Generational Disruption Shifts Norms For Industrial Distributors
June 10 2019 - 9:30AM
As the demographics of industrial buyers shift, businesses must
adapt to accommodate evolving customer demands and preferences by
offering faster, more customer-focused services.
The fourth UPS (NYSE:UPS) Industrial Buying Dynamics study
revealed how a new wave of buyers is shaping the industrial buying
landscape today.
“The rise of Millennials in the workplace ushers in a new era
that challenges long-standing industry norms,” said Brooke Yamini,
Vice President of Marketing Operations at UPS. “Not only do these
young, tech-savvy customers want orders delivered quickly, they are
also influenced by additional services and post-sales support.”
The UPS study revealed four ways these new buyers are shaking up
the industry.
Shifting Demographics. Thirty-eight percent of this
year’s survey respondents were Millennials, an increase of 10
percentage points from 2017. This growing generation of buyers is
less loyal to tradition, often preferring to conduct research via
social media rather than contacting a sales representative.
Millennials also tend to consider factors including sustainability
and after-sales support over more traditional factors like quality
and price. However, despite their growing influence, Millennial
buyers are still more restricted in what and how much they can buy
versus the more experienced Baby Boomer generation. Shifting
Procurement Patterns. Buyers continue to shift spending,
purchasing directly from manufacturers or online marketplaces.
Millennials show a growing preference for buying directly from
manufacturers — an increase of almost 20 percent in the past two
years. During the past two years, distributors saw a 15 percent
decrease in purchase share to 38 percent, while manufacturers and
online marketplaces have grown 10 percent and 17 percent,
respectively.
Shifting International Sourcing. Robust international
sourcing is on the rise. Millennial buyers say they order nearly
half their products internationally – far more than Baby Boomers or
Generation X buyers. Survey respondents are also willing to pay
more for faster service across borders — 26 percent expect orders
in two days, while 81 percent say their orders sometimes require
same-day delivery.
Shifting Post-Sales Support. Assistance after a sale
continues to be an important component of business deals. While
this trend is growing across all buyer generations and product
groups, Millennials’ need for flexibility influences this shift. In
fact, 87 percent of Millennials indicated they are likely to shift
their business to attain better post-sales support in the next
three to five years.
For manufacturers, online markets and distributors, the message
is clear: Industrial buying in 2019 requires greater analysis and
customization than in the past. Knowing the buyer — age,
background, etc. — now matters more.
Additional findings and insights are available in the UPS
Industrial Buying Dynamics executive summary, which can be
downloaded at ups.com/insight.
UPS serves manufacturers, distributors and online sellers of
industrial products with a variety of supply chain services
tailored to meet rising consumer demands. The UPS Ready Program
gives UPS customers preferred access to a portfolio of software and
hardware technology providers who can help them scale their
e-commerce, social and mobile capabilities. For international
sellers, UPS Customs Brokerage provides expertise in customs
clearance, trade consulting and trade management. In addition, UPS
Returns services give businesses the ability to provide quality
post-sales support with flexible and easy returns.
The 2019 U.S. Industrial Buying Dynamics Study is based on a
survey of more than 1,500 buyers in the United States between 22
and 70 years of age who purchase industrial parts, products or
supplies for use in 15 industries.
Join UPS experts on July 10, 2019 at 1 p.m. ET for an
informative webinar on the changing landscape of industrial buying.
We’ll explore how the trends and disruptions outlined in the
Industrial Buying Dynamics study are shaping the buying landscape
today. Click here to register.
About UPS
UPS (NYSE: UPS) is a global leader in logistics, offering a
broad range of solutions including transporting packages and
freight; facilitating international trade, and deploying advanced
technology to more efficiently manage the world of business.
Headquartered in Atlanta, UPS serves more than 220 countries and
territories worldwide. UPS was awarded America’s Best Customer
Service company for Shipping and Delivery services by Newsweek
magazine; Forbes Most Valuable Brand in Transportation; and top
rankings on the JUST 100 list for social responsibility, the Dow
Jones Sustainability World Index, and the Harris Poll Reputation
Quotient, among other prestigious rankings and awards. The company
can be found on the web at ups.com or pressroom.ups.com and its
corporate blog can be found at longitudes.ups.com. The company’s
sustainability eNewsletter, UPS Horizons, can be found
at ups.com/sustainabilitynewsletter. To get UPS news direct,
follow @UPS_News on Twitter.
Samantha Slappey
404-828-3595
sslappey@ups.com
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