E-Commerce Revenue From B-to-B to Hit $1.1 Trillion by 2020

Petroleum, Pharmaceutical and Electronics Industries Are Largest in E-Commerce

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Driven largely by business buyers' preferences to buy more products and services online -- as well as improved e-commerce technologies -- b-to-b e-commerce sales in the U.S. will grow from $780 billion this year to an estimated $1.1 trillion by 2020, according to a new report from Forrester Research.

The report, "U.S. B2B E-Commerce Forecast: 2015 To 2020," projects that e-commerce will account for 12.1% of all b-to-b sales in the U.S. in the next five years, up from 9.3% this year.

"There are two types of b-to-b buyers: You have empowered end users who buy their own travel, printer toner for their home office, etc. and charge it back to the company, then you have professional buyers -- procurement buyers -- who are buying in mass," said Andy Hoar, principal analyst at Forrester and author of the report.

"The professional buyers are using e-procurement systems from companies like SAP and Ariba, and they have gotten better," he said.

Forrester found that 74% of b-to-b buyers research at least half of their work purchases online, and 30% of b-to-b buyers complete at least half of their work purchases online. By 2017, 56% of b-to-b buyers will complete at least half of their work purchases online, according to the report.

"We are also seeing companies moving offline-only customers online, because it's less expensive to support them," Mr. Hoar said.

He noted that while it may cost a b-to-b company pennies to support an online sale, it can cost from tens to hundreds of dollars per offline sale in either sales commissions or salaries paid to sales reps or customer support people.

The top industries in terms of total e-commerce revenue, today and in the near future, are petroleum and pharmaceutical, Forrester found.

"The way in which people buy medical supplies has changed," Mr. Hoar said. "A lot of these purchases have to be tracked closely for reporting purposes, so there has been a mass migration from a paper- or fax- or home-based ordering system in the pharmaceutical industry to a trackable electronic ordering system."

One of the fastest-growing segments in b-to-b e-commerce is electronics, particularly among engineers who are buying products online, according to the report.

"Engineers tend to be early adopters, and they appreciate the ability to order online," Mr. Hoar said.

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