91% of B2B buyers want to order online

Respondents worked at companies of all sizes, ranging from fewer than 250 employees to enterprises with over 10,000 employees, and included those from government and nonprofit organizations, as well as education, health care and commercial industries. All the companies made over $250 million in revenue in 2021.

“Procurement professionals continue to contend with a variety of challenges in a rapidly evolving landscape. We’re constantly looking for opportunities to improve the buying experience for our customers, and our 2022 State of Business Procurement Report provides actionable insights to procurement strategies and serves to aid decision- makers as they continue their digital transformation journey,” said Aster Angagaw, vice president of commercial, public, and strategic sectors at Amazon Business. “We’re proud to equip buyers across industries, organizational sizes, and revenues with the tools needed to meet their business goals and improve operations.”

Diversity focus

Among the key findings in the report are that 84% of B2B buyers say their organization plans to increase the purchasing budget for Black-owned or other diverse-owned businesses; and 63% said sustainability is a top purchasing goal. Of the latter group, 55% said it is difficult to source suppliers that follow sustainability practices and 81% said this is holding their own company back in meeting sustainability goals, while 89% said if it were easier to find sustainably certified products, they would be more likely to purchase those.

“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.

Among the tools that B2B buyers said could be useful in accelerating e-procurement are purchase order and invoice, storage and sharing, approval workflows, expense management, and guided buying capabilities.

“However, the recent gains in digital transformation aren’t over yet. Business buyers now need to refine their processes, workflows, and digital strategies to take full advantage of e-procurement,” the report said.

Online rules, but concerns persist

Digging deeper into the results, Amazon found that most B2B buyers are making at least some purchases online, with only 2% buying exclusively offline. Among concerns expressed, though, are that online stores often have too many supply chain disruptions and/or shipping delays, product information is often inadequate, and it becomes more difficult to get in touch with salespeople or company representatives for customer service inquiries.

However, “despite some pain points with online purchasing, many business buyers are moving full speed ahead when it comes to digitizing their procurement processes to keep pace with their industry and customers,” Amazon said, pointing to planned investment in procurement technology investments.

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. Thirty-five percent expect to implement voice technology. Even AI is becoming more popular, with 34% saying they will use AI to optimize purchasing decisions.

Tighter budgets clash with sustainability

As procurement budgets have tightened (31% said their budget has remained flat and 22% saw a decrease), that is setting up new challenges for buyers looking to meet sustainability goals amid a high-inflation environment.

“Even though buyers are concerned about rising costs, cost-cutting measures are not the focus of most procurement programs. Rather, organizations are building their purchasing strategies around social initiatives, like supporting diverse-owned businesses and improving sustainability in purchasing practices,” the report noted. “Three of the four most important procurement priorities center around contributing to organizational CSR goals, including supporting sustainable, diverse, and local businesses.”

The top priority for procurement specialists is improving sustainability in purchasing practices, with 63% citing that as No. 1. Thirty-nine percent said supporting local businesses and 34% cited diversity in purchasing practices.

“Optimizing purchases and achieving CSR goals are not mutually exclusive — with Smart Business Buying, organizations can use search and filter features to find products from certified suppliers that are also within their price range,” Amazon said. “Considering business buyers’ most frequently cited pain point over the past 12 months was accessing a wider range of products in their price range, e-procurement can help procurement access more suppliers, reduce costs, and diversify spend.”

Easing a key pain point

E-procurement is also a potential solution to another top pain point for B2B buyers: access to product.

“Of the procurement challenges respondents faced in the past 12 months, three of the top five involved difficulties accessing the right suppliers and products. Accessing a wider range of suppliers is a common challenge, especially through traditional procurement methods,” the survey found.

Amazon concluded that procurement is becoming more of a collaborative function that is more strategic in nature, with focuses on sustainability, diversity and local sourcing emerging as key tenets of programs.

“Traditional, manual processes and legacy technology may have worked in the past, but if the last two years have taught us anything, it’s the importance of reacting to and evolving with the times,” Amazon wrote in the report’s conclusion. “In fact, the organizations that significantly experimented with and invested in new digital technologies at the beginning of the pandemic were twice as likely to report outsize revenue growth compared to their peers, according to McKinsey and Co.”

E-procurement, according to Amazon Business, is the answer to that growth.

“It’s important to note that digital transformation is a continuous journey that requires constant optimization based on ever-evolving technologies, business insights, and customer needs. And it’s not one-size-fits-all — businesses need to take the appropriate steps based on their current investments, processes, and overarching business needs, then tweak accordingly,” Amazon said.

Click for more articles by Brian Straight.

You may also like:

Amazon Business wants to improve B2B e-commerce journey

Amazon Warehousing & Distribution is company’s latest foray into logistics

 Amazon is doubling down on its warehouse strategy