The B2B2C model is on the rise, says former L’Oréal executive Nicolas Krafft, driven by a number of factors that include heavy digital disruption within these industries, a major digital shift in the way customers purchase — a process accelerated by the COVID-19 pandemic— and a desire on the part of businesses to increase sales without having to develop non-core products and services.
Essentially, B2B2C is a cooperative model where a business works in tandem with another business to sell products to consumers. Think of the way beauty salons resell hair products, or the way bars and restaurants rely on Open Table to bring in reservations and GrubHub for food delivery. Or the way homeowners are increasingly making furniture and consignment purchases through interior designers.
The digital shift is creating new opportunities
The B2B2C model is about collaboration, says Nicolas Krafft. A company that does not have the kind of brand recognition to develop and sell its own branded products or launch its own platform for users can either serve as an intermediary for selling branded products directly to customers, building off brand recognition and profiting from sales, or can utilize a more established digital platform or app in order to bring in customers via online reservations and sales.
In either case, the businesses form a kind of symbiotic relationship, says Krafft, that boosts their recognition and sales and makes life easier for consumers who generally want to reduce the number of digital platforms they need to interact with.
Former L’Oréal executive Nicolas Krafft notes that as most of our purchasing decisions are made online, it makes sense that brick and mortar businesses — whether hair salons or restaurants or interior designer businesses — are looking to new e-commerce platforms to boost their business. Ultimately, he says, the B2B2C model is likely to become the norm.
Nowhere has this shift been felt more acutely than in the restaurant industry, Krafft notes. Not long ago, customers wanting to order takeout from a restaurant called that restaurant directly to place their order. Now, they Google their options online, order from their phones and use DoorDash, GrubHub, or Uber Eats to schedule the order for either pickup or delivery. The e-commerce platform gets a cut of every sale, and the restaurant, in turn, gets visibility and increased sales by participating in an easy-to-use, highly recognizable food ordering and delivery service.
During the COVID-19 pandemic, food delivery apps saw their business double. Forced to quarantine and remain socially distanced, and wary of indoor dining, many new customers discovered the ease of online ordering and these platforms have now become essential for dining establishments large and small.
The traditional B2B2C needs to re-invent itself
In the more traditional B2B2C models, the bar or restaurant owner, or the hair stylists in the salon, provide human interaction and build trust with the customer directly through their expertise and influence. They are able to recommend specific products designed for that person’s needs or tastes, and the customer is apt to listen and purchase because they trust the person making that recommendation.
But they have been challenged by brands that traditionally sold almost exclusively through them and went more and more D2C. First because digital has lowered the barriers to entry – think for example of professional beauty brand selling through Amazon directly instead of having to setup expensive sales forces to visits thousands of beauty salons. Secondly because these businesses – salons or restaurant – were often obliged to close during the pandemic.
This has become now even more urgent for these classical businesses to re-invent themselves around their core value added to the customers: the personal relationship. This is a sort of personal, in-person influence that a major haircare or beverage brand could not independently build with customers but can benefit from in a B2B2C arrangement.
The better marketers understand the merging of customers’ offline and online decision making, and how the in-person experience can complement the online experience the more efficient brands will become at creating the omnichannel experience those customers ultimately want and that best drives their purchasing decisions, Krafft says.
Customer journey, data and decisions
Customer centricity is key for both new and existing businesses to create a superior flowless customer experience that merges both the offline and the online experience. Understand the expectations of customer along his path to purchase is made possible through better use of data and increased cooperation between the different stakeholders.
And by using online apps, restaurants have found they are better able to advertise their menu items in a more appealing, visual fashion, drawing in new customers. They’ve also been able to greatly streamline purchasing transactions — both online and in restaurants — and raised restaurants’ visibility. This data can in turn be used to better understand consumer behavior, drive future marketing campaigns, reduce costs, and increase sales.
The B2B2C model is one where both businesses and customers benefit, says Nicolas Krafft. Businesses collect data and streamline their services to meet customers’ needs, and customers get an easy-to-use personalized experience that combines all the benefits of an in-person connection with the ease of a digital purchase.
