CC BY
2СЕКЦИЯ - МЕЖДИСЦИПЛИНАРНЫЕ ИССЛЕДОВАНИЯ SECTION - INTERDISCIPLINARY RESEARCH
UDC 658:691
Umarov Akylbek
bachelor's degree, Aktobe's K.Zhubanov State University
Kazakhstan, Aktobe
INNOVATIVE BUSINESS MODELS IN THE SALE OF CONSTRUCTION
MATERIALS
Abstract: This article examines innovative business models in the construction materials (CM) market, shaped by global digitalization and changing consumer preferences. It explores traditional approaches to retail trade, their advantages and limitations, and analyzes market transformations driven by digital platforms, marketplaces, and process automation. Special attention is given to business-to-business (B2B) and business-to-consumer (B2C) models, their features, benefits, and areas of application in the construction sector. The study conducts a comparative analysis of these models, highlighting their strengths and weaknesses. The prospects for hybrid business models are also discussed.
Keywords: innovation, business models, construction materials (CM), digitalization, business-to-business (B2B), business-to-consumer (B2C), hybrid models.
INTRODUCTION
The construction materials (CM) market is undergoing significant changes under the influence of global digitalization and innovation. Traditional approaches that previously dominated retail and wholesale have given way to new business models based on digital technologies and evolving customer needs. The construction industry, which historically required substantial time, resources, and effort for interactions between suppliers, companies, and end consumers, is becoming more flexible and efficient.
Digital platforms, marketplaces, and automation tools play a crucial role in this transformation, fundamentally changing the ways market participants interact. Innovative models, such as hybrid business-to-business (B2B) and business-to-consumer (B2C) approaches, not only optimize supply chains but also enable the ISSN 3034-2627 73 https://coldsciencepublisher.com
creation of personalized solutions for customers. These changes compel companies to rethink traditional strategies and adopt technologies that ensure competitiveness in a rapidly evolving market. The goal of this article is to investigate contemporary innovative business models in the sale of CM.
MAIN PART. ANALYSIS OF TRADITIONAL RETAIL TRADE IN CM
Retail trade in CM, despite its fundamental importance to the construction industry, has historically faced numerous limitations due to its heavy reliance on physical infrastructure and processes. These models were primarily based on distribution through construction markets, warehouses, and stores, which provided end consumers with materials necessary for construction and repair projects.
The advantages of the traditional trade model lie in the opportunity for direct inspection of products, their tactile evaluation, and personal communication with sales representatives. Customers could assess material quality, analyze their properties, and discuss their needs with qualified staff [1]. This approach is particularly valuable for purchasing specific or high-tech CM, where detailed consultation is required.
However, amid growing construction volumes and infrastructure modernization, this model has shown limitations in several areas. First, it imposes significant demands on physical infrastructure, including large warehouse spaces and sales outlets, resulting in high operating costs. Second, the limited assortment available in warehouses or stores often complicates meeting diverse client needs, especially when non-standard or specialized requests arise. Third, the geographic remoteness of many construction sites from points of sale often leads to logistical challenges and increased expenses. Additionally, shifts in consumer expectations have intensified pressure on traditional approaches. Modern customers demand convenience, speed, and personalization, which are challenging to deliver within the framework of physical retail. This became particularly relevant during global crises, including the COVID-19 pandemic, which heightened the need for digital alternatives to maintain operational activities. Consequently, in recent years, retail trade in CM has experienced active transformation driven by the implementation of digital technologies.
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THE IMPACT OF DIGITAL PLATFORMS ON THE CM MARKET
Digitalization serves as a powerful driver of change, offering innovative solutions to simplify trade processes, enhance transparency and accessibility, and optimize interactions between suppliers and customers. It fundamentally transforms the sales paradigm by providing unique tools to meet the modern demands of the construction sector.
The emergence of digital platforms, such as trading platforms and specialized online stores, has become one of the important factors that have changed traditional retail in CM. These platforms provide centralized access to a wide range of products, allowing customers not only to select materials but also to compare their characteristics and prices in real time. Traditional limitations related to the geographic availability of physical stores are eliminated thanks to remote access through digital channels.
Marketplaces and specialized platforms not only reduce the costs associated with maintaining physical infrastructure but also offer users tools for optimal product selection [2]. The application of building information modeling (BIM) in CM trade enables the integration of the selection and procurement processes with the design and construction stages. This is particularly important for large-scale projects, where precise compliance with technical specifications is essential. Through these technologies, digital platforms minimize the risks of ordering errors and significantly accelerate delivery processes.
