In a world that’s becoming increasingly digital, online shopping is influencing B2B businesses more than ever. One significant contributing factor lies in the increase of Millennials moving into purchasing departments, and with this shift in digital awareness, business-focused marketplaces like Amazon Business are becoming increasingly popular. As this development leads to increased efficiency and cost savings, it is safe to say that procurement is at a tipping point.
According to a recent study by Merit, more than 70% of 20-35-year-olds are involved in product or service purchase decision-making at their companies, with one-third reporting that they are the sole decision-maker for their department. Because Millennials have grown up being exposed to shopping apps, comment functions and product reviews, they’ve become accustomed to the benefits of online shopping – such as a wide selection, transparent comparison options and fast delivery. And naturally they are bringing their B2C customer experience into the B2B world.
The latest analysis in the Hackett Report reveals that global companies could reduce their purchasing costs by around a quarter through digital processes. This means that the so-called ‘tail-spend’ – or purchases that often take place outside formal procurement procedures and which are not directly required for production – can be made leaner.
In any business, expenditure can lead to cost-saving opportunities if managed in a certain way. For example, one international travel company that is currently working with Amazon Business is benefiting from faster coordination processes as a result of e-procurement. The company estimates its savings at around 19% of total costs, including time savings for product research, reduced costs due to competitive pricing and free shipping. Digital marketplaces make it possible for companies of all sizes to streamline processes and control costs, while making more reasoned purchasing decisions by comparing products and suppliers. Naturally, this results in a better purchasing process.
Despite the benefits that B2B marketplaces can offer buyers, they also provide easy entry into e-commerce for sellers and manufacturers of any size. These modern platforms make it possible for them to reach business customers internationally without their own sales and logistics departments.
And so, as Millennials continue to ascend to leading positions within companies, and as they focus on innovation, digital transformation and positive change, it’s safe to say that the future of procurement is digital. Thousands of small and medium-sized companies have already seized the opportunities offered by digital procurement, and it’s possible that we’re only beginning to scratch the surface of what B2B marketplaces can offer.