategies that make clients feel appreciated, and to make the user experience as easy as possible. To engage clients and make them feel appreciated, companies can set up loyalty programs, campaigns, promotions, and even software that personalizes the experience, which can also be enhanced along with cookies to suggest other products they may like. The website can be user friendly by being simple, straightforward, containing several links within the website, aesthetically pleasing, and making the most important information the easiest to access and see, such as how to contact the business and hours of operation.
Another topic that directly relates to website usability is product searchability. Many online stores have continually become glitzier and aesthetically pleasing, but this hardly benefits a business if the user cannot find the product they want to purchase from the website. The convenience of the on-site search and navigation between web pages is one of many key components in usability for a business. Online stores must consider associations, jargon, autocomplete suggestions, filers, clear product hierarchies, and abbreviations when creating content for their website. It is highly suggested that such stores perform their own case studies and see what users go where in the website the most, and how their experience could be improved with feedback tools.
And the final challenge faced by B2C companies is payment processing. It is of utmost importance to find a web developer that can implement payment processing and alter databases in the most secure manner. Methods such as SSL encryption and PCI compliance can increase online clients’ confidence, especially if it is outlined to the client directly on the webpage to ensure their information is safe. Websites can also use third-party reputable resources such as PayPal that are highly trusted by the general public.
Still asking What is B2C? Check out our article titled What is B2B? to help compare and contrast the similarities and differences between the two business models.