Klaus Staubitzer, chief procurement officer and head of supply chain, Siemens AG

“Recent events, like the Covid-19 pandemic and focus on sustainability, have given us the opportunity to establish procurement and supply chain as a key value function instead of a simple support function,” Klaus Staubitzer, the chief procurement officer and head of supply chain at technology and engineering giant Siemens AG, says in a new report on procurement industry trends from Economist Impact and business software company SAP SE.

But the report notes that living up to that “key value” provider role isn’t easy and requires more coordination among procurement and other business departments as companies deal with ongoing supply chain threats, such as the armed conflicts in sea lanes that arose after the pandemic.

The report, “Across the procurement-verse: changing trends in the procurement function,” is based on a first-quarter 2024 global survey of 2,307 senior executives across various business operations, including supply chains, financial management and human resources as well as procurement.

The report asserts that while most executives recognize that procurement departments have made notable strides in collaboration with other departments, “procurement teams have considerable room to improve collaboration skills.”

“While 75% of executives agree that procurement collaborates effectively with the business on issues of strategic importance (up from 53% last year), only a fraction of these (18%) have high confidence in procurement doing so, and only 14% have high confidence in the application of procurement insights across the organization,” the report says. “Procurement has yet to gain the full trust of stakeholders in this area.”

The report, citing crucial trends in AI and supply chain diversification, also asserts:

• Procurement’s success in digitalization increasingly rests on its ability to adopt and master emerging technologies.

“Accelerating digitalization is the highest procurement priority for the majority of respondent organizations over the next 12-18 months, and AI adoption is a centerpiece of these efforts, cited by 44% as a top technology priority,” the report says. “The respondents make clear AI should play a key role in improving procurement process automation.”

• Procurement teams are seeking a balance between centralized and decentralized operating models.

Asked about procurement operating model changes in the next 12-18 months, survey respondents said their intentions were roughly evenly split between two directions: “One is increasing the role of centers of excellence (CoEs), which support best practices in strategic sourcing, knowledge management, performance tracking and other areas. The other is adopting a center-led model, in which the central procurement team makes decisions in key areas while leaving business units to decide on unit-specific procurement matters. CoEs complement and support a center-led approach.”

• Businesses look to reduce supply chain risk in the long term by prioritizing supplier diversification — a priority cited by 40% of surveyed executives.

“In the shorter term, meanwhile, companies are putting stronger emphasis on supply-base consolidation (26% in 2024 v. 10% in 2023) given the push to build trusted relationships to overcome supply-chain challenges,” the report says.

Procurement and supply chain teams are also using new technology applications to improve how they ensure getting the right products for their organizations.

Pushing procurement’s more valuable role

For example, the report notes that Siemens uses “a digital twin (a digital model of a real-world product, object or process) to analyze, with precision, the material cost of the parts it purchases and how they are produced.”

The report adds that Staubitzer’s  team at Siemens now also uses the tool to determine the CO2 emissions of those parts as well as the carbon footprint of the supplier’s entire operations. The survey uncovered a similar trend, noting that 46% of CPOs “prioritize carbon footprint mitigation, more than any of their counterparts.”

“Our suppliers are sometimes surprised that we have a better breakdown of these details than they have from their own calculations,” Staubitzer says.

Roman Belotserkovskiy, a partner in the Austin, Texas, office of the global management consulting firm McKinsey & Co., says the inflation trends in recent years have provided an opportunity for procurement teams to demonstrate their value and increase their prominence.

“CPOs who did well are those who went and found new sources of supply or who focused on protecting revenues or margin, rather than focusing exclusively on cost,” he says in the report.

Belotserkovskiy has also observed an increase in the number of CPOs presenting to their board of directors — another sign of increased prominence.

“That was very rare two or three years ago,” he says.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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But supply chain management is a wide area for lots of activity — including pilot initiatives and full-scale rollouts, says a new survey of 1,700 supply chain management executives from Epicor, a developer of enterprise resource planning (ERP) applications.

