Consumer Retail Trends Affecting eProcurement
At some point in almost every briefing, an eProcurement software provider will tell Levvel Research analysts: “Our solution has an Amazon-like shopping experience”. For years now, these providers have been on a mission to make their solutions’ buying capabilities as user friendly as possible, a development effort that goes hand-in-hand with consumers’ increased online purchasing as opposed to buying in traditional, brick-and-mortar stores.
Modernizing business procurement is definitely a necessity in order to keep up with the changing back-office workforce. A significant portion of today’s workers came of age during the digital revolution, and many entry level employees don’t even remember a world where online shopping wasn’t an option. The web-based experience is certainly different from traditional purchasing — rather than leveraging a face-to-face relationship between a salesperson and a customer, eCommerce websites can cater the shopping experience to each customer using data analytics, building a “relationship” with the visitor based on the attributes of the items she shows interest in (e.g., colors, styles, sizes, price ranges, etc.) and her purchasing habits (when she buys an item, what other items she buys in tangent, whether she regularly uses discounts, etc.).
As online marketplaces have given consumers’ access to a greater variety of goods, services, and price points, electronic procurement (eProcurement) software has evolved so as to bring that same value to business purchasers. There are a few key ways that modern eProcurement solutions are clearly borrowing from leading eCommerce companies, including across features and functionality, services, and even supplier management. These include…
Punch-out catalogs: In software with punch-out catalogs, the supplier’s website and catalog of goods are hosted and maintained by the supplier. The user is directed to a version of the supplier’s website that is catered to their line of business. All purchasing data is then transferred from the eProcurement software to the organization’s ERP. The punch-out catalog is one of the easiest ways eProcurement providers bring the online shopping environment to business-related spend, particularly because it places much of the onus on the suppliers themselves.
Search, filtering, and sorting: If a supplier has a variety of items, it can be difficult for the buyer to see which of the items best suits its needs. eProcurement solutions have kept up with eCommerce by offering similar advanced filtering and sorting functionality. These give shoppers more control over shopping, and ensure that they choose the right item at the right price, potentially lowering overall organizational spend. Not only do corporate buyers have the ability to filter on laptop storage capacity, the color of pens, and monitor size, they can also filter out items from suppliers that the company doesn’t have a contract with. Search functionality has also come a long way from eProcurement’s earlier days — software now autocorrects and autocompletes to make locating goods even easier.
Sustainability/social responsibility: Social responsibility is a popular topic in the world of business ethics today. Consumers have shown that they care about the source of their goods via protests methods like boycotting and online demonstrations, and, essentially, with their wallets. In reaction, companies have started prioritizing social responsibility. This has also affected Business-to-Business spend. eProcurement and supplier information management (SIM) systems help companies “know a supplier’s supplier” by regularly checking suppliers against international blacklists or requiring documentation and verification of a supplier’s commitment to sustainability and social responsibility. These measures are often used to highlight environmentally responsible companies and woman/minority owned businesses.
Voice assistants and chatbots: Amazon’s Echo, Apple’s Siri, Google Assistant, Microsoft’s Cortana…voice assistants and chatbots are everywhere these days. The internet is rife with eCommerce websites that have message boxes popping up offering to help visitors out with their purchases. Many software providers in the eProcurement space are now rolling out their own virtual assistants, which — when utilized well — guide buyers through a custom, intelligent purchasing journey, and can even be useful in creating and visualizing analytics dashboards and purchasing documents. These assistants can also warn employees of stock-outs and recommend similar items as replacements, while providing an estimated restocking date. When the natural language processing of assistants is combined with actionable analytics and recommendation engines, this technology truly shines. (Levvel Research believes most eProcurement providers have not fully harnessed the potential of the virtual assistant feature, and we caution providers against integrating this technology without fully mapping out how it can actually be useful to the end user.)
Recommendations: In order to offer visitors buying suggestions that could lead to more purchases and revenue, eCommerce websites keep track of every item shoppers look at, including the product’s function, style, color. The website’s technology will identify and suggest items of a similar use and/or from the same product line, and items that are frequently purchased together at the same time. Leveraging this same machine learning technology, eProcurement solutions are able to carry out similar actions, such as giving employees a selection of items that are usually purchased alongside goods in their carts and providing recommendations on products that can be purchased as replacements in the event of their original item being out of stock. This is very useful from an efficiency standpoint, as it reduces search time for procurement staff, and helps non-procurement buyers that might not make regular purchases.
Fundamentally, business purchasing and consumer purchasing have different goals: consumer purchasing is designed to get customers to buy as much as possible whereas business spend is more focused on reliability and quality of goods. But increasingly, people have expressed interest in having their experience in the workplace replicate their at-home shopping.
The ideal end result for procurement departments is getting high quality products and materials to employees that need them, when they need them, at a good price, and with the right suppliers. However, in order to do this, employees must be willing to use the established procedures and methods for purchasing. Modern eProcurement software is able to accomplish all of these goals and appease all of these needs by providing an easy to use solution that employees will want to use. Updating the buying journey for businesses is a net positive for all parties involved.