UPS Study Reveals That Industrial Distributors Must Adapt Selling Model To Remain Competitive

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The FINANCIAL — The UPS Industrial Buying Dynamics study, conducted with 719 purchasing professionals in France, Germany, Italy and the United Kingdom, reveals changing market conditions impacting the traditional business model of industrial distributors. Increased Direct-from-Manufacturer (DfM) purchases and B2B e-Commerce expectations are forcing distributors to adopt their selling model. 

More and more industrial customers are purchasing goods directly from the manufacturer. The study found that 65% are already bypassing industrial distributors and an additional 30% are currently considering to purchase DfM, indicating that industrial distributors must embrace the full potential of e-Commerce channels and offer a superior buying experience if they want to maintain their positions on the market, according to UPS.

Survey findings show that more than 50% of the European industrial supplies buyers are sourcing and buying online with many (42%) spending more than half of their budget in this way. Furthermore, 75% of respondents said they would shift spending to a distributor with a more user-friendly website and better customer service.

“Once price and quality standards are met, buyers are willing to explore vendors that better fit their needs, whether because of a more convenient website, a better service offering or simply quicker answers to product questions,” said Scott Aubuchon, Vice President for Marketing, UPS Europe. “To maintain their market position, distributors must adapt their selling model and provide excellent service.”

A large portion of industrial customers surveyed (78%) also expect their distributors to offer them more on-site, post-sales services, such as installation, repairs and maintenance.  The ability of distributors to offer value-added services and provide a consistent customer experience will be key to industrial distributor success in the future.  

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Additional findings and insights are available in the UPS Industrial Buying Dynamics Survey executive summary, which can be downloaded via the UPS Pressroom. The study, which was conducted in March 2015, offers insights into key factors driving the decisions of those who buy or influence the purchase of industrial products. The study was conducted online using trusted business-to-business panels.

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, and insurance and financial services.

 

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