One of the main advantages of digital platforms is the ability to reduce transaction costs. By eliminating intermediaries in the supply chain, lowering logistics expenses, and automating order and delivery processes, digital platforms enhance the overall efficiency of trade operations. For end consumers, this results in reduced CM costs, while businesses benefit from increased profit margins and greater flexibility in responding to market changes.
Modern digital platforms emphasize personalized interactions with customers, achieved through the use of artificial intelligence (AI) algorithms and behavioral data analysis. The adoption of AI enables platforms to offer customers materials and services that best match their needs, improving the overall customer experience. For
instance, a platform can automatically recommend additional materials that may be required for a specific construction project.
The automation of logistics and ordering has also become a crucial component of digital transformation. Supply chain management technologies allow not only realtime order tracking but also the optimization of delivery routes, reducing costs and delivery times [3]. This is particularly critical for large construction projects, where timely deliveries are essential to meeting schedules. These management tools not only increase customer satisfaction but also promote loyalty, fostering long-term relationships between customers and suppliers. Consumers who experience the transparency and efficiency of digital platforms are less likely to revert to traditional purchasing methods, making digital transformation a strategic advantage for businesses.
Digital platforms also contribute to promoting sustainability principles. Many of them provide information on material origins, environmental certifications, and the ecological impact of products. The emphasis on social and environmental responsibility is further reflected in supporting local manufacturers, providing information on the lifecycle of materials, and promoting innovative, eco-friendly solutions.
Thus, the impact of digital technologies on CM retail is becoming increasingly evident. Digitalization eliminates the primary limitations of traditional trade models, enhances process efficiency, and improves interactions among all market participants. For businesses, this highlights the need for strategic adaptation to new realities, ensuring competitive advantages and sustainable growth in the long term.
OPTIMAL SALES MODELS FOR INNOVATIVE CM
Innovative construction products, including high-tech materials, eco-friendly solutions, and integration with digital platforms, require the adaptation of traditional sales models to enhance their effectiveness. The B2B and B2C models approach CM sales in different ways and have unique advantages that depend on the target audience, the nature of the product and market conditions.
The B2B model plays an important role in the construction industry, where the focus is on large orders and interaction between manufacturers, distributors, and construction organizations. Sales in this segment are characterized by features that make them ideal for complex and high-tech construction products.
Innovative construction products offered within the B2B model require a specialized approach that cannot be implemented within traditional retail. For instance, materials like self-healing concrete require not only technical descriptions but also demonstrations of their functionality and economic benefits. Technical support is central to B2B sales, as professional clients such as contractors and architects often require the customization of materials to meet the specific needs of their projects. This includes consultations with suppliers' technical experts, testing for compatibility with other materials, and integration into project documentation. Such requirements demand a deep understanding of the market and customer needs from suppliers.
Long-term contracts are a cornerstone of the B2B model, providing predictability and stability in supply chains. Once such agreement is established, construction companies can plan projects based on pre-agreed supply volumes, prices, and deadlines. For suppliers, this means a steady stream of orders, which is important for innovative products that often require substantial upfront investments in production and marketing.
The main benefit of the B2B model involves automating the procurement process. Contemporary platforms offer tools that facilitate order management, inventory control, and logistics. For example, automation systems allow clients to place orders directly through digital interfaces integrated with project management software. This reduces human error and speeds up order processing. Besides, automated procurement ensures the transparency and control of a supply chain at all levels. Customers can monitor order statuses in real time, get notifications about delivery timelines, and ensure that shipments are manufactured in accordance with technical specifications. This is particularly relevant for innovative construction products, where even the tiniest deviations from specifications might cause huge problems on building sites.
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Integration with project management systems, such as BIM, provides an additional advantage by automating the process of selecting materials in accordance with project documentation. This not only speeds up procurement but also reduces costs associated with errors or specification mismatches.
One of the most in-demand B2B platforms in the construction industry is Procore, which offers comprehensive solutions for project and supply chain management. It brings together participants on a unified digital platform, enabling efficient coordination of material procurement, delivery tracking, and work scheduling [4].
