And why that’s changing how you buy IT
We are all familiar with the idea of what is a marketplace being a large, open square in a town centre. These historic trading places have been around since 600 BC, when the ancient Greeks referred to them as an ‘agora’ which literally translates as meeting space. They are where buyers and suppliers can come together to browse, negotiate and buy.
The marketplace has, of course, transformed since Ancient Greece as it evolves to meet modern requirements. There have been many triggers for this but the most profound has been the rise of the internet.
The ability to research and buy products from all over the world, via websites, has increased the choice available to consumers, influencing how we all shop. We’re all consumers and now B2B buyers are employing consumer purchasing behaviour, researching and buying like this on their terms, making 91% of traditional B2B sales cold calls irrelevant. B2B buyers are more savvy than ever.
We know that, for B2B buyers, two thirds (67%) of the buying journey is conducted online, and that 75% want the option to buy online.
When the internet first emerged in the ‘90s, we saw the growth of ecommerce sites which mirrored paper catalogue offerings and removed physical barriers to trade. In recent years, however, we’ve witnessed the emergence of digital platforms that allow several suppliers to come together and meet customers in one online location, including the likes of ebay, amazon, Airbnb, Skyscanner, Fiverr and Craigslist. Now, over 30 million people use B2C digital marketplace in the UK.
These digital marketplaces allow buyers to shop around, and check both the price and availability of goods and services, all in one place. This is not just about being a ‘one-stop-shop’. These marketplaces are networks or communities that provide mutual benefit and a major advantage over shopping via the Wild West of internet search engines – where sellers can advertise out of stock products at low prices with the sole intention of attracting traffic to their website.
Research has shown that B2B buyers are so frustrated with negative experiences at eshops that more than half (56%) would pay up to 30% more for something better. For B2B procurement professionals, tasked with the job of ensuring value on every purchase, digital marketplaces provide something better for user adoption and control without the high costs. As buyers can immediately see whether a supplier has enough stock to satisfy their order, it also curtails the time wasted chasing down dead ends and the need to shop around.
Given the advantages this provides – choice, transparency, efficiency and ultimately better price – it’s no wonder that analysts Frost & Sullivan have predicted that public B2B marketplaces will have a potential worth of $6.7 trillion worldwide by 2020.