Marketplaces have been around for as long as people have traded, with some of the earliest ‘official’ marketplaces recorded in Athens during 600BC. Known for their transparent nature and the easy access to new goods from overseas, there’s a lot to learn from that open approach that can be applied to today’s commercial transactions.
Take a look at the IT buying space in particular – and you’ll see we’ve lost sight of a lot of that transparency. Rather than the open clamour for attention and bartering of the ancient marketplace, today’s IT buyers face endless cold calls, hidden margins and perpetual and confusing price fluctuations.
Spoilt for choice
As consumers, transparency is something we’re all more comfortable with. You only have to look at the way we use Money Supermarket to explore and configure many different finance products, or Skyscanner to compare flight prices, to see how at ease we are with browsing, researching and comparing thousands of options in seconds.
IT buyers face the same levels of choice but often without the tools to help them make decisions. Moore’s Law says that the speed of technology development leads to an abundance of new products every two years. Whether you’re an admirer of this theory or not, it’s safe to say that this constant barrage of new products – and now, cloud-based managed services – makes decision-making increasingly difficult. This gets harder still if you take into account how often prices can change, during what is a relatively short life cycle.
That’s why we’re starting to see a consumerisation of B2B procurement and the re-birth of the marketplace, now in digital form. An increase in user friendly marketplaces like Alibaba, Microsoft Azure Marketplace, Amazon for Business, and Fiverr are testament to this shift as buyers look to access suppliers directly and effectively, monitor prices, obtain information through a variety of forms and tailor experiences for themselves. But critically, not being interrupted when doing so and getting help on their terms.
Beyond this, procurement professionals are looking further than generalists like Amazon to seek out specialist marketplaces relevant to their sector or industry. Crucially, it’s these specialist marketplaces that are tipped to rise most in meeting buyer needs. And with the prospect of customising these new marketplaces users will be able to adapt their procurement strategies much more dynamically whilst retaining all aspects of user experience, choice, governance and compliance.
We’re all consumers now
The way we buy in our consumer lives means we’re all used to rich, self-service shopping experiences, and this same experience is now being demanded in the B2B space, with 94% of business buyers researching products and services online first.
Even in the case of purchases that might require offline guidance or additional support, 60% of buyers have already decided on a purchase before any phone call with the chosen supplier. Buyers are more informed than ever which means there is a huge opportunity to connect with the savvy buyer – delivering a flexible and smooth customer experience that helps nurture that decision-making process, aggregating multiple company, product or service offerings in one online destination.
Although B2B marketplaces may not have achieved the same recognition as consumer champions, they are catching up. Analysts Frost & Sullivan anticipate a potential $6.7 trillion worldwide market for public B2B marketplaces like Amazon or Alibaba, a prediction that puts them on course to eventually outpace B2C portals.
Solving the IT buying problem
Whatever their size or industry, almost every business has an IT budget. Whether it’s securing a few laptops or implementing a complex IT infrastructure, browsing and buying products and services is not always a straight-forward task. Especially when you consider you’re buying through a three-tiered global supply chain involving manufacturers, distributors, and suppliers. Put simply, this results in a volatile and complex market which requires an awful lot of legwork before buyers can feel confident they’re getting the best deal.
Yet, 81% of IT buyers aren’t aware of the scale of price fluctuations which cost them them money, whilst there are up to 30,000 price changes each day.
It’s not just buyers struggling either. Suppliers often struggle to ensure discounts are being communicated to the end buyer. A distributor or vendor may offer a 25% price reduction specific to the public sector, for example, but it’s difficult to police whether this is being passed on openly to the end buyer.
The inefficiency and complexity of the IT market is hugely frustrating for both supplier and buyer. Yet digital marketplaces can support both sides in the same way Skyscanner connects buyers with suppliers in a transparent environment, researching best price on your behalf, helping buy and sell sides thrive. Next generation B2B marketplaces are also expected to serve better educated customers who want to configure their own services online, Microsoft Azure is proof of that.
The power of personalisation
Having information that is more structured and bespoke to an individual buyer’s needs is particularly important. The modern B2B buyer needs a solution where they can connect with and speak to industry professionals or vendors directly, as well as using digital advisors to configure services and help them make more informed product decisions.
The need for information personalised to a particular sector or individual has, in part, been driven by the increase in choice. There are now hundreds of options to sift through – ‘Cloud’, ‘virtual’, ‘physical’, ‘two-in-one’, ‘mobile’ – yet only a segment of those options may be relevant to an NHS hospital versus a university, for example.
A secondary school may not be interested in browsing highly technical ultra-mobile PCs for example, but does want to look at items like tablets or projectors. Rather than having to sift through pages and pages – which is both time-consuming and dull – personalised marketplaces filter out and present only relevant items based on past searches and purchasing history, as well as one-to-one conversations with sector specialists who build a profile of you, your sector and your buying needs This ultimately leads to a better customer experience – delivering the right product or service at the right time, at the right price.
A modern marketplace
Given the complex set of challenges it faces, it’s easy to see why IT is a sector ripe for a change but it’s about embracing an open and honest way of transacting which accounts for how people really want to buy, whether that’s online or talking to an expert on the phone when needed. True digital marketplaces do that and put people in the mix at the right time.
Business is different to consumer, there are relationships, trust, systems and processes to account for. That’s why modern B2B marketplaces need to blend online consumer experience with offline specialist sales support, and configure to integrate with the likes of ERP systems and procurement best practice.
This boils down to a customer-focused approach which centres on buyers’ needs and the demands of the business purchasing cycle for both products and services.
With buyers more knowledgeable about their IT than ever before, maybe it’s time to build on the foundations laid by our Greek ancestors to build a thoroughly modern B2B marketplace.
Matt Royle, Marketing Director, Probrand
Image Credit: Everything Possible / Shutterstock