Key Takeaways:
- A joint report by Hokodo, OroCommerce, and Greenwood Consulting unveils that 83% of B2B buyers will abandon an e-commerce purchase if no payment terms are offered.
- Payment terms are deemed critical for the success of businesses in 2024, with 79% of buyers asserting their importance.
- The report identifies three key barriers hindering B2B merchants from offering trade credit, urging for innovative solutions to retain and attract customers.
In a groundbreaking revelation shaking the foundations of B2B e-commerce, a joint report by Hokodo, OroCommerce, and Greenwood Consulting has unearthed a startling truth: payment terms are the make-or-break factor for 8 out of 10 B2B buyers. This eye-opening discovery underscores the pivotal role of payment terms in shaping purchasing decisions and highlights the urgent need for merchants to adapt to evolving buyer expectations in the digital landscape.
Payment Terms: The Holy Grail of B2B Transactions
The report, based on insights gathered from 500 business buyers across the UK and the EU, paints a clear picture of the significance of payment terms in the B2B e-commerce ecosystem. A staggering 83% of respondents revealed that they would abandon an e-commerce purchase if no payment terms were offered at checkout, emphasizing the non-negotiable nature of this requirement for buyers.
Commenting on the findings, Louis Carbonnier, Co-founder, and President of Hokodo, emphasized the critical role of payment terms in driving successful B2B transactions. He stated, “B2B merchants and marketplaces are struggling to deliver the e-commerce experience that buyers expect. The findings of our report highlight the challenges faced by e-commerce buyers and provide sellers with essential guidance needed to improve their service.”
Identifying Barriers to Offering Trade Credit
Despite the undeniable importance of payment terms, the report identifies three significant barriers that may prevent B2B merchants and marketplaces from offering trade credit effectively. Firstly, the anonymity and scale of e-commerce pose challenges in determining buyer trustworthiness, making it risky to offer trade credit online. Secondly, the complexity of offering trade credit, encompassing credit scoring, fraud detection, payment processing, insurance, and collections, presents logistical challenges for merchants. Lastly, trade credit can strain cash flow when merchants extend credit off their balance sheets, adding financial pressure to businesses.
Christopher Gee, UK Chapter Lead of the B2B eCommerce Association, stressed the necessity for seamless payment journeys in B2B transactions. He remarked, “A seamless online payment journey is not simply a ‘nice-to-have’ for B2B buyers but a critical factor when choosing and reviewing a supplier. Offering a combination of easy-to-use payment terms and relevant settlement methods is essential for maintaining loyal customers.”
Navigating Towards Solutions: Recommendations for B2B Sellers
In light of the challenges identified, the report offers a series of recommendations for B2B sellers to enhance their checkout and user experience, ultimately reducing customer churn due to inadequate payment offerings. By implementing innovative solutions and streamlining payment processes, merchants can better cater to the evolving needs of B2B buyers and differentiate themselves in a competitive market.
In conclusion, the joint report sheds light on the pivotal role of payment terms in B2B e-commerce transactions and the challenges hindering merchants from meeting buyer demands effectively. As businesses strive to navigate the complexities of the digital landscape, addressing these challenges and embracing innovative solutions will be paramount in fostering customer loyalty and driving sustainable growth.
For further insights, download the full report from Hokodo.
About The Definitive Guide to B2B E-commerce Buyer Demands in 2024 Report: The survey, conducted by Hokodo, OroCommerce, and Greenwood Consulting, provides comprehensive insights into the procurement habits and expectations of 500 B2B buyers across the UK and the EU. Focused on payment terms and the checkout experience, the report offers invaluable insights for B2B sellers seeking to optimize their e-commerce offerings.
About Hokodo: Hokodo is the leading provider of flexible payment terms for European merchants and marketplaces, offering innovative solutions to streamline trade credit management. Backed by Lloyd’s of London, Hokodo empowers businesses to access payment terms while mitigating risk and ensuring peace of mind.
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