Business-to-consumer (B2C) refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.

B2C became immensely popular during the dotcom boom of the late 1990s when it was mainly used to refer to online retailers who sold products and services to consumers through the internet.

As a business model, business-to-consumer differs significantly from the business-to-business (B2B) model, which refers to commerce between two or more businesses.

Business-to-consumer refers to the process of businesses selling products and services directly to consumers, with no middle person.
B2C typically refers to online retailers who sell products and services to consumers through the internet.
Online B2C became a threat to traditional retailers, who profited from adding a markup to the price.
However, companies like Amazon, eBay, and Priceline have thrived, ultimately becoming industry disruptors.

Business-to-consumer (B2C) is among the most popular and widely known sales models. Michael Aldrich first utilized the idea of B2C in 1979 and used television as the primary medium to reach out to consumers.

B2C traditionally referred to mall shopping, eating out at restaurants, pay-per-view movies, and infomercials. However, the rise of the internet created a whole new B2C business channel in the form of e-commerce or selling goods and services over the internet.

Although many B2C companies fell victim to the subsequent dotcom bust as investor interest in the sector dwindled and venture capital funding dried up, B2C leaders such as Amazon and Priceline survived the shakeout and have since seen tremendous success.

Any business that relies on B2C sales must maintain good relations with its customers to ensure they return. The company must regularly review its marketing for good performance and adjust it when necessary.

Business-to-business (B2B) marketing campaigns are geared to demonstrate the value of a product or service. Companies that rely on B2C usually try to catch the eye of the consumer and elicit an emotional response to their marketing.

B2C Storefronts vs. Internet Retailers

Traditionally, many manufacturers sold their products to retailers with physical locations. Retailers made profits on the markup they added to the price paid to the manufacturer. But that changed once the internet came. New businesses arose that promised to sell directly to the consumer, thus cutting out the middle person—the retailer—and lowering prices. During the bust of the dotcom boom in the 1990s, businesses fought to secure a web presence. Many retailers were forced to shut their doors and went out of business.

Decades after the dotcom revolution, B2C companies with a web presence continue to dominate over their traditional brick-and-mortar competitors. Companies such as Amazon, Priceline, and eBay are survivors of the early dotcom boom. They have gone on to expand upon their early success to become industry disruptors.

B2C in the Digital World

There are typically five types of online B2C business models that most companies use online to target consumers.

1. Direct sellers. This is the most common model in which people buy goods from online retailers. These may include manufacturers or small businesses or simply online versions of department stores that sell products from different manufacturers.

2. Online intermediaries. These are liaisons or go-betweens who don’t actually own products or services that put buyers and sellers together. Sites like Expedia, trivago, and Etsy fall into this category.

3. Advertising-based B2C. This model uses free content to get visitors to a website. Those visitors, in turn, come across digital or online ads. Large volumes of web traffic are used to sell advertising, which sells goods and services. One example is media sites like HuffPost, a high-traffic site that mixes advertising with its native content.

4. Community-based. Sites like Meta (formerly Facebook), which build online communities based on shared interests, help marketers and advertisers promote their products directly to consumers. Websites typically target ads based on users’ demographics and geographical location.

5. Fee-based. Direct-to-consumer sites like Netflix charge a fee so consumers can access their content. The site may also offer free but limited content while charging for most of it. The New York Times and other large newspapers often use a fee-based B2C business model.

B2C Companies and Mobile

Decades after the e-commerce boom, B2C companies are continuing to eye a growing market: mobile purchasing. With smartphone apps and traffic growing year-over-year, B2C companies have shifted attention to mobile users and capitalized on this popular technology.

Throughout the early 2010s, B2C companies were rushing to develop mobile apps, just as they were with websites decades earlier. In short, success in a B2C model is predicated on continuously evolving with consumers’ appetites, opinions, trends, and desires.

B2C vs. Business-to-Business (B2B)

As mentioned above, the business-to-consumer model differs from the business-to-business (B2B) model. While consumers buy products for their personal use, businesses buy products to use for their companies. Large purchases, such as capital equipment, generally require approval from those who head up a company. This makes a business’ purchasing power more complex than that of the average consumer.

Unlike the B2C business model, pricing structures tend to be different in the B2B model. With B2C, consumers often pay the same price for the same products. However, prices are not necessarily the same. Businesses tend to negotiate prices and payment terms.

What Is Business-to-Consumer and How Does It Differ From Business-to-Business?

After surging in popularity in the 1990s, business-to-consumer (B2C) increasingly became a term that referred to companies with consumers as their end-users. This stands in contrast to business-to-business (B2B), or companies whose primary clients are other businesses. B2C companies operate on the internet and sell products to customers online. Amazon, Meta (formerly Facebook), and Walmart are some examples of B2C companies.

What Is an Example of a Business-to-Consumer Company?

One example of a major B2C company today is Shopify, which has developed a platform for small retailers to sell their products and reach a broader audience online. Before the advent of the internet, however, business-to-consumer was a term that was used to describe take-out restaurants, or companies in a mall, for instance. In 1979, Michael Aldrich further utilized this term to attract consumers through television.

What Are the 5 Types of Business-to-Consumer Models?