The B2C model occupies a significant position in the modern construction industry, particularly in the context of selling materials to end users. It is geared toward meeting the needs of private individuals and small construction companies, who require quick and convenient solutions for purchasing materials, as well as access to technological tools that enhance their experience. A distinctive feature of the B2C model is its focus on a wide range of end users. This includes private consumers undertaking renovations and small construction projects, as well as small businesses that do not require complex logistics or bulk deliveries.
Interactive platforms have become an integral part of the B2C model. Online stores provide customers with product catalogs, allowing them to compare characteristics and prices in real-time. For CM, this is particularly important as product choice may depend on various factors such as price, quality, certification availability, and compatibility with other materials.
Technologies such as virtual reality (VR) and 3D modeling are another important tool used within B2C sales. They allow clients to visualize how selected materials will look in finished interiors or construction projects. This not only enhances the customer experience but also increases consumer confidence in their choice.
Flexibility and accessibility are also important aspects of the B2C model. They allow private clients and small businesses to access the necessary products at any time, regardless of their location or work schedule. Platforms working on this principle provide round-the-clock service and integration with delivery systems, which makes the purchase process as convenient as possible. This is especially important for clients
with limited time or resources who are looking for solutions that can be implemented quickly and with minimal effort. An example of a successful B2C platform is Home Depot, which offers online tools for designing, selecting, and purchasing CM. The platform focuses on customer convenience, providing access to a wide range of products and services [5].
An analysis of B2B and B2C models shows that each represents a unique approach to organizing sales, targeting different types of consumers and their needs. They differ significantly in terms of interaction structure, tools used, and the nature of transactions, reflecting the characteristics of their target audiences and market conditions. Understanding these differences allows for more precise adaptation of sales strategies to meet the demands of modern markets (table 1).
Table 1. Comparative analysis of B2B and B2C models [6, 7]
Criteria The B2B model The B2C model
Target audience Construction companies, contractors, architects Individuals, small companies
Type of interaction Focus on long-term contracts, individual agreements Single purchases, direct interaction
Product range Specialized CM, large batches A wide range of mass-produced goods
Duration of transactions Long-term relationships, contracts for years Short-term deals, one-time orders
Sales Tools Supply automation, project management Online stores, interactive platforms
Technologies Integration of BIM, ERP systems VR, 3D visualization
Logistics features Often complex logistics chains, delivery of large batches Simplified logistics, fast delivery of small volumes
A comparative analysis of B2B and B2C models demonstrates that each has its own unique advantages and limitations. However, in the modern construction industry, where there is a growing overlap between professional and private segments, the need for an approach that combines the strengths of both models is becoming increasingly apparent.
Hybrid sales models, which integrate elements of both B2B and B2C, represent an evolution in market strategies, allowing for the satisfaction of diverse client needs (fig. 1).
The Company
/ \
Final Customer
Figure 1. Hybrid sales models
These models offer the flexibility necessary for working with large corporate customers while simultaneously ensuring the accessibility and personalization valued by end consumers. For example, the Alibaba platform simultaneously serves professional developers through B2B interfaces and offers products to private customers via retail channels [8]. This approach lays the groundwork for more efficient market penetration of innovative CM, covering a wide range of clients and simplifying transitions between segments.
The choice of a CM sales model depends on the product characteristics and target audience. The B2B model is ideally suited for large-scale projects and professional clients, whereas B2C focuses on private individuals and small businesses. Hybrid models are a promising direction that can meet the needs of both segments. The integration of technologies such as VR, process automation, and BIM enable companies to enhance customer experience and optimize supply chains, strengthening their competitive positions.
CONCLUSION
The development of the CM market amidst digital transformation and global changes demands innovative approaches from companies for selling their products.
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Digitalization has reshaped traditional trade models, offering opportunities for process automation, enhanced transparency, and closer interaction with clients. Innovations such as marketplaces, BIM integration, virtual reality technologies, and personalized recommendations have significantly improved customer experience and optimized supplier operations.
Models B2B and B2C have proven their effectiveness in different segments, yet their differences define their specific applications. However, in the context of increasing competition and the need to cater to both professional and private market segments, hybrid sales models have gained particular importance. These models combine the best aspects of B2B and B2C, creating universal approaches capable of adapting to the dynamically changing demands of the market. Thus, the success of companies operating in the CM market will depend on their ability to adopt innovations, develop digital platforms, and combine various sales approaches.
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