Everything You Need to Know About B2C

It would be true to say that almost all Internet users are familiar with the B2C ecommerce model. When you buy any item or service online for personal use directly from a brand, this is B2C in action. Consumers appreciate the convenience of online shopping, where they can purchase clothing, electronics, media subscriptions, and services via the internet. The explosion of B2C online commerce occurred since 2020 and #pandemic, when billions of people changed their usual shopping behavior and began to buy food, clothing, entertainment subscriptions, etc. online.

Updated: October 29, 2021 | Sergey Berezin, Marketing Writer

woocommerce
Online shopping and sales are the most popular online activities worldwide. According to Statista, B2C revenues from online sales are projected to grow to 5.4 trillion U.S. dollars in 2022. Further growth of the industry is predicted; the full potential of the ecommerce market has not yet been reached.

What is B2C eCommerce?

B2C, the acronym for "business-to-consumer," is a business model based on transactions between a company that sells products or services and individual customers who are the end users of these products. The B2C ecommerce definition suggests the commerce transaction in the internet through a company’s website (mobile app, messenger) featured with an online catalog.

b2c ecommerce

What is the Difference Between B2C and B2B?

The formulas defining the model of online businesses consisting of two participants, such as B2C, B2B, B2G, or P2P, are easy to understand. Just substitute Business for “B”, Consumer for “C”, Government for “G”, and Person for “P”. Then you will immediately understand who is the seller and who is the buyer.

If you dig deeper, though, B2B and B2C models differ not only in the roles of who the buyers are, but reflect the difference in trade business processes for companies and end users. Consider changes in the processes of a client registration, verification, personalization, cataloging and content management, transaction volumes and payments, order processing, shipping, handling complaints and transaction records, as well as some other specific processes.

Learn how Virto Commerce created a B2B & B2C eCommerce solution for Lavazza by Bluespresso

Advantages of B2C eCommerce

About 30 years have passed since the first successful B2C projects, so millions of words and web pages have already been spoken and written about the advantages of B2C ecommerce. This is truly a new world of borderless trade and the convenience of shopping from home.

The value of B2C ecommerce has become especially evident during the pandemic, when billions of people lost the ability to go to brick-and-mortar stores and online shopping became the only way to provide themselves with food, medicine, and other essential goods.

Importantly, online shopping habits have remained with consumers after lockdowns all over the world ended. For example, according to Reuters, 70% of Britons say buying online and on mobile phones have become their preferred shopping methods, up from less than half prior to the coronavirus pandemic.

Disadvantages of B2C eCommerce

The world is not ideal, and even such a progressive type of trading business as B2C ecommerce has its challenges and disadvantages.

One of the B2C ecommerce drawbacks is the strong dependence of the visibility of the store in the search engines. If it is enough to place offline retail in a location with good traffic in order to provide it with enough buyers, then the online store should spend a lot on context ads, ordering SEO optimization, and having perfect textual content like blogs to get better indexing in Google, Bing, and other search engines.

Another difficulty that is crucial for small online stores is the need to join large marketplaces such as Amazon, Alibaba, and eBay. Moreover, if you create your own mobile application, then you have to bow to Apple or Google to place the application in the App Store and Google Play, then pay commissions there. By the way, ecommerce sales to consumers through online marketplaces are an effective way to solve the problem of access to millions of buyers for a small business, and this is called the B2B2C model (business-to-business-to-consumer).

To the other disadvantages of B2C commerce, you can add a great dependence on delivery service contractors. Customer satisfaction with purchases largely depends on their work. There is a big contrast here with a street store (also called brick-and-mortar store) where people personally come and pick up the purchased goods themselves, with the exception of heavy and oversized things.

B2C commerce challenges

There is much more competition and higher demands from customers in B2C ecommerce than in the business-to-business model. Taking a closer look at the B2C store success recipe, we can highlight the following factors.

Consumer traffic. If Google, Bing, or Yahoo! do not know your name, you do not exist. Search engine marketing and optimization are the lifeblood of any online business. The usual consumer behavior is to transition to a link on the first or second page of search results. A B2C website must be optimized to attract traffic; the structure, architecture, and content management system must work for you from its creation. This is why the choice for a website platform is vital to its success.

