Hokodo's 2023 predictions: Payment convenience will conquer all
At the start of 2023, we published an ebook setting out Hokodo’s predictions for B2B in the new year. In this blog post, our VP of Marketing, Lucy Heavens, dives into her prediction that payment convenience will be of utmost importance this year.
There is no denying that wallets are tightening over the next year. To thrive in this competitive environment, merchants will need to offer their B2B buyers every possible convenience. This is especially true for the rising wave of Gen-Z and Millennial buyers who cringe at the idea of sales over the phone. They want a seamless digital experience, and they want it now.
Today, small businesses struggle with unsuitable payment terms, and they’re often required to pay for their stock or materials upfront. This system isn’t economically sustainable. I predict that in 2023, B2B checkouts will undergo a radical transformation or get hopelessly left behind.
1 | Business owners will want the same payment experience as consumers
In our private lives, we can order our weekly grocery delivery with just a few taps of a smartphone. Everything is right there, personalised, and effortless. With the rise of BNPL services, we can receive products within 24 hours but pay for them in 30 days, interestfree.
So, doesn’t it seem ludicrous that when we arrive at work and place orders for our business, we need to pick up the phone to call a sales rep? It is for the 66% of Millennials and 61% of Gen-Zs who would much prefer an online self-service option.
Businesses today don’t want to spend days or weeks waiting to see if they’ve been approved for a trade credit account. They don’t want to waste money with a corporate credit card either.
B2B buyers should be able to use trade credit in the same way that consumers can access BNPL – in just the click of a button. In 2023, businesses will turn away from the old-school model and force digital change, whether their suppliers are ready or not.
By 2025, it’s estimated that 80% of all B2B interactions will be online. We’ve already seen a huge number of businesses shift to the e-commerce model. I predict we’ll witness much more over the coming year.
2 | Omnichannel B2B platforms will surge ahead
Now, more than ever, B2B buyers are looking for a smooth experience across multiple channels. And they all need to be accessible 24/7, from a smartphone.
McKinsey found that B2B buyers use around ten different channels for a single purchase. Buyers want to watch brand videos on YouTube, check out the values on Instagram, read reviews on Trustpilot, connect with merchants on LinkedIn, compare the product on a marketplace, discover more from online magazines, dip into the company blog and maybe buy from a marketplace, app, or website. The more integrated, the better. Jumping from one channel to another should be an effortless and natural part of the journey.
Brands offering this in 2023 and beyond will be richly rewarded. According to one study, those with three or more channels benefit from an incredible 287% increase in purchases.
3 | A bad checkout experience will turn customers away
The seamless customer experience doesn’t stop with a full basket. B2B buyers will expect the checkout process to be just as effortless. This should be the most straightforward part of the purchasing process. After all, 29% of people worldwide shop online – rather than in store – precisely because they expect the checkout experience to be quicker.
In the words of Finextra, “The checkout is so important because its quality can make or break a purchase”. This is the lasting impression B2B buyers will form.
But there’s a problem. 61% of B2B buyers today are not happy with the checkout and invoicing stage on B2B platforms. For 2023, I predict the payment stage will seriously impact buyers’ overall view of the company.
4 | Digital trade credit will drive sales in B2B
I find it strange that B2B brands don’t make a bigger deal out of their trade credit offerings. 53% of the UK’s small businesses struggle with cash flow, meaning that they can’t buy the materials they need. Small businesses are losing a painful £26,000 a year on average just because of this. Research from the US shows that 82% of failed businesses went down due to cash flow issues. Clearly, it’s a serious problem. SMEs desperately want access to materials, but 52% believe that high street banks wouldn’t offer them a loan.
It’s a nightmarish vicious cycle, but one that trade credit can break in just a few seconds. Imagine the relief and loyalty small businesses will feel knowing that they can purchase what they need with generous payment terms. What’s more, our research shows that B2B buyers are inclined to spend 30% more when there is a trade credit option available while their purchase frequency increases by 24%. It’s a win-win for B2B merchants as well as buyers.
In 2023, I predict digital trade credit will offer a lifeline to SMEs, helping them to stay in business and grow.
5 | B2B firms with a poor e-commerce journey will suffer
On the other hand, B2B firms that do not offer seamless and flexible payment terms are likely to fall dangerously behind.
According to one study, 85% of B2B buyers would ditch a supplier for their competitor if their e-commerce journey wasn’t satisfactory, while 72% are already frustrated. It’s clear that time is running out for firms that don’t improve their checkout journey.
B2B buyers feel so strongly about this that 81% would even be willing to pay more for a product if the e-commerce experience was better.
Payment experiences matter. Firms with a poor checkout will lose relevance and… well… check out.
Hesitate now, regret later…
B2B firms have an amazing and simple way to offer clients competitive invoice terms, while receiving instant payment themselves. It’s a proven concept, with B2B buyers overwhelmingly preferring this option. Suppliers with a digital trade credit service at the checkout see conversion rates 40% higher than those without. What’s more, buyers love it so much that they will purchase 30% more and 24% more often.
When merchants have the possibility to future-proof their service, reduce risk and please their clients in this way, why wouldn’t they include a digital trade credit solution in their checkout?
Want to read more about our predictions for 2023? Download our ebook jam packed with exclusive insights.