As Forrester Research puts it in How to Build a Platform Business, “There are as many platform business models as there are actual business models.” That’s the case not just for B2C platform businesses, but for B2B businesses as well. To deliver the experience, and the prices that buyers want, procurement groups are turning to the platform model.
For these procurement platforms, implementing a third-party marketplace means that they can drastically broaden their selection, capture more of their customers’ purchases, and increase buyer loyalty. Buyers win, too: they’re able to find whatever they’re looking for at the right price, because competition between sellers in the marketplace naturally leads to more competitive offers, creating a dynamic pricing effect.
Coperama, owned by the NH Hotel Group, is the first procurement platform for the hospitality industry. It manages a network of over 2,000 suppliers for the hospitality industry, serving hotels across Europe and Latin America. Coperama is leading the charge by launching a Mirakl-powered Marketplace to transform its digital business.
Delivering more for international customers, with the help of marketplace sellers
For NH Hotel Group’s 380 hotels, Coperama’s vendors and pricing are almost perfectly aligned with demand. Overall, these hotels procure 90 to 95% of everything they need through Coperama.
However, Coperama’s procurement solution also serves more than 1,000 hospitality customers based in Europe, and recently, the procurement provider expanded into Latin America, beginning operations in Colombia and Mexico. These customers are using Coperama to fulfill much less of their procurement needs – typically around 23%.
Coperama is using the marketplace to better serve those buyers. As Pau Montserrat, Purchasing Processes & Administration Director at Coperama, shared at the Marketplace and Platform Summit in Paris earlier this year, “We need to cover the needs for not just our biggest client, but all of our clients. What we’re offering doesn’t match with all of our clients, so we need to onboard more vendors, and onboard more products, in order to meet the expectations for the rest.”
To close the gap, strategic sourcing wouldn’t be enough. “We need to extend our range of products we are offering,” he said. “Negotiating everything isn’t possible, because there are no economies of scale on that point.”
Enter the marketplace. Soon after launch, Coperama was able to quickly scale its offerings, bringing more than 800 providers onto the platform in just a few months. With the marketplace, Coperama gains an additional advantage: it is also able to better serve its international audience, without having to drastically scale the team that handles its supplier network. At a time when the company is expanding into Latin America, that’s a game changer.
Offering a better experience for buyers
For most buyers in the hospitality industry, the fastest way to purchase is to connect with salespeople over the phone or via email to place new orders, a process that takes place more or less offline. While comparison-shopping between vendors and offers isn’t impossible, it’s an involved process that most buyers don’t have the time to take on.
With its online marketplace, Coperama is delivering a better solution for its customers, where buyers can find whatever they need, make easy comparisons, and see alternatives in a nonintrusive way, without having to spend time sourcing new sellers and comparing offers. The marketplace is more than just a better experience for the users. It also helps users generate savings by making it easier to source the best-priced options from trusted suppliers in one centralized place.
And those options are starting to expand to include services, creating opportunities for Coperama to sell more of what its buyers want – and giving its vendors an opportunity to grow even as their margins are shrinking.
“The B2B market is changing,” Monserrat said. “Because clients can find and compare different options, the margins for vendors are getting reduced. For vendors, the way to sell more is to have more channels, but also to add more services to the products that they are selling. Without a platform, this is something that you couldn’t manage.”
The changing face of procurement
Procurement platforms like Coperama are delivering more than just renegotiated prices for buyers. They offer a simpler process that’s easier to navigate, and they reduce the time that it takes to implement new products and services.
The model also helps procurement networks generate more profit, from both new and existing clients. The wider selection that marketplaces offer can increase the share of goods and services that existing customers procure through the network, in addition to making the network more appealing to new customers. Coperama’s success is proof: third-party marketplaces are the future of procurement.
Watch the full session with Coperama, as well as other B2B and B2C sessions from the Marketplace & Platform Summit by Mirakl, on Mirakl’s YouTube channel.
Written by Maya Pattison
Senior Director of Marketing, Americas at Mirakl