In a world where consumers are spoilt for choice, many are looking for ways to simplify their decision-making process. This is why the promises of personalisation were so appealing to consumers (even though many endeavours are still falling flat) - the curation of fewer options based on what is relevant to me, my needs and my tastes helps to shortcut decision making. But now there is a new kid in town that is fundamentally changing the way consumers make decisions, or in some cases, not having to decide at all. And I’m not talking about genAi!
In a recent study, IPG coined the phrase “invisible commerce” to describe the rising trend of consumers using buy-again, subscriptions, or auto-repurchase to shortcut many shopping decisions. Through these features and ways to buy, the commerce steps just disappear and become invisible to the consumer as they are essentially shopping on auto-pilot. This shift in the way people buy online is fundamentally impacting future growth in share for brands, both positively and negatively and many may not even realise it.
The growth of invisible commerce in B2C and strategies to combat and leverage the opportunity
If you ever buy through eCommerce, you are probably one of the many consumers that are turning to buy-again, subscription or re-ordering features that reduce friction and decision-making.
According to the IPG Commerce Consumer Research study, 65% of US consumers use buy-again features, which rises to 71% when we factor in consumers who also use subscriptions for ease of purchase. It is a frightfully high number but comes as little surprise as regular purchasing is more and more automated as platforms seek to drive the customer through the funnel in the quickest time possible with the least amount of friction.
Whilst loyalty experts will celebrate the ability to drive unrivalled stickiness through these and other mechanisms, the challenge for CPG/FMCG brands is that these features are essentially bypassing the traditional funnel, making it harder for brands to drive discovery and consideration and interrupt the purchase process. On the flip side, for those brands who are the regular “go-to” it can power and accelerate growth in market share.
Invisible commerce likely to be even more disruptive in B2B
One of the distinct differences between B2B and B2C eCommerce is the nature of repeat purchase. According to the recent 2023 Future of B2B Shopping Report by Wundermann Thompson, 50% of B2B purchases are repeat purchases, with Australian B2B buyers the highest repeat purchasers of major markets globally (at 57%) and Chinese buyers the lowest (36%). The study also showed that those with the smallest budgets are less likely to repeat orders (45%) while those with the biggest budgets are more likely to repeat purchases (52%).
And when it comes to the best place to repeat purchases, online wins (in all areas) with 54% of businesses surveyed preferring to do it online.
Whilst B2B eCommerce today lags maturity of B2C eCommerce, over the next 7 years it is anticipated the B2B eCommerce market will triple in value. This growth will be powered by the generational shift of the workforce. As more transactions within the eCommerce space move to repeat purchases, many, particularly lower involvement purchases will be automated, where the replenishment will occur via direct machine-to-machine integration between business and sellers.
In addition, sellers will automatically replenish the stock or items on behalf of the buyer based on an agreed interval (e.g. subscription). This means that no human intervention is required which creates a heightened threat and opportunity in the B2B space.
How to mitigate risk and maximise the opportunity of invisible commerce
The invisible commerce trend presents both risks and opportunities for retailers and FMCG | CPG brands alike across the B2C and B2B commerce space. So how can brands best prepare?
For retailers
Feature innovation to drive stickiness and reduce friction: For retailers, particularly those in grocery, health & beauty as well as in food service, the biggest risk is loss of share as competitors maximise invisible commerce through feature enhancements as well as subscription-based offerings. Retailers need to consider how their experience (onsite and via comms) should evolve to reduce friction and drive repeat purchases of everyday items to maximise the invisible commerce opportunity. This is a continuous evolution as opposed to a one-off innovation as the market continues to develop.
Determine if subscriptions should be part of your service offering: Retailers also need to consider the validity of subscription-based solutions for certain categories of products. Replenishment-type products are ripe for the picking, and present material losses if DTCs, marketplaces and other retailers crack the subscription code for the item or category.
For CPGs & FMCGs
Understand the key moments of interruption: For CPGs and FMCG’s some of the biggest moments for interruption are items being out of stock when the order is placed or at the point of fulfillment. These are prime opportunities for competitor brands to make their way into the basket and the hands of your consumers. This makes inventory management even more important than in in-store environments, as once they are in the basket the invisible commerce features fuel repeat purchases over time. Other key moments of interruption can also be when consumers are considering adjacent categories – which makes visibility paramount through retail media and other mechanisms.
Quantify the value of invisible commerce: Brands are still heavily investing in campaigns to drive short-term uplift. However, the acquisition of new customers should be the aim of the game online as invisible commerce impact grows. Quantifying the value derived over time once a product is in the basket will change how investment works for brands.
B2B eCommerce innovation: CPGs and FMCGs firmly focused within the B2B market have a unique opportunity to build their eCommerce strategy around the invisible commerce opportunity. As B2B eComm is still much more nascent than B2C, brands entering the space have the opportunity to think and innovate in and around the “repeat purchase” customer to deliver convenience and create hooks to lock the customer in.
Arktic Fox is partnering with an array of brands to build and define a strong digital shelf strategy.