Spend Matters welcomes this guest article by Amanda Taylor, marketing manager for KWIPPED.com.
Sharing economy tactics have taken the consumer world by storm. You can easily rent someone's apartment in New York City or catch a ride from an Uber driver in Denver. Consumerism is becoming a collaborative, yet fluid process, backed by technological advances. Considering that 78% of the US population age 15 and older are currently making purchases online, it's safe to say consumers are well versed in the use of technology to make everyday purchases. Amazon has even unleashed its “dash button,” which allows Amazon Prime members to automatically reorder common household items by pressing an actual physical button (hopefully strategically positioned away from children and pets).
Most of us have discovered the convenience and efficiency of making arrangements and completing purchases with just a few clicks. Because the “on-demand” ideology is somewhat utopian, it's unfortunate and surprising that business purchasing has not adapted some of the go-to-market strategies of the consumer world.
Small-to-middle-sized businesses often don't have the time, funds or even the need, to invest in the upscale procurement tactics frequently employed by larger organizations. They often have departments that do more than one job, which either leaves procurement on the back burner or forces core business operations to the back burner to make way for cumbersome procurement activities, like research, quoting and logistics. It may seem they don't need a solution, but many of these organizations can increase revenue, efficiency and enhance customer satisfaction by leveraging a better supply chain management protocol. How does procurement become an easy, affordable priority for small- and medium-sized businesses?
In the words of William Butler Yeats: “Communicate in the language of the people...”
To make procurement more efficient for small-to-mid-sized businesses, leveraging efficiency-driven technology that they already use makes sense. For example, John has decided to purchase a drill for his dad for Father's Day. He could get in the car and drive to brick and mortar stores – Walmart, Kmart or Sears to name a few – or, with a few clicks he could search Amazon to easily find the best price. Amazon also gives John instant access to product reviews, other buying options and frequently purchased drills on the same page. John ends up saving $75 by purchasing a reconditioned, wireless drill from a vendor with a 98% approval rating.
The same scenario could be applied to business-to-business procurement. Tammy, administrator of a small medical office, needs access to an autoclave while hers is being repaired. She could research multiple distributor websites and purchase the equipment. She could call a local rep, who might recommend a handful of medical distributors. After making some calls, the prices range considerably. Two of the distributors don't have an autoclave in stock for rent. The last option would be to access a B2B online rental marketplace where she could easily view multiple types of autoclaves, their pricing and availability. She is familiar with how to use Amazon, so the interface is familiar. Through the online marketplace messaging system, she is able to clarify product-specific details with the suppliers. She compares the details of the different types of autoclaves and decides on one that fits her budget and project needs. She signs an e-contract with specified dates and packaging information.
In both scenarios, the marketplace saved John and Tammy time and money. We know marketplaces have had tremendous success in B2C. They integrate product research, communication between parties and ease of transaction into a single on-demand process. Why hasn't this been leveraged in B2B procurement?
The B2B industry, and the procurement process in particular, are poised for change. Small- to medium-sized businesses will soon be asking for better sourcing technology – and online marketplaces will fulfill that demand.