B2B E-Commerce - UK - March 2019
Overview
 
What you need to know 
E-commerce is a route to market for both consumer and B2B products and services. The focus of media attention tends to centre on the B2C sector, and the disruption caused in the retail sector in particular, but the B2B market is almost two and a half times larger than the B2C sector – valued at £465.2 billion in 2018, compared with the £186.2 billion B2C market. However, in the B2B market there are two distinct activities, with 67% of the B2B e-commerce market accounted for by Electronic Data Integration (EDI), a well-established sector. If only website e-commerce is considered, the B2C market is larger than the B2B market of £154 billion. The comparative position of the two sectors is changing, with the website sector of the entire e-commerce market currently most buoyant.

The overall growth of e-commerce was strong in 2018 at 11% - above the overall growth of the UK economy - but the sector remains under-developed. According to official statistics for 2017, only 10.8% of companies made e-commerce sales, though this statistic is skewed by the inclusion of micro companies. If these firms are excluded, the penetration of all companies making e-commerce sales rises to 22%. At the same time, 32% of all businesses made purchases online, rising to 52.9% if micro companies are excluded, suggesting considerable further potential for the development of e-commerce as a route to market.

Covered in this Report
E-commerce covers the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet. Statistics in this report cover business-to-business (B2B) e-commerce and business-to-consumer (B2C) activity, but exclude consumer to consumer (C2C) sales.

EDI is a document standard which, when implemented, acts as common interface between two or more computer applications in terms of understanding the document transmitted. It is commonly used by large companies for e-commerce purposes, such as sending orders to warehouses or tracking their order. It is more than mere e-mail; for instance, organisations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards.

In 1996, the National Institute of Standards and Technology defined electronic data interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media." It distinguishes mere electronic communication or data exchange, specifying that "in EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data is treated as one or more data elements of an EDI message and not normally intended for human interpretation as part of online data processing."

Before using EDI, trading partners must set up a trade agreement to define the parameters of EDI. Each partner in an EDI trade agreement must independently determine a method to translate internal data to and from EDI formatted messages. Each must agree on the communications media and arrange the method for transmitting information. This may involve several methods, such as a dedicated communications link, a virtual area network (VAN) or the internet. Each must provide for system recovery in case of failure or error, security and timely response.

There are several advantages to using EDI:

●	EDI speeds the process and improves the accuracy of getting information into the user's computer system. The traditional connections between businesses are telephone and mail. Both can be slow and require human intervention. EDI uses direct links to the computer system to minimize the transmission delay.
●	Direct links also eliminate the need for transcribing data into the computer. This reduces errors and saves time.
●	EDI solves business problems, offers cost savings, and strategic benefits, and provides a competitive edge.
●	EDI helps organisations improve communications and increase competitiveness, efficiency, and customer service by cutting costs and maximizing productivity and profitability.
●	EDI can lower costs by reducing inventory investments by timelier ordering. EDI can enable better business practices, such as "just in time" stocking. If point of sale data is sent directly to vendors, inventories can be monitored and orders automatically generated to minimize overstocking.

Omni-channel marketing is a multi-channel approach to sales which seeks to provide the customer with a seamless shopping experience, whether the customer is shopping online from a desktop or mobile device, by telephone, or in person at a store.