Supply chain managers benefit from generative AI

The survey found that a higher percentage of businesses (63%) that identify as high-growth have already integrated generative AI into their respective supply chain operations to manage cost and operational challenges. It defines high-growth businesses as those with revenue growth of 20% or more over the past three years.

Supply chain managers are integrating generative AI into digital supply chain operations across various function. According to the survey, those include:

• Product descriptions
• Customer service chatbots
• Natural language querying
• Reporting
• In-application assistance

At this point, 72% of organizations are using generative AI in customer service chatbots, survey data shows.

“This widespread implementation is attributed to the technology’s ability to streamline customer interactions across various sectors,” Epicor says.

Meanwhile, 67% of organizations currently employ generative AI for crafting product descriptions, leveraging the technology’s capacity to analyze customer sentiment and forecast market demand.

“This enables a more informed approach to product design and feature development,” according to the survey.

Additionally, businesses are also implementing machine learning most frequently in inventory optimization (45%) and demand forecasting (40%).

A big priority for the impact of automation technologies lies in increased efficiency and productivity (32%). Priorities also lie in cost savings (26%) and improved supply chain automation (23%).

“This reflects a strong belief in the potential of these technologies to drive significant improvements in supply chain management,” Epicor says.

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The company, which reported $536.9 million in 2023 revenue, up 19% from 2022, has 120,000 customers across 85 countries. Companies using the SPS retail network include W.W. Grainger Inc., The Home Depot Inc. and Target Corp.

Jason Popillion, director of technology, SPS Commerce Inc.

“SPS sits in the middle of the transactions that happen in retail — including basic transactions like purchase orders, ship notices, invoices — all those things that are key to allowing commerce to happen,” says Jason Popillion, director of technology, adding, “We also have things like inventory files in ancillary documents that show what inventory is available on hand at any moment.”

“What we’re able to do with all that data — which is really super interesting about AI — is dissect it and get analysis done in ways that we haven’t been able to do before.”

He adds: “Transactional data tell many stories about the life and cycle of our economy, customer sentiment and buying habits … what products seem to be stronger in times of the year, or how you might look for things in the coming future.”

Popillion says SPS defined its data structure to make it more understandable by AI. “We create a schema that says, ‘this is the data that we’re going to be working with; these are all the pieces that we have available.’”

As a result, “AI did a very, very, very good job of understanding the data” and produced useful machine learning evaluations related to supply chain operations, he adds.

For the last several years, SPS Commerce has been experimenting with AI. “Early tests have primarily focused on internal projects with the goal of increasing efficiency of the work we do in service of our customers along with validating effectiveness of potential market-facing solutions,” Popillion says. “In every test we run our goal is the same — find ways to help our customers run the most efficient supply chain possible.”

So far, the company says it has found AI produces levels of efficiency, including speed and accuracy, ten times higher than non-AI methods for such efforts as making demand forecasts.

For example, SPS used AI to predict order volumes for a future time period based on past order volumes over an extended time period.

“If you’re trying to think about how to plan for the upcoming holiday season, what we’re doing is looking at the last two years and see what the data is showing us, to give you an idea of what you can expect in this upcoming season,” Popillion says.

Other methods SPS is using with AI include:

• Faster onboarding of supplier product data. Using an in-house developed AI chat client tool, SPS is enabling its internal supply chain professionals to help expedite commerce for retailers by more quickly and accurately compiling retailers’ requirements for onboarding merchants’ new suppliers into the SPS retail network. “When you’re trying to get connectivity to your supplier base that’s feeding your commerce engine, the sooner you can get them on board, the sooner you can acknowledge the revenues from those suppliers,” Popillion says.

• Customer personas. To help retailers tailor marketing communications, SPS uses AI to customize marketing language to the needs of managers in particular roles in companies, such as director of sales, or who have communication preferences based on their U.S. location, such as the East Coast or in the South or West.