Typically, B2C models fall into the following five categories: direct sellers, online intermediaries, advertising-based B2C, community-based, and fee-based. The most frequently occurring is the direct seller model, where goods are purchased directly from online retailers. By contrast, an online intermediary model would include companies like Expedia, which connect buyers and sellers. Meanwhile, a fee-based model includes services such as Disney+, which charges a subscription to stream their video-on-demand content.

B2C marketing refers to the approach businesses take to directly sell products and services to consumers. This method involves utilizing targeted digital campaigns, personalized communication, and active social media engagement, with a focus on addressing personal needs and interests to effectively drive sales.

While a business will likely conduct extensive research before investing in new software, office space, or a large acquisition with another business, B2C transactions are frequently more impulsive and instantaneous.

Consumers generally seek out goods and services based on an immediate need, and make purchases faster, with less research and due diligence than a business would conduct. This grants B2C marketers a much smaller window of opportunity to influence consumer behavior.

For these reasons, successful B2C campaigns typically trigger emotional reactions or responses, while B2B campaigns focus on offering immediate value. Understanding these differences and making the appropriate changes to your B2C marketing strategy will improve your outcomes.

Businesses that focus on B2C marketing observe trends closely, research their customers’ purchase habits, and closely monitor their competitors’ tactics, as it’s critical to know the challenges — and understand how to break through all the noise to find success.

Biggest Challenges of B2C Marketing

The world of consumer-driven marketing moves at an astonishing pace.

So, despite being able to capitalize on impulse and emotion — as opposed to the purely value-driven foundations of B2B — B2C marketing still faces a core set of challenges:

Adjusting to Changing Customer Behaviors

AI. Omnichannel marketing. Unlimited access to the internet in the palm of your hand. Over the last 5 years, technology has forever changed the way that customers engage with your brand and shop online. Not only do they have more control than ever before, but they also have higher expectations, demanding a better experience from the brands they engage with.

Amidst this constant change, one thing remains clear:

If you want to keep your customers coming back to your brand, you need to deliver the relevant, flexible experiences that they demand.

You need to engage customers, not interrupt them, and meet them where they’re spending their time online with personalized content that’s relevant to their interests and shopping habits. You also need to be there, when they need you, to offer tailored, effective support.

Staying on Top of Evolving Trends & Market Changes

Driven by impulse and emotion, the B2C market moves fast — and staying on top of those changes can be a challenge for many brands. However, if you want to stay ahead in a crowded market packed with competitors fighting for your customers’ attention, you need to be ready to adapt.

When your customers are hit with hundreds of ads on a daily basis, static marketing campaigns aren’t enough to deliver a stand-out customer experience.

Fortunately, there are a number of tactics you can employ to deliver meet the continually rising bar of customer expectations:

Leverage email marketing automations to send relevant, personalized content in real-time to your customers.
Connect customer support to your marketing mix to help them provide a tailored service that quickly resolves queries and provides customers with a standout support experience.
Connect in-store to online by integrating Point of Sale with your digital channels, enabling you to continue the customer journey even when they’ve left the store.
Monitor competitors and relevant hashtags using a social media platform like Hootsuite or a competitor monitoring tool like SEMRush.
Create a Google Alert to receive push notifications for key movements within your niche.
Use a news aggregator like Pocket to collate key competitor events and trends.
By keeping your finger on the pulse of your industry and updating your marketing strategy to improve your customer experience, you’ll continue to meet customer expectations and stay one step ahead of your competitors.

Selecting the Most Effective Channels

Your customers are everywhere. One moment, they’re crossing the threshold of your store. The next, they’re cross-referencing prices online to find the best deal, visiting your website, and leaving your store without completing a purchase.

This is set against a backdrop of ever-changing platforms and surprise algorithm updates which directly impact how your content is displayed and consumed.

So, this begs the question – when your audience is everywhere, and the platforms are constantly changing, how do you know where to focus your presence?

To effectively navigate the challenges of the complex B2C marketing landscape as a marketer, you need to adopt a strategic, agile approach. This involves keeping your finger on the pulse of platform updates, unlocking your customer data so you can deliver personalized content with automations, and, as always, listening to your customers.

You can simplify this process with a customer engagement platform like Emarsys. With this, you can connect your online and offline marketing channels. You’ll create a marketing ecosystem where your audience receives a consistent brand experience no matter where they choose to engage.

Dealing with Data Overload

Customer data is generated at every touch point and interaction, from every customer, web visitor, or prospect you’re trying to reach.

Many B2C marketers believe this is the most significant challenge today — keeping up and making sense of all this data, then using it to draw insights and inform your marketing at scale.

This process is nearly impossible to achieve manually.

New technologies can help you by automating the process of collecting, mining, analyzing, and leveraging data. These include:

Customer data platforms to help store and manage all customer information you’re collecting.
Machine learning to help algorithms self-learn, without the need for manual updates.
Artificial intelligence marketing to help you scale the process of personalization.
With so much data at hand, it’s easy for siloes to crop up, and without unified data, getting a holistic view of channel and campaign performance is a tough task. However, customer data is also your greatest asset and is the gasoline which fuels your B2C machine. Dedicating resources to breaking down silos is a worthy investment.

By leveraging customer engagement platforms and machine learning to put your data to work, you can deliver on your customers’ expectations of personalized experiences, without compromising on efficiency.