Payment processing. Many customers are hesitant to submit their personal data to websites due to security reasons. SSL encryption, PCI compliance, and other trust marks have proven to increase online clients' confidence.

Client support. Sales are always about people. The cost of acquiring a new consumer is almost ten times higher than of maintaining an existing loyal customer, who usually spends 60% more than a new client. An optimized customer experience encourages visitors to become loyal customers, so the most significant emphasis should be on improving retention. Many strategies help make clients feel appreciated. Online shopping needs to be easy; it needs to motivate clients to become your partners - the advocates of your brand. These tactics can be supported with powerful, easy-to-use tools that help deliver engaging promotions, campaigns, and loyalty programs.

Product findability. Online stores continue to become more straightforward, more intuitive, and flashy-looking. The convenience of on-site searching and navigating is a key component of usability. The associations, specific jargon, abbreviations, autocomplete suggestions of the search dictionary, filters and refinements, and clear product hierarchy are essential features that dramatically increase conversion rates. If a client can’t find a product, he can’t buy it. An online store platform must contain usability-related tools to make the searching process as easy as possible for the shoppers who come back to order again.

B2C Storefronts vs. Internet Retailers

Over the millennia of trading, many manufacturers have sold their products to retailers who display the products on their shelves and counters. Retailers' profits came from the margin they added to the price paid to the manufacturer.

With the invention of B2C ecommerce, some businesses began to sell products directly to consumers. Prices in online stores became lower due to the exclusion of an intermediary retailer. POS (point-of-sale) retailers first felt this competition during the dot-com boom in 1999-2001. Then many retail companies began to quickly adjust their trading strategy and ensure their presence on the internet.

More than 20 years after the dot-com revolution, B2C companies operating on the internet continue to dominate in the pace of sales. Amazon, Priceline, and eBay were part of the successful early dot-com boom, then they expanded their businesses and became giants of the online trading industry.

Types of B2C Models

As in any emerging market, B2C ecommerce participants have enormous potential in niche and local fragmentation. The winning formulas vary for international multichannel distributors, theme-based online stores, specific deal aggregators, or national closed retailing. Regardless, the key challenges are still quite similar for all B2C online stores.

Direct sellers

Direct selling in the B2C segment is a very effective method for selling goods and services to consumers. In general, this means a sale from a seller to a buyer without any intermediaries.

In practice, direct selling is very effective to appeal to special groups of buyers whose contacts and buying preferences are known. These could be people with a certain type of hobby, sports fans, or owners of some kind of premium cars or boats, etc.

For example, anglers and hunters often leave their contacts at specialized stores or ammunition manufacturers’ websites. This way, they can be sent news of the release of new fishing rods or accessories for hunting, and then sold such items directly, including home delivery.

Online intermediaries

The term “internet intermediaries” or “online intermediaries” in B2C ecommerce describes the wide, diverse range of service providers that facilitate online interactions between consumers and merchants. These companies connect users to the internet, process data, and host various web services.

In the B2C segment of commerce, online intermediaries often provide services for the replication of media content in global networks (SLI), and promote the sale of goods and services, including interactive geomaps, etc.

Most importantly, online intermediaries allow consumers to access an enormous amount of information very quickly and locate online stores that have local delivery or an offline POS around the shopper’s location.

Advertising based B2C

The advertising-based B2C model is about attracting visitors through interesting and/or useful content. The B2C model works especially well on news sites and large forums. The owners of such resources receive income by displaying advertisements on their site.

Also, sites with a high volume of traffic targeting women and men, such as Cosmopolitan and Men’s Health, can generate income not only from advertising, but also from content (photos, videos, and articles) using product placement.

Community-based B2C

If you are interested in certain topics discussed online, then you are most likely a member of thematic groups on social media platforms such as Facebook or are a follower of some Instagram guru. Typically, such a group is led by an entrepreneur or coach who moderates the subscribers. Once they have recruited enough members, they start using the group to promote products and services and make money through the platform. Members of such online communities are already warmed up as potential buyers who, moreover, share the content with their friends and within their social networks.

Fee-based B2C

Entertainment sites like Netflix or Disney charge fees so that consumers can access their content. Of course, some of the content will be free to show the value of the site, but the highest quality materials are offered by subscription. The biggest niche in this B2C model is adult content sites.