Popillion, who is a Certified Information Systems Security Professional, says SPS has addressed security concerns many people have regarding AI by working with established AI technology providers Microsoft Corp. and Amazon Web Services and by setting data management standards.

“It’s all about data,” he says. “It’s about training individuals so they know how to use it effectively, and it’s about creating the right access policies to allow only [authorized] people to have access to it.”

He adds that he’s noticed a shift in thinking among companies concerning AI. As with the early days of the internet, when companies realized they could use the web to grow their businesses and make them more efficient, organizations realize AI offers practical ways to improve business operations — for example, possibly generating a demand forecast in minutes instead of hours.

For now, SPS is using its AI technology internally to provide value-added services to customers as it continues to develop it, Popillion says. But he adds that SPS also expects to introduce as early as later this year AI applications that its customers will directly access and use.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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A big reason U.S. consumers and businesses are getting most of their packaging on time and undamaged can be traced to increased competition between UPS and FedEx to dominate the ecommerce logistics market, according to Parcel Monitor. Parcel Monitor said it uses data from more than 1.5 million monthly active users, 1,078 global carriers and 63,000 shipping routes for its report metrics.

“In line with the surge in ecommerce, leading logistics carriers like FedEx, USPS, and UPS have enhanced parcel delivery times through optimized routes, infrastructure upgrades, and advanced package tracking technologies,” Parcel Monitor says.

In the first quarter of 2024, FedEx and UPS implemented improvements in their average transit times to 2.08 days and 2.22 days, respectively, Parcel Monitor says. But the U.S. Postal Service faces an average transit time increase to 2.55 days “despite their recent efforts to reduce it,” according to Parcel Monitor.

“U.S. carriers are becoming increasingly adept at managing packages, reducing the incidence of issues that can erode consumer trust,” Parcel Monitor says.

In 2023:

• The issue ratio decreased by 3.6% year-over-year (YoY) to 6.4%.
• The on-time delivery ratio remained stable at 98%.
• The first-attempt delivery success rate improved by 12.2% to 97%.
• Average domestic transit times decreased by 24% to 2.56 days.

Specific transit times for leading U.S. carriers in 2023 include:

• LaserShip (1.44 days)
• OnTrac (1.47 days)
• FedEx (2.15 days)
• USPS (2.26 days)
• UPS (2.35 days)

On-time delivery rates in the fourth quarter of 2023 include:

• UPS (98.5%)
• LaserShip (89.8%)
• USPS (87.1%)
• OnTrac (83.1%)
• FedEx (67.8%)

“In an era where the immediacy of ecommerce transactions demands rapid, reliable logistics, the U.S. has become a battleground for legacy giants striving to dominate the marketplace,” says Parcel Monitor.

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The third annual Automotive Aftermarket Digital Health Report reviews nearly 13,000 product pages across eight auto parts categories on the ecommerce sites of seven merchants: RockAuto.com, Advance Auto Parts, Amazon, Auto Zone, NAPA, O’Reilly Auto Parts and Walmart. The report was produced recently by Content Status, a digital content management technology provider, and Pivotree, a digital agency and systems integrator.

For displaying products online effectively, the report notes the significance of developing:
● An effective product data taxonomy for helping online buyers discover products across multiple categories.

● Comprehensive and accurate product descriptions with images to help buyers decide on purchases and become loyal customers, leading to increased conversion rates and sales.

But the report found that only about half of the reviewed merchants’ ecommerce sites followed effective product data management procedures.

For example, it found:

● 49.4% “adhere highly to category taxonomy and intermediary category page guidelines.”

● 50% “adhere highly to product image and gallery user interface (UI) guidelines.

● 40% “adhere highly to product information and specification guidelines.”

● 66% of displayed products have only four or fewer images.

● 82% of displayed products don’t include 360-degree spin images.

● 82% of products have no videos.

The report also notes the challenges merchants face in receiving and managing often incomplete product data, often in various formats, from multiple suppliers. “Incomplete or inaccurate product information hampers your customer’s ability to make informed decisions, resulting in decreased conversion rates and diminished customer trust.”

