5 Ways Millennials Are Changing The Way of Vendor Procurement

This year, Millennials are projected to become the generation with the highest concentration in the workforce. We’re talking here, of course about the huge group of Americans born between 1980 and the mid-2000s. According to a report by the U.S. Bureau of Labor Statistics, they are already the largest generation, representing about a third of the U.S. population.

As the oldest Millennials are now in their early to mid-thirties, they’re becoming a more important force in the American economy and workplace. So it stands to reason that as their influence is seen more and more in the business world, the styles and approach of the Millennial generation will be seen in Vendor Procurement as well. As reported in a study by Google and Millward Brown Digital, millennials now comprise almost half of the population of B2B purchasers. Let’s take a look the ways this generation differs from some of their predecessors.

A recent survey conducted by Elance oDesk and Millennial Branding shows that Millennials are  already starting to change traditional company structures. Members of this generation are  considered to be more narcissistic, creative, adaptable, and open to change than the  Generation X-ers who came before them. But how will these values influence the B2B procurement process?

The IBM Institute for Business Value released a study this year entitled, To Buy Or Not To Buy – How Millennials are reshaping B2B marketing. In the study, more than 700 Millennials, Gen-Xers, and Baby Boomers were surveyed, all influencers of their companies’ purchasing decisions. Not surprisingly, there are some fundamental generational differences in their approaches.

1. Millennials Don’t Make Decisions In Isolation. In sharp contrast with Baby Boomers (those born between 1946 and 1964), Millennials, as well as their counterparts in Generation X (those born between the mid-1960s and 1970s) rely more on the input ofothers. In fact, 56% of Millennials and 64% of Gen X report that they make better decisions with consensus of their teams.

2. Reliance on Data for Decision Making. The IBM study reports that data is “a key ingredient in Millennials’ decision-making process.” It’s true that members of Generation X as well as many Boomers are tech- and internet-savvy. But Millennials are natively so. They don’t remember a time when the wealth of digital information on the internet was not available at their fingertips. 53% of Millennials included in the survey said that they employ analytics when making their purchasing choices.

3. Millennials Shop Differently. They use the digital grapevine, with a staggering 93% stating that they usually read online reviews before making a purchasing decision on a personal level. Similarly, 89% rely more upon recommendations of their peers than they do on information put out by companies’ marketing claims. And again, 93% said they bought products after receiving recommendations from relatives or friends. Research shows that today’s B2B buyers are typically 57% of the way toward making a decision before they even contact a vendor.

4. B2C Habits Influence B2B Purchasing. A study by Accenture and hybris software (an SAP company) shows the ways in which buyers are now shopping for B2B purchases in the same ways that they have learned to shop for B2C. In addition to doing their B2B shopping on many of the same sites they use for consumer purchases, they have similar expectations. More than half of enterprise buyers (58%) are looking for ratings and reviews of the products and services they’re researching.

5. Millennials Share Their Experiences. Just as they turn to their social networks and peer reviews, this generation is not shy about sharing their purchasing experiences for others. More than half (59%) of Millennials tend to post details of these experiences online. However, they are much more likely to praise the vendors in they’ve had good experiences with than they are to post negative reviews. Why hold back? Having come of age in the digital era, they understand all too well the ramifications of their negative posts going viral. Only about half as many vent their frustrations publicly in comparison to the preceding generations.

As Millennials continue to fill up and increasing portion of procurement population, vendors will need to adjust their approaches to accommodate the philosophy and style of this generation. While ultimately they too rely upon personal contact with vendors, they are accustomed to readily available online data, analytics and peer reviews. Successful vendors will have to understand and embrace these channels in order to satisfy these needs.

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