3 Strategies for Differentiating Yourself as a Distributor
The UPS Industrial Buying Dynamics study reveals what motivates industrial products buyers.
Industrial distributors may be getting better at online selling but they’re facing new headwinds, according to the third UPS Industrial Buying Dynamics study of 1,500 industrial products buyers.
The latest findings show a startling uptick in buyers who have purchased industrial products from e-marketplaces—75% in 2017 compared to just 20% in 2013. Eighty-one percent have purchased direct-from-manufacturers today compared to 64% in 2015. Perhaps most surprising is that 38% of Millennials, buyers between the ages of 21-34, have made a purchase for business using a mobile device, compared to 30% of all surveyed buyers.
These findings, among others in the study, underscore that sellers need to find ways to stand apart from a growing list of competitors. The following strategies could help.
- Jump-Start Your Customers’ Digital Experience
Buyers accustomed to useful and timesaving features on websites or mobile applications for personal purchases are bringing those higher expectations to their business-to-business purchases, too. Yet few small or midsize businesses have the onsite staff needed to build and maintain a state-of-the-art digital buying experience. The UPS study, however, shows that hesitation can be costly since 80% of industrial products buyers say they’d switch suppliers for a more user-friendly website.
Simon Bhadra, Senior Manager of UPS Industrial Distributor Segment Marketing, points to both out-of-the-box and customizable technology solutions that can help companies gain more traction on improving the user experience they provide to customers across every channel.
Bhadra explains, “We frequently help to pair customers with technology partners in the UPS Ready® program who can help with anything from tech consulting through software integration, e-commerce and even mobile application development.” He adds, “It’s amazing the way some very complex problems can be solved with an existing software solution.”
- Tailor Services to Buyer Characteristics and Product Type
Standardizing and repeating processes is an enduring strategy for good reason—it helps to reduce costs and prevent errors. However, that strategy may not pay the dividends it once did. This year’s UPS study looked at how buyer needs differ by the types of products they primarily buy, by preference for a certain type of supplier, and by age group. The results show that a one-size-fits-all service strategy is less likely to fit all.
- Over two-thirds of Millennials said they would shift share to a supplier with mobile purchasing, compared to 47% of all buyers
- Millennials have the highest expectations for Post-sales Services, with Returns topping the list of expectations for all buyers (82%)
- MRO and OEM parts buyers are more likely to shift share to a supplier that offers insurance on shipping and 3D Printing
- Buyers of Janitorial and Sanitation products are more likely to order via mobile
The upshot is that suppliers face a Rubik’s Cube-like puzzle when trying to align customer needs with the right services and service levels.
Charlie Covert, Vice President of UPS Customer Solutions, explains why tailoring service offerings, or enhancing them, doesn’t necessarily require a big capital outlay. “It’s important to tap into the intellectual resources of your trading partners, your suppliers and logistics providers. The outside perspective can be invaluable and often leads to very creative solutions.” He adds, “Also consider the added-value services they offer, such as contract warehousing and distribution or post-sales services and 3D Printing. That’s often a great way, and a faster way, to test certain approaches without building out your own infrastructure.”
- Make Time to Envision the Future
Author and Futurist Alan Toffler wrote that “Change is the process by which the future invades our lives.” Indeed, there were likely few businesses prepared for the collision of advancing technology with buyer behavior. More changes await with the likes of instant order buttons, digital home assistants and autonomous equipment and vehicles. It is surely just a matter of time before those technologies and more find their way into the workplace.
In fact, global research firm Forrester predicts that B2B e-commerce will be just over twice the size of B2C e-commerce by 2020. And data from the UPS Industrial Buying Dynamics study seems to support that prediction with increasing numbers of buyers choosing digital and mobile channels to make purchases.
“There are extremely few business models in operation today that look exactly as they did 100 or even 50 years ago,” says Alan Amling, Vice President of UPS Corporate Strategy. He adds, “The world is always changing, and winners and losers are separated by how they respond to change.Get ahead of it. Embrace it, so when it happens, you’re on the right side of that change.”
Learn how to get ahead of the changes in industrial buyer behavior.
Sponsored by UPS.