Automotive aftermarket lags in digital content

It adds that, despite digital technology improvements for automating and streamlining data management, “the automotive aftermarket industry remains heavily reliant on manual entry, review and normalization of data,” resulting in a lack of efficiency and accuracy in managing effective online product content.

The report breaks out performance scores for the seven retailers by overall content management, data taxonomy, and content by eight auto product categories, including brakes, car batteries, fuel pumps and oil filters.

Although the report singles out Amazon and Walmart as overall leaders, its retailer scores vary widely across the multiple scoring areas. For overall content, it cites Amazon as tops for “providing more content than other retailers.”

For taxonomy, the report scores AutoZone highest, followed by NAPA, while giving Amazon a “poor” score.

Among the eight product categories, the report calls out several retailers for effective content strategies, such as Advance Auto Parts with detailed product descriptions in brake rotors and O’Reilly in spark plugs for detailed product descriptions and 360-degree images.

The report found that car batteries had the most effective content overall among all retailers, and it cited Rock Auto for providing specification documents for all of its featured battery products.

It found oil filters to have the most lacking content overall but cited Walmart and Amazon “as the clear leaders in this category by consistently providing more content.”

But while the report gave Walmart and Amazon the highest scores for oil filter product descriptions, it gave Walmart a “poor” imaging score for lacking documentation and rich images.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The post Want to sell that oil filter online? Spruce up the product data. appeared first on Digital Commerce 360.

Last week, the provider of supply chain, fulfillment and delivery management systems agreed to acquire supply chain technology company One Network Enterprises for approximately $839 million.

The deal follows two other recent acquisitions Scottsdale, Arizona-based Blue Yonder made to enhance digital supply chain operations: flexis AG, a provider of manufacturing planning technology, and Doddle, which offers reverse logistics and returns management technology.

Blue Yonder did not disclose what it is paying for flexis and Doddle, but it said the three acquisitions totaled “approximately $1 billion.”

One Network is a global provider of supply chain control towers and related technology and services designed to let companies use online dashboards to view and control the movement of goods throughout their supply chains. One Network’s technology incorporates internet-of-things (IoT) sensors and AI to monitor the movement of goods through supply chains, helping companies improve end-to-end operations from materials sourcing through production and delivery.

Duncan Angove, CEO, Blue Yonder

“Supply chains have become more complex, and as more and more companies reduce risk by diversifying sourcing of products globally, there is an increased demand for the sharing of information and resources across the whole value chain,” Blue Yonder CEO Duncan Angove says. He adds that One Network’s capabilities will enable Blue Yonder to offer “a unified, end-to-end supply chain ecosystem that is resilient enough to withstand today’s challenges.”

Flexis is based in Stuttgart, Germany, and maintains its North American office in Dublin, Ohio. The company specializes in production optimization and transportation planning and execution systems; it focuses primarily on automotive and industrial original equipment manufacturers.

Flexis strengthens Blue Yonder’s capabilities to help companies with highly configurable products and expansive supplier networks to “plan and optimize their complex production facilities,” Blue Yonder says.

Addressing the boom in EVs and digital purchasing

“Their experience meets the ever-changing demands of today’s automotive industry, which is marked by a boom in electric vehicle production, digital purchasing models, and enhanced configure-to-order customization options,” Andove says, adding, “Flexis equips manufacturers with the ability to flexibly schedule and sequence orders on their assembly lines, as well as integrate with order management systems to balance and optimize production dates based on inventory availability, material constraints, transportation schedules, and production sequences.”

Doddle provides reverse logistics and returns management technology and services to more than 900 merchants sites worldwide. Andove says Doddle brings Blue Yonder an expanded range of services, including self-service kiosks and pick-up/drop-off networks, to offer retailers and logistics providers.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Seth Catalli

A new report from technology research and advisory firm Gartner Inc. — “Predicts 2024: CPOs Adjust to Technology’s Impact on Procurement” — suggests that significant developments are on the horizon for AI in procurement.

