How a Hybrid E-Commerce Model Can Benefit Your Business

October 2, 2021 by Christine

Companies such as HP, Tom’s, and Steelcase have experienced a lot of success, and that’s primarily because of their willingness to expand into new markets. And though they operate in diverse industries, there’s one common thread among them—they all utilize a hybrid e-commerce model.

Each company started with one business model (B2B or B2C) and successfully expanded into the other. They now serve both consumers and businesses (hybrid) and enjoy massive growth as a result.

What Is a Hybrid E-Commerce Model?

Business growth is not always linear (i.e., get more sales by increasing marketing spend) where you’re targeting the same people with the same products, and your growth is limited to a specific customer type.

When organizations think outside the box, they devise ways to expand their market to widen their customer base. Some brands continue to target the same type of consumer, but they move into different categories. Or they target new consumers and create new brands using their brand equity as a catalyst for growth. We talked about this in our article on brand extension.

Yet, other companies cross over into other markets. B2B companies might explore the B2C model to expand and get better acquainted with their industry and the people their customers serve. B2C companies might want a larger slice of the market and expand into wholesale markets. 

This type of crossover, when selling online, is what we refer to as a hybrid e-commerce model. 

Hybrid e-commerce allows companies to expand their audience and increase revenue without investing too much time and resources into creating entirely new brands. Hybrid e-commerce also benefits brands in other ways…

3 Benefits of Adopting Hybrid E-Commerce

There’s a reason successful companies choose a hybrid e-commerce model. Expanding into new markets comes with numerous advantages. Below are some of the benefits of adopting hybrid e-commerce.

1) Strengthen Relationships 

When B2B companies expand into B2C, it helps them understand their customers’ target audience at a deeper level. B2B companies have the opportunity to form relationships with consumers and gather their own data to improve the customer experience and offer better products to their business customers. The expansion also provides new revenue streams to B2B companies that can solidify their market standing.  

B2B companies can also create consumer-focused e-commerce stores that give customers a more personal experience. 

2) Scale Faster and Cheaper

E-commerce businesses can scale faster without reinventing the wheel. For example, a B2C e-commerce retail company that expands into wholesale won’t need to invest money into creating a new brand or products. They can increase their revenue potential by leveraging their existing products to reach new markets. 

Many brands in multiple industries sell their products to businesses wholesale (B2B) and sell directly to consumers (B2C). Just think about any brand you’ve come in contact with over the last week. Dell, HP, Samsung, Nike, virtually every food item you pull from the grocery store shelves, and more practice hybrid commerce. 

3) Expand Your Customer Base

B2C e-commerce companies can also adopt hybrid e-commerce methods and expand their customer base by merging into the B2B industry. As mentioned before, scaling from B2C to B2B is fast and doesn’t require a hefty investment. In addition, it also widens their market and opens them up to ongoing revenue streams.  

The Differences between B2B and B2C Commerce 

Before e-commerce became popular, it wasn’t common for companies to change and adopt new business models. It was too complicated, time-consuming, and not cost-effective. Reaching new markets is much easier with the internet, and there’s a lower barrier to entry. E-commerce provides numerous opportunities for companies to expand into new verticals and capture new audiences. 

As mentioned in the last section, B2B companies can use their websites to communicate directly with consumers and learn and expand. B2C companies can use e-commerce apps and platforms such as WooCommerce to sell to consumers and businesses simultaneously. (The cost of setting up a WooCommerce store may not be nearly as much as some business owners think.)

There’s no better time to expand your business. But before you change your model, it’s helpful to understand the differences between B2B and B2C commerce. Aside from B2B companies catering to businesses or organizations and B2C companies targeting the individual consumer, there are a few other significant differences.

1) Sales Cycle Variations

B2C e-commerce sales cycles are short, mainly because products are inexpensive and there’s less at stake for consumers. In B2C e-commerce, an interested consumer visits a website and can make a purchase immediately. There’s also only one person involved in the decision-making process (the consumer), which is why the sales cycle is shorter than B2B.

With B2B, the stakes are higher. You have multiple decision-makers to convert and a longer purchasing journey from interest to decision. Decision-makers also focus more on numbers and more analytical factors to make their decision, in contrast with B2C consumers who purchase primarily on emotion. 

2) Order Volume

Inexpensive products lead to higher order volume. B2C companies target consumers with much lower purchasing power than businesses, so they snatch up lower-priced products at a higher velocity. This enables B2C companies to order products at a higher volume.

B2B companies offer higher-priced products and services that focus on a specific industry. These premium offerings attract a smaller niche of people, which results in a smaller order volume. 

3) B2C to B2B Logistics

If you’re a B2C company that wants to adopt hybrid e-commerce and expand into B2B, take note of how your business dealings will change when servicing businesses. Your business customers might require estimates, purchase orders, and more time to decide. Depending on your industry, you might need to supply customers with a product catalog and unique shipping parameters. Plus, the government and local authorities will view your business differently, which might affect your tax status and contributions. 

4) Customer Acquisition Methods

E-commerce marketing strategy varies among the business models, specifically in how each acquires customers. B2C companies focus on ongoing customer acquisition but with a heavy reliance on bringing in new customers. Their markets are broader, and their customers have a lower lifetime value (revenue generated from one customer over a lifetime) than B2B. With a smaller target market, B2B companies focus heavily on sales from existing customers. They take advantage of the fact that it’s less costly and challenging to upsell to an existing customer than to attract and close a new one. 

Hybrid E-Commerce: What You Need to Know

A hybrid e-commerce model gives businesses a strategic opportunity to expand their markets and customer base without reinventing the wheel. 

In this article, we talked about what a hybrid e-commerce model is, outlined the benefits it offers, and noted the differences between B2B and B2C that are critical to understand before you expand your business. We discussed…

• What is a hybrid e-commerce model?
• 3 benefits of adopting hybrid e-commerce (strengthen relationships, scale faster and cheaper, and expand your customer base)
• The differences between B2B and B2C (sales cycle variations, order volume, logistics, and customer acquisition methods)

If you would like more information on how you can expand your brand by adopting a hybrid model, we’d be happy to help! Contact us via live chat here on our website.  

And if you’d like to find out if your current marketing is working before you expand, take advantage of our FREE Marketing Audit and Review. You’ll get a full website and SEO review, social media evaluation, critical keyword rankings, brand messaging review, and more!

Filed Under: Business Tips, E-Commerce & Sales Tagged With: B2B selling, B2C selling, Customer Acquisition, growth