When I wrote my predictions at the start of 2023, thoughts of the year ahead were bleak. Firms were battening down the hatches, conserving resources and anxiously waiting for the economic storm to pass. There’s no doubt that a blizzard of bad news hit businesses. Like Dorothy saw trees, chickens and houses fly past her in a twister, firms were swerving rising interest rates, costs and inflation, from almost every angle. In January last year, 83% of small businesses could not plan beyond 12 months. They were frozen in survival mode.
However, as time went on, we noticed companies becoming braver. A lot braver. Though the storm didn’t cease – if anything it seemed to get worse – we saw businesses come out fighting. We also noticed a huge rise in businesses working with us to offer payment terms to their B2B customers.
There’s an unexpected optimism in the air. Although domestic demand decreased by 18% this summer, around seven in ten British businesses expected turnover to increase or stay the same.
B2B customers want more than just online experiences
The change of mood seemed to begin after May. It’s as if firms accepted the dire economic situation, rolled up their sleeves and got on with the job of helping their customers in a variety of different forms. In 2023, this means a strong blend of online and offline services.
In some industries, telephone sales are the norm. Rather than making an order online, many businesses prefer to pick up the phone. To us, it was a no-brainer to create a Buy Now, Pay Later (BNPL) portal which could be used by a sales representative. As they converse with their B2B clients, they can easily punch in a few details and offer instant payment terms. It’s just as seamless as using our trade credit solution in an online checkout, but more in line with the needs and expectations of certain customers. Inclusive services like this are becoming increasingly important within the world of B2B sales.
Another great example is Maison&Objet, which recently expanded its world-famous trade fair into an online B2B marketplace. Rather than simply offering an e-commerce site, the brand presents customers with a theme park of on-and-offline options. Buyers can access masterclasses, learn about the creators, attend webinars or panels, get design inspiration, see the items as part of a collection, learn about where they should be used, visit in person, arrange meetings and – of course – access payment terms. Wrapping up customers and suppliers in a full spectrum of services doesn’t just create better experiences, but it also keeps Maison&Objet extremely relevant.
As 2023 progresses, it’s clear that B2B customers want so much more than the standard e-commerce of yesterday. This could include telephone sales, social media commerce, content marketing, in-person events or webinars to name a few. Creativity, passion, and an eye for creating memorable journeys is essential in this rapidly evolving world.
B2Bs turn to BNPL for growth
As B2B merchants strive to succeed in 2023, many plugged into BNPL. For most B2Bs, providing customers with flexible payment options became essential, not just for survival, but also for growth.
Since adopting a digital trade credit solution, our merchant and marketplace partners have seen sales frequency jump by 24% per month. They’ve also found that business customers spend more per transaction (+30%) and are more likely to convert (+40%).
But trade credit is nothing new: it was already widespread in the Roman Times, thousands of years ago. For millennia, it has been part and parcel of B2B trade. Today the only difference is how it’s delivered. To grow, businesses need to adopt modern, scalable methods of trade credit. Over 2023 so far, we’ve seen a flurry of businesses ditch the status quo and adopt these new tools with gusto.
Powering up payment terms
Doing the best for customers means constantly improving and adapting. In 2023, we evolved our own approach at Hokodo, and started looking beyond lending solutions. In June, we gained a European payments license and launched our Pay Now solution, giving buyers even more payment flexibility and streamlining operations for merchants.
Offering a full suite of services at every stage of the customer journey is crucial for growth… So why would you stop at the checkout? As we move through the final quarter of 2023, we’ll continue to support buyers and sellers in the B2B economy with payment terms that are instant and easy-to-access.
Missed our 2023 predictions? Check them out here.