B2C Marketing

B2C marketing is a set of strategies, practices, and tactics that a company uses to promote its products or services to consumers. B2C campaigns focus not only on benefits and value, but also on attracting an emotional response from a customer, which is often the main motivation for a purchase.

Most B2C marketing objectives include the following:

Increase website traffic. B2C campaigns motivate a potential customer to visit a brand's website and learn more about its products.

Increase your mailing list. Emails bring the highest number of leads because the visits to the company's website increases; likewise, the number of new subscribers also increases.

Study your target audience. This allows you to interact effectively with your customers. B2C companies are actively using segmentation, which makes it possible to send more relevant messages to their audience.

Promote website in search results. The use of keywords helps the site advance in search results. Matching users' search queries also increases traffic.

Increase conversions and brand awareness. B2C marketing strategies help a business reach and retain a wider audience. For this, mass mailings, social networks, and other channels are used. This approach popularizes the brand and increases profits.

Target audience

Knowing your target audience gives you a huge advantage over your competitors. When you know your shopper’s profile, you don't have to waste your budget on broad-market advertising. Here, manufacturers of niche goods as well as goods for certain social groups, for example, newborn babies, are a big winner.

Buying cycle

The distinctive features of B2C marketing include a short sales cycle. Unlike B2B marketing, where the sales cycle is much longer, B2C customers do not spend a lot of time looking for analogs and comparing each function of the product they like. B2C customers usually buy products that their friends have recommended, so the sales cycle is much shorter and less stressful for both the buyer and seller.

Branding

Brand success strongly depends on establishing clear differentiation from competitors, developing brand awareness for consumers, and building trust to ensure long-term customer loyalty.

Individualism and globalization are opening up new consumer markets, new potential for brands, and greater relevance to consumers. The pursuit of success makes the B2C brand less reflective of what the customer is, but rather how she or he wants to appear to other people. Constant dialogue with the customer at various points of contact with the brand (omnichannel marketing) helps the brand know what customers expect and, ideally, exceed those expectations.

Marketing costs

The acceptable cost of marketing is highly dependent on the market niche, level of competition, brand awareness, and many other factors. In a sense, this is the art of promoting a product at the lowest cost of a marketing campaign.

Therefore, new techniques are being developed such as Growth Hacking marketing. This is a specific type of marketing approach for ensuring sustainable, scalable growth for startups, companies, and websites. The term “Growth Hacking” was proposed by Sean Ellis, who first wrote about the nonlinear approach as the key to winning a consumer’s business. It doesn't matter how the growth is achieved. There are no restrictions on communication channels and tools. Growth Hacking marketing is often combined with trying to find shorter “paths” to target clients in existing business processes (including site logic, sales funnels, etc.).

Marketing channels

Marketing channels reflect the essence of B2B ecommerce and the customer traits that must be reached for sales success.

  • Sales are made directly to the end customer.
  • Customers are impulsive and want to know all the information about a product at once.
  • Businesses are prompting an emotional connection with the product.
  • This approach incorporates a consumer’s benefits and desires.
  • The goal of potential buyers is self-improvement.
  • Consumers make purchases immediately after viewing a product advertisement or within a very short time and are looking for instant results.

– Email marketing

Email marketing for consumer brands is an effective way to reach target audiences and increase sales. To reactivate existing customers and attract new ones, marketing people use mass email newsletters or personalized promotional campaigns.

Email marketing tools are used to collect and segment a database of addresses, create and launch personalized email campaigns, automate mailings, analyze subscriber activity, and track results. Within these channels, marketers engage leads and promote them through sales funnels. However, email marketing is only effective if subscribers receive relevant emails.

– Search Engine Optimization

SEO incorporates organic search engine optimization that aims to increase the visibility of a website in unpaid search engine results. Optimization techniques and tools help companies drive traffic to their website and increase sales. For their part, search engines regularly update their algorithms so as not to give advantages to the methods of cheating and pumping the ranking of sites. Therefore, organically valid content is gaining more and more advantages over SEO texts.

– Social media marketing

Social media marketing is the promotion of a brand, service, or product on platforms such as Facebook, Instagram, YouTube, and others. With the help of these channels, brands can not only send promotional emails, but also serve notifications. Social networks for B2C companies are a channel for reaching a wide audience of potential buyers and loyal customers.

