Online buyers purchasing industrial products for their businesses are increasingly shifting to new suppliers who can provide a more user-friendly website, better price or better respond to the individual requirements, a recent UPS survey revealed.
Conducted by global research firm TNS, the UPS Industrial Buying Dynamic study showed that buyers are more and more willing to “purchase outside of their existing supply base”. 38% of the respondents admitted to have purchased products from a new supplier last year, up from 34% in 2013, while the majority (72%) said they would shift spending to a distributor with a more user-friendly website.
The research identified four significant market ‘forces’ that are redefining the relationships between industrial distributors and their customers:
1. Increasing buyer expectations require a more integrated and user-friendly purchase process
2. Growth of Direct-from-Manufacturer purchasing and online marketplaces
3. The universal acceptance of, and demand for, B2B e-commerce
4. Meeting the purchasing habits of Millennials as they become the next generation of purchasing leaders
These forces can potentially impact on distributors and knowing those can help them identify and address their strengths and weaknesses, UPS explained.
The research also showed that the ability of the suppliers to respond to changing customer demands for product variety and knowledge, convenience, delivery speed and competitive price can vary according to the respective market nice. For example, buyers are least satisfied in the areas of added-value services (25%) and physical locations (30%), the study found.
“Customer loyalty today is built on a different foundation than the one distributors have built over generations,” Brian Littlefield, UPS director of industrial manufacturing and distribution marketing, said. “Once price and quality standards are met, buyers are willing to explore vendors that better fit their needs, whether for a more convenient website, a better price, or simply someone who quickly answers product questions.”
The UPS Industrial Buying Dynamics study surveyed 1,500 purchasing professionals in February and March this year offering insights to key factors that drive the decisions of those who buy or influence the purchase of industrial products. It provides distributors insights into their position in the marketplace and highlights potential areas for improvement and growth. This is the second UPS-initiated study of industrial buyers since 2013.
UPS serves manufacturers and distributors of industrial products with comprehensive supply chain services that include end-to-end visibility, warehousing, inventory management, inspections, multi-modal global delivery, returns handling, e-commerce, insurance and financial services.
