B2B purchasing habits are changing the way sellers engage their customers, and marketplaces are at the digital forefront. In our with B2B Online, Oracle Commerce Cloud, and WBR Insights, we made some uplifting discoveries about how age groups among B2B buyers are redefining B2B sales. Digital channels, including marketplaces, have emerged as the clear, transformative favorites among the youngest buyers in the workforce—Millennials, born from 1977 to 1995.
At 31%, Millennials are the most likely to prefer marketplaces—more than either Gen-X (29%) and Baby Boomers (19%), the two other age groups in the study. But what attracts Millennials to B2B marketplaces; and why have older generations adopted marketplaces, even among their preferred channels?
Highlights from the study include:
31% of Millennials prefer marketplaces over other channels, more than any other generation
87% of B2B buyers generally purchase on marketplaces
96% of Baby Boomers choose marketplaces over traditional channels for the additional options they provide, more than any other generation does for this reason
38% of North American buyers prefer marketplaces over other channels
Addressing the Gap Between B2B Buyer Needs and Sales Experiences
Among all respondents to the study, 56% feel there is a gap between the existing experiences offered by B2B sellers and their evolving needs for purchasing. Buyers want a mix of channels to purchase from, suggesting that sellers that depend heavily on a single channel will lose opportunities to competitors.
“Ever since eCommerce giants emerged on the B2B competitive landscape… [the] majority of buyers are expected to make half or more of their work purchase[s] online,” says one respondent to the study. “This trend will likely grow as more purchasers find that procuring products and services from a website is more convenient than buying from a sales representative.”
Now, more B2B buyers generally purchase through marketplaces than other channels, where 84% buy through the RFP or tender process, the second most widely used channel. As 97% of Millennials generally buy through marketplaces, they are the driving force behind marketplace adoption among buyers.
Generations Prefer Marketplaces for Different Reasons
While Millennials are most likely to use marketplaces, B2B sellers in the study claim that Millennials now make up the majority of their entire customer base. Millennials also stand in contrast to Gen-X in terms of the types of benefits they prioritize on marketplaces and other digital channels.
For example, Millennials demand greater flexibility and more digital interactivity in their purchasing. Among the age groups, they are most likely to prioritize pre-ordering and back-ordering, scheduling orders, mobile purchasing, and live chat with customer service. They also crave transparency in terms of pricing, and competitive value without requisite negotiations found in traditional channels.
Conversely, Gen-X is most likely to prioritize convenience. With eCommerce, these buyers want to see only products they can purchase or that are specific to their companies. They also prioritize easy reordering of products, easy site search, and guided navigation.
Baby Boomers branch into marketplaces as an extension to traditional channels, namely to find additional options and wider product assortments. eCommerce purchasing may be ancillary to RFP and tender processes for this generation, which the majority of Baby Boomers prefer; but already, 19% identify marketplaces as their most preferred channel.
Specific Marketplace Advantages
An unstable market and changing needs across regions are driving abrupt changes in demand, said one senior buyer from a leading cosmetics brand. In the study, researchers identified three scenarios where a majority of respondents across age groups feel purchasing online or through a marketplace is an option or advantage. Specifically, this is when products require:
configuration or quoting (60%)
special handling and approval, such as medical products (55%)
additional services on top of physical goods (51%)
Marketplaces give B2B buyers more direct access to unique product manufacturers that otherwise would not be able to build direct-to-buyer relationships. This allows buyers to build more personalized relationships—especially useful when buying products and materials like medical equipment or devices that may require specific configurations for individual buyers.
Millennials are quick to acknowledge marketplaces for their core benefits, which also cater to evolving habits among younger age groups. Millennials expect the transparency, flexibility, personalization, and greater service options that marketplaces facilitate. But even older generations more adapted to traditional RFP and tender processes turn to marketplaces for expanded assortments and conveniences, including fast shipping and reduced friction during purchasing processes.
Digital transformation in B2B sales also addresses broader appeal among buyers. This includes buyers entrenched in the RFP or tender process and those generally interested in more efficiency, better customer service, and a wider variety of products, for whom marketplaces provide unique advantages.
About 70% of all buyers value the fewer negotiations and improved sales processes associated with marketplaces. Those buyers who have long preferred the RFP or tender process are now adopting digital environments at a universal scale. And each of the three age groups have unique preferences emerging from their use of digital environments as well.
The Evolving B2B Purchasing Habits of Baby Boomers
More respondents prefer the RFP or tender process (41%) than they do marketplaces (26%) in general, indicating a strong age gap in adoption. This is largely driven by Baby Boomers, among which 56% prefer the RFP or tender process.
But while Baby Boomers are the least likely to prefer marketplaces over other purchasing channels, they value the core features of marketplaces. Despite their strongest preferences, Baby Boomers are likely to buy through marketplaces in general, second only to Millennials.
A Digital Transformation in B2B Buying
Across generations, B2B buyers acknowledge marketplaces and other digital channels have distinct advantages over traditional sourcing. As a result, buyers are transforming internal processes and preferences, accessing the advantages of marketplace in increasingly competitive digital environments.
Buyers of all stripes need marketplaces to access the specialized products, services, and relationships to supplement or transcend traditional buying habits. As one respondent observes, “It’s high time digitization is prioritized in these transactions.”
To learn more about how generational differences and universal marketplace adoption are transforming the B2B buying landscape, download now.
Written by Laura Hare
UK Marketing Lead, Mirakl