– Paid Search Advertising

This is a pay-per-click ad model. Brands pay to place digital ads that appear on search engine results pages or SERPs from Google, Yahoo, and so on. With pay-per-click advertising, the seller pays each time one of your potential leads clicks on your ad. The placement and frequency of these ads are dependent on their quality score and bid.

– Mobile marketing

Mobile marketing tools help brands reach leads and loyal customers through their mobile devices. Most often, such tools include SMS, web pushes, and advertising in mobile applications.

Since the legislation of many countries restricts the mass distribution of SMS, companies today are more likely to send browser web push notifications about sales, new content or products, interesting updates, and so on. This approach grabs the attention of visitors and increases traffic.

Mobile apps often have a dedicated area where ads are displayed. This tool is similar in concept to displaying ads on website pages.

Personalization

Personalizing the offer to the client in both B2C and B2B is one of the key trends in modern business that will determine the development of marketing in the 2020s. Satisfying the needs of a specific person, answering the request of an individual buyer, providing an exclusive service for an ordinary consumer - a few years ago, these approaches were only considered possible for VIP clients. Now individualization of the offer is a key success factor and competitive advantage.

Real-time data is becoming increasingly important, such as geolocation movements, transaction histories, and behavioral data, including actions on third-party sites and social networks. Thanks to technological advancements, the definition of the audience and the contextuality of messages have reached a new level. For example, already today, targeted advertising in Google allows you to narrow the audience segment down to a specific tenant of a particular house - and soon this will not be the limit.

Return on investments

ROI (return on investment) is an investor's income from their investment in the project. A high ROI means that profits are significantly higher than costs and everything is going like clockwork.

How much do all the efforts and costs for marketing promotion in B2C return to you? To answer this question, we need the ROI of marketing costs for your products in the B2C segment.

To calculate the ROI of client acquisition, you need to know two things:

  • How much money did you spend on ads for attracting new customers and activating existing ones in total (ad spend)?
  • How much did your company earn from this (ad revenue)?

It should be noted here that the effectiveness of marketing has an even more specialized ROMI indicator to be used:

ROMI (Return On Marketing Investment) = (ad revenue - ad spend) / ad spend × 100%.

This is a pretty simple formula. It will not be difficult for you to apply it in any area of your B2C ​​business.

B2C commerce solutions

The pioneers of B2C ecommerce in the 1990s were forced to create software themselves to enable online trading on their website. Quite often, they also ordered such development from third-party teams. When the project was handed over to the customer, these independent teams were looking for new customers who also needed ecommerce software for the website and gained further experience with them. Thus, the software took the form of a finished product called a B2B commerce platform, which could be sold to everyone on the market.

Today the market offers about a hundred ready-to-launch B2С software platforms or, as they are also called, B2C commerce solutions. As with any mature market, these platforms target retail and manufacturing businesses of varying sizes, product niches, and IT experience.

In the 2020s trend, virtually all B2C ecommerce platforms are hosted in the cloud. Among them, SaaS (Software-as-a-Service) has become more and more popular, when the vendor takes over all IT infrastructure, including hosting in the data center, software deployment, and maintenance. A client can launch an online store in the browser immediately after payment.

Since cloud hosting works on a subscription model, commerce solutions are also mostly offered with a subscription fee. This is convenient for companies, because there is no need to spend their budget on the purchase of servers, hire an administrator, and incur other costs for running IT infrastructure. All this is done by the vendor of the B2C commerce platform within the framework of the subscription.

If you want to read more about B2C ecommerce solutions, you can find many reviews on this topic on the Internet. For our part, we recommend the reviews and analytics at https://www.g2.com/categories/e-commerce-platforms.

Examples of successful B2C companies

There are many factors to consider when choosing a B2C ecommerce platform. The following review contains some great solutions for the specific needs of a B2C store.

