More businesses are looking to ramp up their online procurement processes, according to an Amazon Business survey released Monday. The survey, covering an equal mix of 500 business-to-business (B2B) sellers and buyers, found that 85% said COVID-19 has resulted in an acceleration of their move to online procurement and 96% said that will continue post-pandemic.
“Our 2021 B2B E-commerce in Evolution report underlines the fact that simply leveraging e-procurement is no longer enough,” said Todd Heimes, director of Amazon Business. “Ultimately, we think that organizations have a significant opportunity to maximize e-procurement technologies that will help them overcome operational challenges that diminish efficiency and waste budget. For seller organizations, adapting to meet buyer demands will allow them to remain relevant with their B2B customers. At Amazon Business, we’re committed to helping buyers and sellers navigate the next chapters in their transformation journeys with our technology and expertise.”
The report also said 91% of buyers prefer e-procurement processes over traditional and offline purchasing methods. The report’s results reinforce a previous report from PwC that found 66% of businesses have made implementing more digital-focused marketing and sales approaches a priority in the next two years as more commerce moves online.
The 2021 Amazon Business B2B E-commerce in Evolution Report can be downloaded here.
The Amazon report highlighted the fact that 38% of buyers made more than 50% of their company’s purchases online in 2020. This was not only larger companies either. Smaller and medium-sized businesses (SMBs), in fact, were more likely to shift to an online process, with 56% saying they more fully digitized their purchasing process versus just 42% of enterprise companies saying the same. The Amazon report concluded this was due to SMBs “playing catch-up” and not necessarily a result of more forward-thinking.
“Procurement leaders have the opportunity to drive alignment and integration in their organizations by implementing digital solutions that not only enable greater cross-team efficiency, but also empower individual users to take on more strategic roles,” the Amazon Business report noted.
Even as this shift is taking place, though, manufacturers remain behind the curve, according to other statistics. Writing for Modern Shipper, Dusty Dean, who formed BITCADET as a source for manufacturers looking to build a digital sales strategy, said that many manufacturers still don’t have the technological infrastructure in place to shift to a digital sales strategy.
“Digitizing an operation is more than building an e-commerce platform – it’s tying together all the back-end processes within a company’s supply chain to create a seamless experience,” Dean wrote. “Companies are finding that selling direct requires a commitment to the back-end operation to make sure all areas (sales, finance, engineering, customer service, production, logistics, marketing, HR, etc.) are collaborating and the infrastructure is thoroughly in place. U.S. manufacturers are notorious for having huge amounts of manual administrative processes engrained in their employee culture. For many employees – especially those who have been around for years – a new way of operating can be very stressful and let’s face it, people tend to resist change.”
The Amazon survey found buyers and sellers differ on what was most important to them. Buyers ranked online product comparison features higher 83% of the time, while sellers ranked it higher just 67% of the time. Buyers also preferred videos 74% of the time, compared to 66% for sellers.
Conversely, sellers ranked viewing products in a physical store highest 68% of the time compared to 57% for buyers, and sellers also ranked phone or video calls higher 69% of the time versus 63% for buyers.
When it came to other priorities, buyers and sellers also differed. Sixty-two percent of sellers ranked providing a positive customer experience as a top priority, while 59% also ranked expanding customer bases and selling products globally, at 40%, high. Buyers were more likely to choose increasing efficiency (40%) and reducing procurement costs (34%) as top priorities. Buyers also ranked improving sustainability in purchasing (39%), supporting local businesses (37%) and increasing supplier diversity (35%) as top priorities.
Additionally, 83% of buyers said their companies planned to increase their purchasing budgets reserved for Black and minority-owned businesses in 2021, with 48% saying that budget was increasing 20% or more.
When it comes to selling online, though, buyers had a few issues with sellers. Forty-four percent said online options result in too many supply chain disruptions and 41% said getting in touch with salespeople or company representatives is too hard. Also, inadequate product information or descriptions was a problem for 40%.
“As supply chains return to normal, sellers should focus on alleviating buyers’ other pain points by including customer service information and more detailed product descriptions on their online storefronts. These efforts will further simplify e-procurement for buyers, turning them into repeat customers and product advocates,” the report advised.
Like consumers, buyers also want specific attributes when buying online. These include fast, free shipping (cited by 51% of respondents), quality discounts (43%) and guided buying features (28%).
“Many organizations that have experienced more than a year of remote work understand the imperative to align on operational objectives and integrate digital workflows to meet these goals,” the report said. “Outdated processes may have been manageable, albeit inefficient, in the past. But a distributed workforce will likely remain permanent to some extent given growing preferences for flexible work options and the increasing use of technologies that enable many employees to do their jobs from anywhere. With this shift well underway, streamlining and digitizing workflows is becoming increasingly important.”