Let’s see how.

According to Gartner, procurement is constantly evolving to address increasingly demanding requirements from the business that go well beyond cost savings. A key finding in the report is how technology, especially AI and automation, is starting to help.

Specifically, AI-based e-sourcing or autonomous sourcing solutions can increasingly take on the tasks and decision-making that traditionally would require experienced sourcing professionals to do.

This widening will allow organizations to effectively “consumerize” sourcing events. As a result, non-professional sourcing (i.e., line of business) staff can scope requirements, identify best-fit suppliers, and set up and run sourcing events. In effect, sourcing is becoming a skill, not a function.

How AI will play a bigger procurement roll

And it’s a skill that AI technology will massively support. According to Gartner, by 2026 virtual assistants and chatbots will gain traction, as 20% of organizations use them to handle internal and vendor interactions. By 2027, non-procurement specialists will execute 40% of sourcing events. By the same date, 50% of organizations will support supplier contract negotiations through AI-enabled contract risk analysis and redlining tools.

That makes sense, as interest in AI use cases for procurement has increased dramatically in 2023, by 17 times in 2023 versus 2022. This will result in a high number of AI pilots in 2024, the Gartner team predicts, as procurement functions embrace the power of this game-changing technology to increase their value across the wider business.

Technologies such as generative AI will take over most communication-focused tasks, forcing procurement staff to learn more hard technical skills to stay relevant. GenAI use cases will proliferate the full procurement process and have the potential to improve both speed and efficiency across the department.

Rest assured; procurement professionals will continue to be central decision-makers. According to the analysis, by 2029, 80% of human decisions will be augmented by GenAI. However, we will maintain our comparative advantages in human ingenuity, creativity and knowledge. The new thing GenAI adds is that it can generate new content, fill in missing information or even create sample outcomes or scenarios to situations that will ultimately play a supporting role in strategic decision-making.

Procurement pros will have to adapt to AI

As technology changes the nature of their work, procurement professionals will need to adapt. As AI becomes more prevalent in everyday operations, certain skills will be at a premium. Procurement organizations will want to rapidly automate repetitive tasks, such as PR approvals, internal and external communication, and supplier approvals, with virtual agents, enabling teams to focus on other areas.

And as the Gartner report highlights, the basis for all AI models is good data, so organizations need to cultivate those skills. From a tech skills point of view, identifying key data elements that drive decision-making will help ensure that the AI is factoring in the best data for what we want to use it for. But the human will also absolutely matter, Gartner says; procurement staff creativity will be even more valued than today, as AI’s weakness is understanding problems where there is no data or precedence.

What happens if procurement organizations choose not to adopt these strategies? Gartner’s message is clear: compared to their competitors, organizations that do not embrace AI technologies will find themselves at a cost and agility deficit.

Therefore, procurement leaders need to embrace all kinds of game-changing technology and develop closer and mutually supportive supplier relationships. They also need to start to think long-term and work to attract top talent, as skills such as critical thinking, delivering presentations and persuading stakeholders, will soon be in high demand.

By 2026, the report says, advanced proficiency in data and technology competencies will be as important as social and creative competencies (i.e., soft skills) for procurement staff.

You also need to keep your eyes on the prize: earning credibility in the C-Suite. To cite management  consultancy McKinsey, procurement leaders who demonstrate value to the enterprise can rapidly become full-fledged strategic partners to CEOs, CFOs and COOs.

That’s a great route to travel. On a final note, I’d like to highlight the practical applications of AI in procurement and the fact that real-world organizations are already using AI to make a procurement difference. UK telco giant BT, instead of just talking about GenAI, says GenAI is embedded into its sourcing platform and providing substantial value — driving double-digit cost savings across billions of pounds of annual spend.

That’s definitely a future I want a part of.