Amazon

Amazon.com is the world’s largest online retailer operating in B2B, B2C, and C2C ecommerce segments. The company sells goods directly to consumers, allows users to sell goods themselves, and supports user-to-user transactions. Amazon B2B, also known as Amazon Business, provides purchasing solutions for registered businesses of any size, including wholesalers and manufacturers, to buy various products on Amazon.

amazon

Walmart

Walmart is considered a B2C company because the majority of its products are sold and marketed to consumers. To achieve high sales volumes in B2C, Walmart capitalizes on a customer's emotional attention when shopping offline. At the same time, like the other largest retailers, Walmart uses its IT platform to address both B2B and B2C markets.

walmart

Alibaba

Many people think Alibaba is the Chinese version of Amazon or eBay. In fact, this is not Amazon or eBay, although there are some similarities. Consider a huge holding company with many business areas. Imagine someone merging Amazon, including AWS, eBay, Shopify, Netflix, PayPal, and Citigroup into a single business empire, and then you have something similar to Alibaba.

Alibaba

eBay

eBay is one of the oldest and largest online marketplaces for buying and selling new and used goods. The online trading platform operates both in the B2C market and in the C2C market (sales from one consumer to another). By providing a platform for online trading, eBay receives a fee from the seller for listing items and a commission for selling the item.

ebay

Shopify

Shopify is one of the most popular ecommerce platforms to build a feature-rich online store without specialized web development knowledge. The solution is easy to use and comes with a huge set of store templates. Among the cons are the high price and the lack of migration options, i.e., upon canceling your Shopify account, your store will be deleted.

shopify

Magento

Magento is a free, open-source platform that allows you to create a self-hosted store with scalable architecture and powerful SEO. However, coding skills are required to customize the platform to your needs. You also have to host the Magento solution on your own server, so it’s not the best choice for a small company or a newbie.

magento

Volusion

Volusion offers a marketing emphasis with a user-friendly search engine, powerful inventory, promotion, and shipping tools. Its weaknesses include customer support and unstable hosting servers.

Volusion

Bigcommerce

Bigcommerce allows you to easily create a store with a built-in, mobile-friendly website. The solution has cost-effective plans for small online stores, which aligns with the set of features provided. The extensive enterprise-class customization would be a challenge.

bigcommerce

Ecwid

Ecwid is a popular B2C ecommerce platform used by thousands of merchants in 100+ countries. Ecwid has modules to connect with shoppers in person, via a merchant’s website, Instagram, Facebook, Amazon, or Google Shopping. It allows you to run email marketing integration and a dedicated mobile application to manage your marketing, merchandising, and sales.

Ecwid

Salesforce B2C Commerce

Salesforce B2C Commerce positions itself as a platform with unified and intelligent digital commerce capabilities. B2C Commerce is part of the Salesforce Customer 360 Customer Success Platform, with a software ecosystem that supports the customer journey across all core functions: B2B and B2C commerce, OMS, order payment, marketing, sales, and customer support.


Salesforce B2C Commerce

FAQ

What are some types of B2C models?

Most often, there are five types of online B2C business models. You can choose which one is the best for your company, but think about using a combination of all five models to target consumers online. The first type uses direct sellers as the most common model, in which you sell goods from a company website. The other four types are online intermediaries (some kinds of marketplaces), advertising-based B2C (newspaper portals, for example), community-based types (sales within a Facebook group to Instagram followers), and a fee-based type like online cinema or adult-oriented portals.

When did the B2C business model become the standard?

You can name different dates, but the role of B2C became vital at the uncertain time of the coronavirus pandemic. If not for the dedicated work of online retailers, billions of people would have had to leave their homes in search of food and medicine. Now the habit of buying everything online has remained with consumers.

Is Amazon a B2B or B2C?

Amazon is a very large marketplace where most of the goods are sold according to the B2B2C model, i.e., from thousands of small manufacturers under their own brands. Nevertheless, Amazon sells some proprietary brand products for consumers (B2C), and also a large volume of IT services for other companies on the B2B model.

What are some B2C sales examples?

Let's say your Mom loves Chanel №5 perfume and you decide to buy it online for her with home delivery. If you type “buy Chanel №5” on Google, you will get hundreds of links from various retail chains and marketplaces. Among them, there will be one that is directly from the brand's website. Placing an order there is one example of a classic B2C purchase based on the direct-selling model.

How is B2B marketing different from B2C?

Marketing is primarily about customer knowledge, so the main differences between B2B and B2C businesses are the different types of customers. B2B sells to businesses, including those that resell products further, while B2C sells directly (or through marketplaces in the B2B2C model) to the end consumer. The set of marketing practices for B2B is therefore different from B2C. For example, in B2B, direct marketing works well for most products, while in B2C, it is used only for luxury goods.

