July 23, 2019

From B2B to B2B2C Logistics

Thanks to the growing popularity of e-commerce as well as a flood of young talent into the business world, B2B and B2C companies are experimenting with a trendy new business model. The previously distinct domains of B2C (business-to-consumer) and B2B (business-to-business) are being integrated and remodelling themselves as B2B2C (business-to-business-to-consumer) companies. While this development has worked well for several companies, it creates an increased need for monitoring during the supply chain from the producer to the end-customer.

How does the B2B2C model work?

The goal of a B2B2C model is straightforward if not a little ambitious. A B2B2C company’s aim is to access the consumer market via an ancillary business. The reasoning behind this strategy is quite clear. By accessing a new consumer base via secondary businesses, these consumers will be introduced to the B2B2C and; hopefully, come to recognise the service or product that the brand provides.

Reaching consumers in this way can be incredibly mutually beneficial for both parties which is a positive considering how competitive the consumer market can be. These benefits are simple. The B2B attracts new consumers; ultimately, generating new sales and leads, and the B2C is able to provide its consumers with new and attractive services or products. By doing so, these consumer and enterprise funds can also achieve a more predictable growth plan (i.e. reduce risk) as well as secure financing more reliably as investors can liquidate their position via an exit. On a similar note, adopting a B2B2C model may be the only option for B2B businesses looking to open up new pathways into the consumer market. For many B2B businesses, eliminating their B2B model would mean eliminating their main revenue stream (not to mention the years and massive amounts of capital that they often invest in developing a sustainable B2B business.)  

B2B2C logistics and the importance of supply chain management

While achieving a direct pipeline to the consumer is what B2B2C businesses are hoping to achieve, doing so creates a unique significance on engaging those consumers. Reaching the consumer directly is not only a benefit to the B2B2C. It can also benefit the consumer. By streamlining their supply chain, a B2B2C can offer the consumer a more personalized buying experience. And, in order to replace more traditional supply chains, they will have to.

Take B2B2C mattress companies like Tuft & Needle, Casper, or Endy as interesting examples. As opposed to the method of buying a mattress that most people alive today have grown accustomed to (this involved a consumer spending hours of their own time in department stores speaking with sales reps and often covering the cost of shipping themselves), these companies provide the consumer with a one-click buying experience. The consumer browses the business’ website, picks out the mattress they want, and the product is delivered with a 100-day return policy. The benefit that the B2B2C offers the consumer is that their purchase is delivered in a manner that suits them. A below Amazon-level buying experience could completely spoil the benefits that the consumer sees from buying from a B2B2C. And negative reviews can seriously damage these organization as well.

Casper mattresses reified this point in 2016 when a mattress related affiliate site gave some of their products negative reviews. The company took the affiliate site, Sleepopolis, to court and; eventually, provided financial backing to media company who purchased it. Once the new owners took over, the negative reviews were taken down and replaced with a Casper.com coupon.

How IoT projects and data logging can enable positive consumer experiences

Since the consumer experience is so vital to the B2B2C model, IoT applications and data logging offer clear benefits to B2B businesses looking to enable a new B2C channel. Samsung executive, Ed Adams, provides an interesting example when he describes how an IoT-enabled water shutoff valve could help reduce costs for insurance providers while also delivering value to the consumer: “If I can remote in and shut off a water main if there is a leak detected and you haven’t responded in two minutes, I can shut off your water main and save us both thousands of dollars in damage and cost.”

Data logging can also be crucial for B2B2C companies that rely so heavily on dependable logistical operations. Damaged goods can most definitely lead to damaged reputations for companies looking to run the B2B2C model and data logging is the solution that many turn to. Data logging is a process that allows supply chain department heads the ability to collect and record logistical data over time and in different environments. Logger devices remotely record data related to the condition of the shipment and can provide instant access to company reps and consumers alike. This, for many, answers the demand that B2B2C businesses have for supply chain monitoring.   

Did you enjoy this post? Take a look at the posts Handle With Care: The Ultimate Guide to Shipping Fragile Items and Logistics of Wine and Fine Beverages as well.