About the author

Seth Catalli is the chief revenue officer at Globality Inc., a provider AI-powered technology applications designed to improve procurement and sourcing systems.

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The post Why Gartner is right about AI taking the lead in procurement appeared first on Digital Commerce 360.

The collapse led to the closure of the Port of Baltimore, one of the largest East Coast ports in the United States by volume of cargo that passes through. Mayor Brandon Scott declared a State of Emergency — to remain in place at least 30 days — following the collapse. 

In 2023, the port imported $55.2 billion in cargo and exported $80 billion, a record for the city, Governor Wes Moore said in a statement. It is the 11th-largest port in the country.

Baltimore bridge collapse’s impact on shipping rates

Imports scheduled for the Port of Baltimore will likely be diverted to other East Coast hubs like New York; Norfolk, Virginia; or Philadelphia, said Judah Levine, head of research at online freight shipping marketplace Freightos.

Although Baltimore handles a smaller volume than those ports, the diversions could cause congestion and delays, he said. Ocean freight is entering its “slow season,” Levine noted, so it’s likely that the ships can visit other ports instead without causing significant disruptions. 

The diversions will “not create any serious supply chain problem, but things may take a day or two longer and cost just a little bit more,” ShipMatrix president Satish Jindel said in an interview. ShipMatrix tracks shipping volume and on-time performance among parcel-delivery companies.

Baltimore only handles about 13% of the volume that goes through New York and New Jersey, Freightos found.

However, if there is congestion, accompanied by long wait times, it could push up freight rates between Asia and the U.S. East Coast and Europe and the U.S., according to Levine.

Freight rates between Asia and the U.S. East Coast are more than twice as high as they were in 2019. That’s due in part to diversions from the Red Sea because of Houthi attacks on cargo ships. Rates peaked in February and have since fallen 22% to their current level of $5,284 per 40-foot equivalent unit container (FEU).

Transatlantic rates are about equivalent to 2019 rates at $1,659 per FEU, according to Freightos.

“Ocean container vessels with Baltimore as a port of call may be rerouted to alternative ports,” the alert said. “Congestion and delays should be expected throughout the US East Coast, including at Norfolk and New York/New Jersey. Due to this situation, additional expenses and service delays may be incurred for current and future shipments.”

Exporters will also have to reroute shipments by truck or rail to other nearby ports, Levine said. They, too, could face increased rates as others make the same move.

Auto industry 

Baltimore serves a sizable portion of the auto industry through its port, Jindel said, alongside farm and construction vehicles. In 2023, 847,158 cars and trucks traveled through the Port of Baltimore, more than any other U.S. port, Gov. Moore said.

Nissan, General Motors, Volvo, Volkswagen, Toyota and Jaguar Land Rover all ship cars through the Port of Baltimore.

The disruption could also impact Baltimore’s coal exports, which topped 20 million tons last year.

“There may be a slight delay in total travel time, but coal is not an urgent commodity,” Jindel said.

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Elizabeth Segovia, CEO, TradeCentric

Segovia is a former executive at information technology companies Lenovo and IBM. She also served at ecommerce services provider ChannelAdvisor (now owned by CommerceHub). Her path eventually led to TradeCentric in 2023 when she joined as its senior-most executive.

TradeCentric specializes in providing connected commerce technology. It seeks to enable buyers to access their suppliers’ ecommerce sites from within their e-procurement software. That’s done by letting customers shop for products with real-time inventory and pricing information. However, it can simultaneously be necessary to abide by companies’ individual spend management policies.

To operate, connected commerce involves such related systems as purchase order automation and invoice automation. In doing so, the technology provides companies with visibility into the entire “procure-to-pay” process.

Speaking with Digital Commerce 360, Segovia shared her insights on trends in connected commerce. She also addressed TradeCentric’s future course in supporting it. In her eyes, businesses should benefit from accessing and using real-time data on commerce transactions and customer behavior. Her comments were lightly edited and condensed from the recent interview.