What are the technologies used in B2C ecommerce?

A hot trend in B2C ecommerce technology is the use of cloud platforms with the administrative management of an online store through a browser. This greatly simplifies the process of maintaining the store and does not require the purchase of your own servers. At the same time, very large retailers prefer to rent only room, electricity, cooling, and network connections in data centers, and install their own servers for full control of their IT infrastructure.

What is the information technology infrastructure required for B2C ecommerce?

It doesn't matter if your store is cloud-based or on-premises, it needs a server with an installed operating system and an ecommerce platform software. Of course, the server must be connected to the internet using a broadband connection.

In the cloud, this IT infrastructure is hidden from the store owner, while on-premises, you have to perform server maintenance and software updates on your own. For very small online stores that just want to try ecommerce for the first time, you can, for example, use WordPress with a WooCommerce or similar plug-in. However, it is better to choose one of the vendors of cloud B2C platforms and a subscription plan for deploying a store in the cloud.

What is a B2C ecommerce platform?

A B2C ecommerce platform is software that allows companies to manage all transactions related to the online sale of products or services. For a long time, ecommerce platforms have focused on managing the sale of physical products (which you can hold in your hands, such as a paperback book), but more and more solutions today provide functions for selling digital products (an audio book, for example) sold on a subscription model. 

Ecommerce platforms support the main business processes of the retailer, such as selling products and services, integration with CRM software and ERP systems, and having built-in internal inventory and delivery functions.

How much should a B2C company spend on marketing?

This question is not an easy one to answer and is largely dependent upon the marketer’s scope of professionalism and the discretion of the CEO as to what budget to allocate for the marketing of a product. Companies with established businesses usually spend a percentage of their annual sales on marketing and, within this budget, the marketing team performs their activities. For startups, especially in the digital economy, such as issuing cryptocurrency tokens, marketing costs can be huge. In general, marketing costs are always limited by the availability of funding.

How do distribution channels differ in B2C and B2B marketing?

Although distribution channels are in many ways similar for B2C and B2B, the difference in the type of end customers adds additional paths to B2B distribution. For example, this is the participation of suppliers in tenders held by large corporations for the purchase of products for their production or the functioning of offices. There are also online trading platforms where only companies can get access.

Which one is the biggest example of B2C?

Admittedly, Amazon is an example of one of the largest B2C business segments in the world, although some countries have their own leaders. For example, in China the largest B2C is Alibaba, with more than 1 billion consumer clients. Another of the largest international brands is McDonald's, which serves fast food to 70 million people daily.

What is B2C strategy?

The B2C strategy is as old as time, and is aimed at expanding trade to new markets, where the goal is to sell as many goods as possible at the highest prices possible. It is only thanks to competition that the market is in balance and we can buy a wide range of goods online and at reasonable prices.

What is the B2C target market?

As the name B2C suggests, the target market is consumers, both locally and internationally. In order to stand out from the competition, the trend of modern B2C is a high level of personalization that brings a first-class user experience. Knowing your target audience is the first rule of successful trading, both online and offline.

What is the difference between a B2B and B2C transaction?

In B2С ecommerce, when you visit an online store, you can see prices that are the same for all consumers. Yes, there may be targeted price options for people from certain regions, but these are special cases and not the general rule. Transactions in B2C are carried out very quickly - you enter the credit card number, click the “buy” button, and that’s all; now wait for your purchase.

In the B2B segment, everything is much more complicated. Only small purchases are allowed to be paid with corporate credit cards, so generally the payment takes longer and is more complicated. The buyer sends the invoice to the seller, where the legal staff checks this document, then finance puts the invoice in the payment queue, and only then money for the purchase comes to the bank account of your company. This is important to know for small companies, because if you sell something to a large corporation, there are often special conditions of delayed payment of 30 or even 60 days. Sure, you will receive the money, but not so quickly. This is the great difference between B2C and B2B transactions.

What is B2C retail?

Retail in the B2C ecommerce segment is usually considered online trading based on the most common direct-sales model. You go to a brand's website and buy a product or service there. Also, retail is understood as a purchase on marketplaces such as Amazon or Alibaba.

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Sergey Berezin
Marketing writer