By the end of 2021, one third of online sales are expected to be made via marketplaces. And the impact of these players on the digitalisation of B2B procurement will be by no means negligible. Let's take a look at one of the most rapidly developing aspects of procurement digitalisation…
Smart cooperation between suppliers via marketplaces offers the prospect of a near-perfect business environment. Naturally, the digitalisation of procurement processes is at the heart of this new, intelligent approach:
- The marketplace, providing services for both customers and suppliers
- The removal of most of the obstacles encountered by buyers
- A slightly stronger role for sustainable procurement in the industry
Digitalising B2B purchasing: How does a marketplace work?
A marketplace is a virtual space that digitalises the buying experience of customers to the benefit of a community of sellers united by common interests. Generally a specific business sector or type of customer. Their objective is to share the burden of digitalising purchases and collectively promoting their products.
A marketplace brings together as many services as possible to provide buyers with the smooth, transparent experience they are looking for by digitalising their journey. Marketplaces are paid for by suppliers, which in turn offers them tailored services.
In regard to B2B more specifically, marketplaces bring together services such as:
- Tender management
- Auction system management
- Sourcing lists maintenance
Procurement digitalisation: A long-standing wish for professional buyers
Marketplaces play an important role in procurement digitalisation, providing a sort of link between the needs of buyers and sellers. The marketplace essentially serves as an intermediary between:
- The network of the buying company, with the involvement of all of its suppliers.
- The network of the selling company, with the involvement of all of its customers.
Their implementation—whether by a B2B shift of historical players, such as Amazon or Alibaba, or by the emergence of dedicated operators—addresses the needs of professional buyers. According to a recently published study, three out of ten buyers say they are ready to make 90% or more of their purchases online.
By digitalising the procurement process, marketplaces remove the obstacles that buyers commonly encounter:
- A lack of information regarding conditions of purchase (product descriptions, logistical options or payment terms)
- Accessibility and payment security
- History management
- Order and delivery tracking
In short, using the expertise and power of the marketplace to fully digitalise B2B procurement processes represents the very best of e-procurement approaches.
More sustainable procurement through digitalisation
Social and environmental responsibility is now high up on the list of priorities in the procurement profession. And combining maximum efficiency with CSR compliance is also a major benefit of digitalising procurement processes.
There are several reasons for this. Firstly, the transparency and comparability offered by marketplaces create a greater incentive for suppliers to ensure the integrity and thoroughness of their CSR commitments.
Furthermore, increased efficiency, better information sharing and, in essence, large-scale streamlining translate into a reduction in the quantities purchased, transported and then stored.
There are also fewer mistakes, fewer misunderstandings and more certainty about the quality of the goods eventually delivered. There is therefore less waste, which is another form of sustainable procurement.
In conclusion, digitalising B2B procurement is a step in the right direction in improving a company's overall efficiency. It is also beneficial for those stakeholders directly involved, and for customers and vendors, and helps to reduce the carbon footprint of companies within the network.
Digitalisation is radically transforming the procurement profession. To find out more about what the future holds procurement, read the article by Julie Dang Tran, Managing Director of Manutan France: What will the role of a chief procurement officer look like in 2070?