Interview with Elizabeth Segovia

Digital Commerce 360: Beth, with your executive background in technology, manufacturing and ecommerce from your prior roles at Lenovo, IBM and ecommerce marketplace facilitator ChannelAdvisor, what excited you about joining TradeCentric as CEO?

Elizabeth Segovia: It’s interesting that you asked that question because TradeCentric is honestly like the perfect pull-together of my background. I grew my career in manufacturing hardware and engineering roles, so I did a lot of work around manufacturing procurement and the procure-to-pay process. And I spent a good chunk of my career really building buyer experiences for large customers, so I have a lot of understanding of what it means to serve buyers, and how they buy from you, and making that efficient and better.

At ChannelAdvisor, I learned all the things about how ecommerce businesses grow, how they transact, digitizing and transforming their commerce programs. We spent most of our time on B2C — but there were emerging B2B marketplaces — and really started to think about B2B.

This TradeCentric role really pulls all of that together and is exciting because it pulls together all of that manufacturing and procurement background and gives me an opportunity to focus on B2B. That’s super exciting.

DC360: How well are companies in general grasping the value of B2B connected commerce, with integrated ecommerce and procurement systems backed by in-depth operational data and performance analytics?

Segovia: It’s a really interesting time. It’s a nascent space. We see some real trailblazers making a lot of headway, and then we see a lot of other companies that need help and guidance and expertise to get them started or get them moving faster in the right direction.

We’re certainly seeing some faster adoption right now, and more prospects are engaging us to ask questions. And we’re seeing people with really large commerce programs who want to turn those programs over to an integrated, dedicated connected commerce program. Those are great companies to work with because their programs are already significant and they’re expanding.

But we probably see more companies on the other side, where they have been reacting to buyers’ requests. They may have 10 or 15 buyers they’re working with in a connected commerce way, and they’re starting to see results.

They’re starting to say, “Hey, these buyers are stickier. We’re seeing revenue growth. We’re seeing efficiencies on our side, and our buyers are happy we’re offering the connected service.” So they’re starting to understand there’s an opportunity here to differentiate.

DC360: There are companies seeing good results from connected commerce. Do they tend to be particular types of businesses or in particular industries?

Segovia: That was one of the questions I asked early on here. There’s not really a concentration. But there are some areas of industry where we see higher adoption rates. The life sciences industry has a pretty interesting adoption rate, and a lot of university systems procure in this way, doing more connected commerce.

In a recent survey of B2B companies, however, 61% of respondents said that more of their buyers were asking for connected commerce integration to be connected directly into their procurement system. But only about 35% of companies are doing something to meet that demand.

Yet I think everybody really wants an improved purchase experience and everybody is facing macroeconomic pressure and looking for ways to cut costs and get more efficient, so I think these solutions are industry-agnostic.

DC360: How does TradeCentric’s Business Intelligence Portal help buyers and sellers better manage procurement operations and operate more efficiently?

Segovia: The Business Intelligence Portal enables companies to see their real-time transactions and troubleshoot the transactions to make sure document transfers don’t fail. The portal also allows them to see insights they need to manage trading partner relationships, such as that a buyer tends to buy on Tuesdays or that a buyer’s purchasing volume has changed significantly.

Companies are using this data on a daily basis to manage their business. They want actionable insights and proactive alerts and monitoring.

They say, “Don’t just tell me there’s an issue; tell me what I can do about it.”

We’ll be delivering more capability through our intelligence portal as we go through 2024.

DC360: What are some of the performance metrics companies are realizing from connected commerce?

Segovia: We did a study last year with research firm Hobson & Co. and found an 80% reduction in time spent on purchase order management and a 75% reduction in time on automating invoices and doing invoice error resolution, and a 20% increase in revenue. There was also a 30% improvement in accounts receivable outstanding, collecting faster because purchase orders and invoices are matching.

DC360: How does AI fit into connected commerce trends?

