How are Fortune 500 companies dealing with the coronavirus pandemic?
Some of the more interesting and telling findings include:
- 52% of CEOs are optimistic economic activity will return to the pre-pandemic levels in the near future (by Qu1 2022), however 25% of CEOs say pre-pandemic economic activity levels will not return until much later in Qu1 2023
- Over 26% of CEOs say their workplace will ‘never’ return to normal (i.e. more than a quarter do not ever envisage having 90% of their workforce at their usual workplace again)
- More than 50% say business travel at their company will ‘never’ return to pre-pandemic levels
- A whopping 75% of CEOs say the crisis will ‘accelerate’ the pace of technological transformation at their companies
- 35% of CEOs predicted their capital spending would not exceed 2019 levels until next year, and a further 27% indicated spending levels would only return in 2022.
CEOs’ top concerns arising from COVID-19
Apart from ‘keeping employees safe and productively employed’ over 55% of CEOs ranked their top two concerns in the current business environment as:
- Impact on my customers and uncertainty with their business continuity or vulnerability.
- Economic forecasts and uncertainty with demand for my products and services.
The single most important thing the crisis has taught me is …
A key take out that should resonate for all businesses was from the CEO who pointed out:
“A business cannot wait for the transformation it knows it needs.”
What does this post-pandemic business environment transformation mean for B2B buyers and sellers?
The Fortune 500 CEO research confirms that leaders of top companies have recognised the business world will be permanently transformed by the pandemic. Some changes, like a drastic reduction in business travel are here now. Others will take time to play out.
B2B buyer motivation and behaviour trends already apparent pre-pandemic will only accelerate in response to crisis and beyond. This means businesses that don’t act, respond and ultimately transform will be left behind.
Trend #1 – B2B buyer motivation – favours maximum efficiency reflected by an increasing shift to digital or e-commerce
Successful businesses know that productivity and efficiency is key to profitability, which is why many B2B buyers (including Fortune 500 companies) have rapidly embraced digital e-commerce and procurement tools. Successful companies are focussed on whatever they can do to make business purchasing (or procurement) processes more cost-effective, efficient and quick, so they can move on to more strategic and valuable initiatives.
Research confirms this shift by B2B buyers is no mere trend, but will be a way of life very soon. Just prior to the pandemic business forecasters Forrester predicted B2B e-commerce sales will reach $1.8 trillion and account for 17% of all B2B sales in the US by 2023. Forrester also forecasts a Compound Annual Growth Rate (CAGR) of 10% in B2B eCommerce over the next five years.
Supporting this was market analyst IDC’s forecast that digital B2B e-commerce applications will grow by a further 23.6% in the next five years.
The current environment created by COVID19 will only accelerate this shift to digital even faster and eclipse these numbers.
Trend #2 – Omnichannel B2B buying behaviours – seeking frictionless, on demand purchasing
We have also seen the rise of ‘omnichannel’ buying behaviours. More than just behaviours or preferences, this purchasing style has become a requirement for many large consumers seeking efficiency, consistency, rapidity and less ‘friction’ in the dealing with selling organisations.
According to Paradigm B2B CEO Andy Hoar:
“Yesterday, buyers wanted to buy either online or offline; today, they want to buy both online and offline; and tomorrow, they will want to buy anywhere, anytime — independent of channel or touchpoint.”
These channel-agnostic buyers expect compelling and interconnected experiences from selling organisations throughout their purchase journeys, and at each level of the organisation with which they interact.
What do these trends mean for B2B sellers in a transformed world?
Increasingly, by consolidating their purchasing channels into a few online sources buyers will entirely cut the sales rep or account manager out of the buying process. Relationships and direct selling will become less important in many segments and redundant in highly commoditsed markets.
On the selling side, few B2B organisations have kept up with buyer behaviours and motivations. This is due to many organisations lacking the sales maturity or capability necessary to meet ‘on demand’ requirements across digital channels.
Organisations focussed on selling in a B2B environment would do well to realise that the best way to deal with market uncertainty (which is always there, the latest just happens to be exacerbated by COVID-19) is to take a proactive approach. The only real certainty is that as a seller failing to act will put you out of the race.
If you want to do more than just survive, but grow and thrive post-COVID 19, you will have to adapt, change and transform – and do it quickly.
Want to better understand the sales trends impacting growth and the B2B selling environment? Keep an eye out in coming weeks for JMA’s blog series on B2B transformation where we analyse the key buyer behaviours and motivations impacting B2B sellers.
If you’d like a briefing on the impact of the coronavirus on the B2B environment and how it could impact your business please get in touch.
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