Millennial and Gen Z habits are Changing how Businesses Procure Supplies
Business purchasing habits are changing, and it’s a reflection of more diverse workforces, according to a new study. Research shows businesses now buy 75% of all products online rather than using traditional commercial buying methods.
On average, businesses around the world make 428 business-critical purchases, and orders are made with companies spending on average $3 million online every year. Often involving items of high value, complexity, and technical specification, business-to-business (B2B) transactions are most commonly associated with a chain of sales representatives, phones, email, and Excel spreadsheets. It is not uncommon for an order to be placed verbally with no further communication until the product or service arrives, if it does.
However, according to research conducted for Sana Commerce, 90% of B2B buyers are turning to online channels as their primary method of identifying suppliers with 75% of products being bought online compared to 62% in 2019 – a 21% increase in 3 years.
This number is only expected to increase as the research shows two-thirds of companies are spending more online now than they did prior to the pandemic with an increase in order value by an average of 45%.
In 2019, email was the most popular method of B2B buying, followed by e-commerce and then phone orders. The top two have now swapped. Businesses are expecting the same level of convenience, efficiency, and service in B2B transactions as they experience in business-to-consumer (B2C) services.
Why might this be? According to Sana Commerce, a Dutch e-commerce platform designed to help manufacturers, distributors, and wholesalers succeed by fostering lasting relationships with customers who depend on them, it’s to do with shifting general attitudes toward purchasing.
Millennials are now taking up leadership roles and Gen Z are becoming more senior, so both generations are having more influence on the procurement habits of the companies they work for. Both generations are digitally savvy and expect to be engaging, purchasing, and communicating online. So these employees are driving innovations in the sector, bringing about change to systems and processes. In addition, as teams are composed of individuals with greater diversity in terms of age and tech know-how, companies are able to ideate and adopt different perceptions, views, and desires from a customer experience perspective.
Michiel Schipperus, the CEO of Sana Commerce, believes relationships and convenience will define the future of B2B procurement.
“With e-commerce playing a leading role in B2B sales, companies have spent years ensuring that their web store performs well. But good is no longer enough to maintain – let alone further develop – long-lasting relationships with buyers. And that’s critical, because we know that prioritizing relationships with your buyers leads to success in B2B, even with e-commerce thrown into the mix.”
Timeliness is key too. Collaboration technologies are streamlining communication channels, speeding up approval processes, and driving autonomy and efficiency. Long meetings and phone calls are considered a burden as businesses empower teams to find their work-life balance whilst achieving personal and professional ambitions.
Evolving consumer habits that prioritise habit and convenience are having an impact. Those working in B2B sectors are consumers too. They are accustomed to researching, buying, and receiving items online. Being able to autonomously identify, shortlist and share information online without being dependent on sales representatives, calendars, time zones and accessibility enables businesses to conduct buying and selling within the needs and parameters of their day and workload. This was reflected in the research with a third of buyers being frustrated by functional elements of current e-commerce purchasing methods. Visibility of product features, ease of check out, ease of repeat ordering, and access to order history were all considered of utmost importance.