SCOTTSDALE, Ariz. — There is no question that e-commerce finally found its footing during the COVID-19 pandemic, with consumers flocking to online sites, led by Amazon, to fulfill their needs and wants in a frictionless and efficient way.
Business-to-business e-commerce has been slower to catch on, but it too has finally entered the mainstream. In a report released Wednesday, Amazon Business — the B2B e-commerce arm of the company — reported that 91% of B2B buyers now prefer to make purchases online.
Todd Heimes, director and general manager of Amazon Business Worldwide (NASDAQ: AMZN), told Modern Shipper that this trend is here to stay.
“We are seeing that in our own business, so we feel pretty good about that trend continuing,” he said on the sidelines of Amazon’s second annual Reshape Conference for businesses at the Hyatt Regency Scottsdale Resort and Spa.
Heimes said there continues to be a push across all of Amazon’s business customers to accelerate online buying, driven in part by the pandemic, but also by more business leaders looking at more efficient procurement methods.
“We’re seeing strong growth as customers want to make their procurement more efficient,” Heimes said.
Complicating matters, though, is the delivery of those items. A majority of respondents to the “2022 State of Business Procurement Report” (58%) said that purchases must now be delivered directly to an employee’s residence as work-from-home has firmly taken hold across the country. That is a big change from when Amazon Business launched several years ago. Traditionally, a business would have a bulk delivery of items to a single location, but that is no longer the case, Heimes said.
“Now we have to shift to multiple shipping locations,” he said. “We are in a middle ground talking to a lot of our customers as to what the future looks like.”
That future depends on where the workforce ends up. Some businesses are requiring employees to return to the office, while others are embracing a flexible work environment. The shipping part of the equation is becoming more complex, from shipping to multiple locations — even residences — to a push for more sustainable shipping. Heimes said Amazon is preparing to meet those logistics needs and discussions are held regularly to ensure Amazon Transportation Services is able to meet the needs of Amazon Business’ customer base.
“[That is one of the questions]: Can what we have today scale as we continue to grow,” he noted.
Amazon has added fulfillment centers across the country to ensure both its consumer and business customers can access the items they want quickly. Heimes said creating a good customer experience spans both segments, although Amazon Business offers plenty of customization and other services to help its customer base become more efficient and has launched its Smart Business Buying program to highlight these initiatives.
“We want to personalize the site as much as possible but also make it work for them,” Heimes said, noting that small business customers “are very similar to consumer customers.”
The procurement report noted that business customers are continuing to look for ways to optimize costs.
“Our research found that while optimizing costs and increasing efficiency remain high priorities for procurement, purchasing in line with organizational values continues to grow in importance. Business buying looks more like personal shopping than ever, with B2B buyers increasingly taking advantage of e-procurement — also known as Smart Business Buying — technologies to find, compare and purchase supplies in their price range that are aligned with their core values,” the report stated.
Heimes pointed to some of the tools that are at the disposal of business customers, including multiuser accounts, payment method options (a credit card through American Express, pay-by-invoice options) and a special Business Prime plan.
“It’s a great solution set,” Heimes said, adding that larger enterprises also have more options, including credit lines, approval workflow processes and integration with enterprise resource planning systems.
The report noted that over the next five years, 57% of respondents plan to invest in automation of manual procurement processes, and 55% said they would move to digital or online invoices. Heimes said Amazon Business is already helping in this area with its guided buying option to ensure employees are purchasing items according to contracts and other preferences, and expense management.
Like its consumer business, Amazon Business is using machine learning and AI to collect data and “learn what customers want.” This not only includes the types of products, but also the form factors (pack size and delivery options), Heimes said, noting that the data is fed back to core suppliers to ensure proper supply chain flow.
“Everyone is moving purchasing online,” Heimes added.
Click for more articles by Brian Straight.
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