Amazon isn’t just millions of consumer products: the platform, in its Business version, is also a fundamental resource for the so-called procurement, that is, the purchases and procurements of organizations of all kinds.
Specifically, more than 5 million companies use it globally. At the same time, it is an unmissable place for other companies specialized in B2B, that is, in the sale of goods to other companies and not to final consumers. It is a relevant piece of the company’s supply chain, perhaps in some cases the only one. And often these supply chains tell a lot about the state of digitization of a country: “If we look at the photograph in Italy at a territorial level taken by the Digital Agenda Observatory of the Politecnico di Milano, the North-South digital gap remains a reality, which the pandemic has only highlighted when digital has supported the economy of an entire country in lockdown – explained Gerardo Di Filippo, country manager of Amazon Business Italia – As if we look at the international comparison, in the ranking of the Digital economy & Society index 2020 Italy is 25th in Europe for digitization level. At the same time, however, we also see similarities in what business customers are looking for: selection, low prices and the convenience of having digital reporting, managing permits and approval flows. But we are confident that the differences will diminish. Even before the pandemic, the feedback we received from companies showed a widespread need to find a valid partner who would help them in the digital transformation process to accelerate growth, avoiding a possible difficult transition and wasting time “.
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What big companies want when they shop
To date, Amazon Business, which in Italy organized an event called Exchange, which brought together the protagonists of the sector, is also present in the United States, United Kingdom, Germany, France, Spain, Japan, India and Canada. With us, one of the fastest growing segments is that of large corporate customers. Mib companies have grown in the last year by 200% and today Amazon Business serves more than 53% of Mib Ftse companies (it was 15% in 2019).
A study by Forrester Consulting shows that at the end of last year 87% of purchasing managers focused their business strategy on 3 principles: resilience, speed, agility. The scenario now presses on the same path and marketplace B2B come Amazon Business they are part of this context, among the privileged partners of corporate transformations.
Artificial intelligence for the supply chain
One of the strong points of Amazon Business is the artificial intelligence that helps companies to buy well and without waste: “According to a study published by Amazon Business and Wbr Insights, over 60% of purchasing managers and chief procurement officers are moving towards the world of artificial intelligence and machine learning, implementing these technologies in purchasing processes and helping companies to make the best decisions – added Di Filippo – A transformation that now also involves the analysis of data on purchases: until recently, companies should have asked for help from experts such as business intelligence, data scientist e professionisti IT which, in turn, would have created complex analysis models. Today, thanks to machine learning, it is not necessary to be a professional expert to acquire complex data: buyers can simply analyze the data through the order history of thousands of employees to make purchasing decisions ”.
Another area where machine learning is a great help to staff is the so-called guided buying: algorithms that can automatically identify the same or similar items that purchasing managers have chosen as their favorite products on the platform, while also providing convenient alternatives. Then there is the curated buying, which focuses on processes by automatically prioritizing the products that organizations need and prefer, based on a large number of parameters such as order history, buyer’s budget, industry classification systems and lines guide for purchases, provided directly by customers.
How much is Amazon Business worth in Italy and in the world
Amazon Business moves more than $ 25 billion in sales globally, more than half of which are from third-party vendors. And 2020 marked in this sense a step, in some respects irreversible, towards the digitization of all business and procurement processes, which by 2022, 75% will take place through online B2B platforms. In short, the landscape has changed definitively: “The Purchasing departments are undergoing significant changes and must become increasingly agile and digital and therefore significantly contribute to the future profitability of companies – explained the country manager of Amazon Business – This it applies to both medium and large companies operating in all sectors. At Amazon, we constantly talk to customers and see great potential to innovate on the digital shopping front, which we want to focus on and offer support. We do not have a standard formula, but we adapt our solutions according to the customer and the type of sector in which it operates. We also provide a large portfolio of tools so that every account can choose the ones that best suit them. For example, we have dedicated solutions for large companies to help them increase the efficiency of purchasing processes and reduce the total cost of the supply chain. Or we have solutions suitable for the education sector, to help the Purchasing departments of schools or university departments to reduce costs while maintaining compliance. There is no more correct path than the others “.
In our country, small and medium-sized businesses that sell on Amazon Business have generated almost 200 million euros in 2020 thanks to commercial clients including multinational companies, universities, energy companies and healthcare organizations. And since the platform came here in 2018, the sales generated by SMEs have grown by an average of more than 50% every year. At the same time, corporate customers across the country have increased spending by more than 150% year-over-year.
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Sustainability of supply
Then there is a fundamental element, that of environmental sustainability that also passes through the supply chains of companies. An aspect that is not very visible to end consumers, but which weighs heavily in terms of shipments, pollution and logistics. Amazon created, together with Global Optimism, the Climate Pledge: a commitment, open to all companies, to achieve net CO2 emissions of zero by 2040, i.e. 10 years earlier than the Paris Agreement.
And it was the first company to sign, paving the way for more than 200 global organizations that have joined and are pursuing ambitious carbon footprint reduction activities, including operational changes in the race to combat climate change: “Amazon Business contributes to these goals. – added Di Filippo – Specifically, we are working on the shipping front consolidated, always paying greater attention to making sure that all multiple purchases for our customers are shipped with a single shipment and choosing a privileged day for delivery. In addition to reducing costs and simplifying the receipt of goods, these are initiatives that go in the direction of reducing the environmental impact of this type of activity. From an independent study that Amazon commissioned to OliverWyman on the economic and environmental impact of e-commerce it is noted that buying a product in a physical store emits 1.5 to 2.9 times more CO2 than electronic purchase “.
Then there are the labels for Climate Pledge Friendly products, i.e. products with certifications that recognize their sustainability, “Thus giving customers the possibility to set catalog curation policies aimed at reducing the environmental impact of their purchases on Amazon Business”.
How to avoid supply chain waste
Supply chains aren’t perfect. There have been investigations that have discovered hundreds of thousands of new or like-new products sent to pulp. It is to be imagined that on the B2B platform things can risk getting even worse: “Procurement is a key factor in the growth and transformation of companies, but at the same time it can be a costly process for both large and large companies. small businesses – concludes the manager – to support client companies in every single step of corporate e-procurement, Amazon Business offers several functions: from the aforementioned guided buying to the new Amazon Business app, which allows corporate customers to make purchases in an even more flexible way through new budget management tools allowing you to set thresholds to avoid excessive spending, track usage in real time with ad hoc monitoring and reporting or our analytical dashboard , Amazon Business Analytics, which provides great transparency in the supply chain purchasing process, allowing customers to control their shopping activity and total purchase costs individually, by purchasing group or by type of expense. This gives companies the information they need to better control compliance with policies ”.