Segovia: We can’t really talk about technology transformation now without talking about AI. We’ve got a lot of projects underway in our 2024 roadmap. Regarding some of the insights we talked about regarding detecting trends and behaviors in your customer data — we want to give access to more of those insights and help customers analyze their data quicker, leveraging things like natural language queries. And using ChatGPT and other ways to interact with customers, we can get to and resolve their issues faster.

Those are the sort of low-hanging fruit opportunities that we’ll be pursuing this year. But there’s more to come.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The post Q&A: New TradeCentric CEO Elizabeth Segovia on the promise of B2B connected commerce appeared first on Digital Commerce 360.

“Our efforts over 2023 led to large improvements in our core recipe across availability, speed and price competitiveness. These improvements were directly responsible for our robust share expansion throughout the year and for the step-up we saw in customer loyalty, including year-over-year growth in our active customer count by the fourth quarter,” cofounder and CEO Niraj Shah said in a written statement.

Wayfair ranks No. 10 in the Top 1000, Digital Commerce 360’s ranking of the largest online retailers in North America.

Wayfair Q4 and annual revenue

U.S. net revenue grew more quickly than total revenue, increasing 0.9% to $2.7 billion. Meanwhile, international revenue declined 2.7% to $404 million. International revenue declined year over year in each quarter of 2023. Net loss was $174 million for the quarter.

For the full year, total net revenue declined 1.8% to $12.0 billion. U.S. net revenue grew slightly, up 0.2% to $10.5 billion, while international net revenue declined 13.3% to $1.5 billion. Net loss was $738 million.

Wayfair cuts costs

In January, Wayfair cut 1,650 workers. That was 13% of its total workforce and 19% of corporate workers. The layoffs are expected to save about $280 million annually, Wayfair said. So far, the decision is paying off.

“While it is early, it does seem like we are getting more done, and faster, and at a lower cost,” Shah and cofounder Steve Conine wrote in a letter to investors.

Shah told investors that the layoffs were done with an “eye to what we thought a very efficient organizational model would be versus a cost savings target.” The furniture retailer may make “modest” additions to headcount going forward, with a continued focus on efficiency and productivity, he said.

Wayfair addresses competition

Shah said Wayfair does not currently view Shein, Temu and TikTok Shop as meaningful competitors, even as the online retailers and marketplaces expand into more home offerings. 

“What we’ve really seen is where they compete is at the very low end of the market, both low end quality wise and ticket size,” he said. “Some of them are very large advertising spenders and we have not seen them really be a player when we look at the share.”

Temu, which sells bed frames and inflatable couches among other discount goods, recently spent millions on commercials that aired during the Super Bowl.

Shipping and logistics challenges

Wayfair has been impacted by supply chain disruptions in the Red Sea, Shah said, especially for products shipped from Europe through the Suez Canal. Houthi rebels in Yemen have attacked commercial ships in the Red Sea. The Houthis have said they will continue to target Israel-bound ships while the attacks on Gaza are ongoing. Carriers are responding by rerouting shipments, including around the southern tip of Africa.

However, the disruptions are minimal compared to what Wayfair has experienced in recent years, Shah said.

“It’s important to keep in mind the minor scope of supply chain disruption this poses in contrast to the type of disruption we faced back in 2021. These new routes increased shipping time on a much more manageable basis than we faced in 2021, and availability across our catalog has seen no meaningful negative impact,” Shah said.

Container prices have also risen, “but nowhere near the order of magnitude the industry faced a few years ago when rates reached $20,000 per container during the COVID crisis,” he said.

Wayfair results

For the fourth quarter ended Dec. 31, Wayfair reported:

• Total net revenue increased 0.4% to $3.1 billion.
• Net loss was $174 million.
• Active customers declined 1.4% to 22.4 million.

For the year ended Dec. 31, Wayfair reported:

• Total net revenue declined 1.8% to $12.0 billion.
• Net loss was $738 billion.

Percentage changes may not align exactly with dollar figures due to rounding.

Check back for more earnings reports. Here’s last quarter’s Wayfair update.

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