Shopify is betting on B2B
Brian opened with news that Shopify stock rose 20% on a strong Q2 report, even as overall technology investment declined by 40% according to McKinsey. The driver was B2B. Cleveland Research shared data showing Shopify’s B2B growth accelerated to 140% year over year in Q2, with online B2B orders growing six times on a year-over-year basis. The company is rolling out features like manual payment methods and deposits at checkout, signaling a serious push into the B2B market.
B2B buyers are looking for price and they are looking online
The main topic was whether B2B companies should be fully transparent with online pricing. Brian shared data from Master B2B’s State of B2B eCommerce report: 87% of B2B buyers are asked to research prices before making a purchase, and 64% research online before buying. Research from Digital Commerce 360 found that nearly 70% of B2B buyers rated price as very important when selecting a B2B website. The message is clear. Buyers want to see pricing.
If you don’t show pricing you may as well tell your customer or potential customer to go do business with your competitors.
Beth Doling, Global Director of Marketing Technology, Kimberly Clark
Beth Doling added that if a company is still questioning whether to make pricing transparent, they either have a legal compliance reason or a hidden agenda, and that job protection or relationship building is not a valid reason in 2024 to keep pricing hidden.
The weak case for hiding pricing
Brian presented arguments from a group called the Pricing Conundrum for why sellers might hide pricing: it can give the seller pricing power, it requires buyers to commit by calling in, and it can steer buyers toward certain products. Andy pushed back.
It assumes motivation. I don’t think a lot of B2B buyers are highly motivated to go on a scavenger hunt to figure out what the price is for a product.
Andy Hoar, Master B2B
One LinkedIn commenter noted that companies focused on hiding price may be signaling that price is the only differentiation they have. If that is the case, there is a bigger problem. In a commoditized market, the path to winning is through service and value-added offerings, not pricing games.
What happens when you test hiding pricing
Andy Carlson, Chief Marketing Officer at Distributor Data Solutions and a longtime B2B practitioner, shared results from an experiment earlier in his career. They tested showing a price versus displaying call for price, with the hypothesis that more people would call. Instead, customers found the experience frustrating and ended up going to competitors. He noted that he has yet to find a B2B ecommerce customer who prefers the no-price experience.
Another practitioner, Jack Mulberger, put it simply: for every customer willing to call for pricing, three others find pricing online somewhere else and never call.
Hidden pricing breaks the approval process
Andy raised a practical problem that often gets overlooked. Many B2B buyers have to get internal approval before making a purchase. If they cannot see the price, they cannot complete that process. What are they supposed to ask their boss to approve? Hiding pricing disables a workflow that B2B buyers depend on, adding friction where none should exist.
The StubHub experiment and its limits
Brian shared a case study on price shrouding. StubHub ran an experiment comparing full transparency to showing the base price upfront and revealing fees only at checkout. Users who were not shown fees until checkout spent about 21% more and were 14% more likely to complete a purchase. StubHub dropped their transparent pricing model based on the results.
But the story did not end there. StubHub was later sued by the DC attorney general, who alleged bait-and-switch pricing. Andy noted that while sunk-cost psychology can work in high-emotion consumer purchases like concert tickets, B2B is different. Buyers are spending company money, not personal funds, and they have little tolerance for being jerked around on pricing.
The industry consensus is clear
A LinkedIn poll asked whether B2B companies should be fully transparent in listing prices online. The results: 54% said fully transparent, 32% said partially transparent, and only 14% said non-transparent. The weight of opinion is moving toward openness.
Brian concluded that there may be narrow edge cases where hiding pricing makes sense, such as exclusive or highly complex products that require solutioning. But for most B2B companies, the argument is settled. Buyers want transparency, new entrants like Amazon are providing it, and the companies that resist are making life harder for themselves.