Better, Connected: How B2B E-commerce Marketplaces Are Transforming Global Trade
Q&A with Jayson Humphrey
Jayson Humphrey is Senior Director, Marketplace Commercial Growth Operations at Tradeshift. Jayson plays a major role in Tradeshift’s pioneering work on developing B2B eCommerce marketplaces, revolutionizing how businesses find, trade, and collaborate with each other.
We spoke with Jayson to find out more about B2B marketplaces, how they evolved to bring the benefits of consumer marketplaces to the global business ecosystem, and how marketplaces will bring much-needed resilience, agility, and insight to tomorrow’s supply chain.
Can you give us your quick introduction to what eCommerce B2B marketplaces are and how they work?
Before joining Tradeshift I managed a business development group that worked with Amazon.com, eBay, Alibaba, and other major global e-commerce marketplaces. It was an excellent experience to see behind the scenes what drives their growth and work with suppliers to understand what’s driving demand for buyers.
A lot of the same principles are driving e-commerce marketplace interest in the B2B world. Ultimately, it’s about bringing the B2C experience to the way businesses interact and trade with each other: the same convenience and ease of use, of course, but with robust processes for governance, compliance, and integration on the back end.
Given how successful consumer marketplaces have been, and for how long, why has innovation been slower in the B2B eCommerce space?
Earlier in my career, I was struck by how business technology is always lagging behind consumer platforms in terms of UX, speed, and agility. But it is dangerous to make a like-for-like comparison: there are some marked differences between the needs of consumers and businesses, and B2B eCommerce marketplaces require a range of specific infrastructure, expertise, data, and existing relationships to be successful.
Tradeshift’s roots are in B2B, and a huge amount of our focus over recent years has been this digitalization of business relationships – for example, in payment automation. We understand the intricacies, processes, and controls that are required for B2B buyers and sellers to connect and transact freely. At the same time, we have always prided ourselves on providing a fully digital B2C user experience for anyone who uses our platform.
In truth, there aren’t many tech players that have the ability to make a disruptive impact in the B2B space, and that’s what attracted me to Tradeshift. We’re the only technology vendor out there with a solution that’s been designed to address the needs of operators, buyers, and sellers at the same time. Tradeshift’s mission is to connect every company in the world, creating economic opportunity for all. B2B marketplaces are a big part of making that vision a reality.
Tradeshift often talks about ‘network marketplaces’, but it’s quite a new concept and many people may be unfamiliar with it. What’s a good way to explain this new model of trading relationships?
A good analogy is to compare network marketplaces to the way we access and consume content on our televisions today. Not so long ago, you’d pay a yearly subscription to a cable provider and get access to a pre-set number of channels. There was a level of flexibility in terms of the package, but there were fairly defined limits.
Streaming changed all of that. Today, cloud-based platforms like Roku effectively enable you to create and curate an experience that is entirely built around your content preferences. If you’re a Marvel fan, then you can download the Disney App; if you want something to entertain the kids, download Cocomelon, if you’re a big fan of reality TV – well, there’s an app for that too.
The network marketplace model works in very much the same way. Tradeshift provides the platform, while marketplace operators act as the content providers. For example, one of our partners, Dooka, operates a marketplace on Tradeshift that connects large enterprise buyers in Africa with pre-vetted suppliers across the African subcontinent.
For buyers, the network marketplace model means being able to customize and curate an experience that is precisely in line with their needs. A large automotive manufacturer, for example, may choose to join one marketplace for parts and materials, another marketplace for office supplies, and a different marketplace for office supplies.
Each eCommerce B2B marketplace is managed by a marketplace operator, which brings sellers together with buyers according to a specific demand. Buyers benefit from the enormous economies of scale that marketplace operators provide, while the Tradeshift platform ensures that the user interface and the overall experience remain consistent, irrespective of what they are purchasing.
You’ve just mentioned some of the flaws in traditional processes that B2B eCommerce marketplaces solve. Can you tell us a bit more about how this model will relieve the pressure on procurement professionals?
Procurement teams today spend an inordinate amount of time dealing with low-value tail spend requests. As long as that continues, there is little to no chance that procurement will evolve into the strategic function it really should be. But the B2B marketplace advantage goes way beyond the procurement team.
B2B eCommerce marketplaces break down silos and unify information and relationships in one place. They are an essential tool for the digital transformation officer tasked with transforming the business’s operations to meet the millennial generation’s experiential expectations.
Likewise, for the person taking charge of the enterprise’s ESG commitments, marketplaces that provide access to pre-vetted sellers can short-cut the process of ensuring every supplier reflects the high standards to which large organizations aspire – and which their customers expect.
B2B marketplaces provide invaluable help to overstretched finance departments when they look to track spend and prevent the accounting “black holes” that occur when frustrated employees bypass complex procurement systems and make purchases using personal credit cards.
Meanwhile, the senior leadership is losing sleep over how to maintain resilience in an increasingly wild and chaotic world. The increasing complexity and inter-reliance of modern supply chains make them more vulnerable to disruption, whether from war, weather, pandemics, or other Black Swans.
If a business needs to make a sudden, strategic pivot – to react to supply chain disruption, say, or to introduce a new range of products or services, the network marketplace model offers strategic agility that enables businesses to turn on a dime and implement a new strategy quickly and effectively.
What else does the future hold for B2B eCommerce marketplaces?
If we look out five years from now, B2B buying is going to look a lot like the Netflix or Apple TV kind of consumption model I mentioned earlier. You have this network that suppliers and buyers can tap into and access an incredibly powerful network effect, with operators running a range of different B2B marketplaces to serve different needs.
This model isn’t about putting procurement teams out of work. Far from it; they are the experts in this field. The B2B marketplace model and the technologies which underpin it are about giving these experts the time and tools they need to take a step up into more strategic areas of procurement. The cost of that transformation is significantly reduced because of the technology that guarantees access to the goods and services you need, at the right time, in the right place, and at the right cost.