B2B Becomes Serious Business to Retailers

Retailers are embracing the business-to-business (B2B) boom. A desire to own a stake of an exchange is even prompting collaboration among unlikely partners. Having a stake in the exchange seems to be a turning point for many retailers.
Retailers are joining forces for B2B exchanges now, even if it may take some time to get their marketplaces up and running. Group investments by retail's heavy bats are creating large marketplaces capable of generating a lot of activity very quickly once they are live.
Uninterested in lining their competitor's pockets unless they will be getting a piece of the pie too, the big retailers don't just want to join, they are looking to own a stake in their B2B marketplaces. Lured by the prospect of transaction fees from the activity of B2B marketplaces, most of the major retailers in the U.S. and Europe have already hooked up as equity partners in one of the two largest exchanges announced to date.
Sears' and Carrefour's GlobalNetXchange and the big eleven's WorldWide Retail Exchange, are prompting many retailers from a variety of retail categories come on board. The savings expected from the first few years of the WorldWide Retail Exchange are expected to be approximately $100 million (USD) and to quickly exceed the cost of creating the exchange.
Retailers have jumped on B2B exchanges and created their own because it is in their best interests. Better than participating in a marketplace run by a consortium of vendors or even a neutral third party, being part owner gives the retailers more of a say in the workings and ultimately more cost savings. Collaborating with other retailers can drive vendor prices down. The savings involved has been a crucial point for getting rivals to work together.
The retail industry looking to become more efficient has just finished a cycle of narrowing suppliers. Business-to-business marketplaces can reopen the retail market to vendors who have been shut out over the last decade because they didn't use EDI. Consolidating through an exchange also allows a retailer to work with more vendors without losing the efficiency gained from having less suppliers.
B2B marketplaces have tremendous potential to change the way most buyers do their jobs in both large and smaller companies. It is easy to see a half dozen large retailer led exchanges with smaller retailers belonging to multiple B2B sites while the large retailers stick to the one where they have an equity stake.
In time, we may also see a division in retail B2B sites along category lines, with specialized segments having unique smaller exchanges. While retailers who sell hardware and those that sell childrenswear can both use a site like GlobalNetXchange, that covers a gamut, the smaller retailers may eventually find more personalized service and enjoy collaboration features in B2B marketplaces dedicated to their specialty.
Some head-butting is inevitable as the B2B market grows. Buyer operated exchanges like GlobalNetXchange and WorldWide Retail Exchange are growing placing seller operated exchanges in direct competition. The retail and grocery industry marketplace launched via the Grocery Manufacturers of America brought together fifty of the world's largest food, beverage, and consumer goods manufacturers, suppliers for many of the members of the two large retailer-led exchanges. Of course the manufacturers may be willing to hook up with the retailers' exchanges and vice versa, but this does not have the efficiencies of a single point for all transactions.
The future of business-to-business on the Internet is likely to result in a series of interconnected exchanges. Transactions will take place inside the "home" exchange if possible, then if not, the exchange of the future will likely route through other connected exchanges until the transaction can be completed. Collaboration between exchanges is also likely to become commonplace. Retailer and vendor led marketplaces working together are also less likely to run into the antitrust issues than a collection one or the other would when trying to influence pricing.
Whatever the future, gaining a stake in the marketplace insures the retailer a good seat at the table whatever may happen later on.