B2B Buying Trends: Millennials are the Marketplace Generation
A New Generation of Buyer is About to Take the Reigns in the Workplace
The ground beneath our feet has begun to shift at workplaces around the world. Beginning around 2014, there has been an influx of a new generation of professionals. They sometimes get an unfair bad rap for being “me-first”, but in reality, they are achievement-oriented, continuous learners, collaborators, diverse, highly educated, optimistic, socially conscious technology-focused and, importantly, team players. We are talking, of course, about Millennials and they are becoming increasingly influential when it comes to B2B purchasing.
In the US alone, there’s over 80 million of them joining the workforce. In 2016, they represented 36% of the workforce. By 2020, they will represent 46% of the work force. Their influx into the business world was marked by a significant technology shift. For the first time in October 2016, mobile and tablet browsing worldwide took over from desktop browsing, signifying this demographic shift. Just like that…Millennials have become the most significant demographic group in today’s markets worldwide.
B2B’s Changing Market Dynamic
What we’ve learned in the recent report, The Next Generation of B2B Purchasing, produced by Mirakl, Oracle Commerce Cloud, and WBR Insights, is that Millennials as a demographic group are great news for marketplace operators. Those aforementioned 46% of millennials who will comprise all adults by 2020? 97% prefer to buy from marketplaces compared to any other channel. They have widely adopted the marketplace model for their own needs and it is a given that they are ascending the ranks in business, becoming the predominant B2B buyers especially beyond year 2020. What this translates into is the need for B2B site operators to start establishing their own marketplaces sooner rather than later.
Consider this. As millennials step into decision making roles, they will begin to re-evaluate long-standing relationships and legacy processes or procedures in the B2B space. As it turns out, over 73% of millennials are already decision makers in purchase products or services for their companies or their own businesses. Over 34 percent are the sole decision-makers for their company’s purchases.
Millennial B2B buyers cite Internet search and vendors’ websites as their two top means of researching products and services. Further, 82 percent of Millennial B2B buyers said mobile devices were important when researching new products and services. The Millennial B2B buyer harvests information up-front from social networks, videos, blogs, podcasts, etc.
B2B’s Inflection Point
Due to these extremely front-loaded millennial buying patterns, the marketplace model will become an inflection point of B2B purchases by 2020. Millennials gravitate towards marketplaces to make their purchases decisions, whether personal or in a business setting. This means that B2B site operators need to start establishing their own marketplaces sooner rather than later, as Millennials climb the ranks and are responsible for more purchasing decisions..
Today’s workplaces are mostly comprised of three generational groups: Millennials, born from 1982 to 1995, Gen-X, born from 1964 to 1981 (although a growing movement now classifies 1977-1983 as Xennials to reflect a blend of Gen X and Millenial tendencies) and Baby Boomers, born from 1946 to 1964. According to The Next Generation of B2B Purchasing study:
“In a broad way, age groups are uniform in their channel preferences. However, notable differences show signs of an evolutionary shift towards marketplaces and digital channels. As Baby Boomers continue to prefer the RFP or tender process and discourage all digital channels more than other generations, Millennials favor both marketplaces and digital channels more than the other two age groups in the study.
We will find that all age groups prioritize digital channels, each for different reasons. Researchers found that most Baby Boomers (56%) prefer the RFP or tender process—the greatest majority to prefer this channel among age groups, based on the age group ratios in the study. Boomers are 17% more likely than Millennials to prefer this channel and 25% more likely than Gen-X.
Millennials (31%) are most likely to prefer marketplaces, whereas Boomers (19%) are the least likely. Specifically, Millennials are 12% more likely to prefer marketplaces than Boomers. Gen-X prefers the RFP or tender process (31%) and marketplaces (29%) almost equally. Gen-X is more likely to prefer digital channels (15%) and eProcurement systems (13%) than other age groups.”
This means that B2B site operators need to start establishing their own marketplaces sooner rather than later. Digital natives who grew up with the Internet and smartphones have transformed the way B2B buyers research purchases, qualify vendors and make purchases—changing the rules of the game for marketers and product managers.
B2B Site Operators Need To Adapt
Demographics prove the Marketplace Generation is well on its way to becoming a dominant force within and outside their firms. The 80 million Millennials in the workforce will fundamentally change how business is conducted in the future. As they step into decision making roles, they will be open to re-evaluating long-standing relationships and legacy processes or procedures in the B2B space.
As we have observed, over 73% of millennials have already become decision makers in the purchase of products or services for their organizations with over 34% are the sole decision-makers. Yet, their rise to power is largely going unnoticed.
Operators that purposefully build their marketplaces to better mesh with the millennial mindset will outperform the competition. B2B marketplaces must be designed to attract and retain this vast group of B2B purchasers who will drive business growth beyond 2020. Like we said, Meet the Marketplace Generation.
McFadyen’s marketplace solution can help you quickly deploy a robust marketplace with an increased catalog selection, better customer insights, and easy drop-shipping /fulfillment by third parties. If you would like to learn more about McFadyen’s marketplace solution, write to us at firstname.lastname@example.org or connect with us on Twitter @McFadyenDigital