2017: Third UPS study of industrial
products buyer behaviors, preferences
and perceptions
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark and the color
brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 5/17
UPS Industrial Buying
Dynamics Study:
Buyers Raise the
Bar for Suppliers
Foreword
by Matt Guffey
Vice President
UPS Segment Marketing
Despite increased competitive pressures,
the industrial distributor business model
has endured. According to this 2017
Industrial Buying Dynamics Study, traditional
distributors still capture the largest share
of industrial buyers’ spending — that’s
in spite of the dents made in recent
years by demand for e-marketplaces and
manufacturer-direct buying.
Distributors need to deliver a new level
of customer experience not only to defend
themselves from new threats, but to
win share. They need to provide a digital
customer experience that cuts across mobile
and social lines, especially if they want to
stay ahead of customer needs:
• Not only are 80% of buyers willing to switch
suppliers for a better website, but 69% of
millennial buyers will shift business to a
supplier with a mobile app.
• Over one-third of Millennials use social
media to research suppliers (vs. 24% Gen
Xers and 2% Baby Boomers).
• Distributors also need to think about
the experience after the sale, especially
returns — 43% of buyers expect returns
to be a core post-sales offering. This is
especially true for OEM and MRO parts
buyers who have expressed returns
as a core expectation, at 49% and 45%,
respectively.
Make no mistake, traditional distributors
face formidable threats. Just as they
get more comfortable with their
e-commerce capabilities, buyers are
demanding mobile buying. More Millennials
than other age groups expect services not
historically included in industrial sales. At the
same time, the next generation of buyers
are bringing their tech-savvy, non-traditional
mindsets to leadership roles.
All things considered, it’s fair to ask:
Will distributors will be able to retain and
grow their market share? The answer is yes,
but only if they stay in step with buyers’
evolving demands.
In this study we look at the factors
influencing the behaviors and preferences
of 1,500 U.S. industrial buyers across all
age groups, experience levels and a wide
range of product or commodity groups.
We then draw insights from the data that
can help companies thrive in this intensely
competitive market. Whether thriving means
expanding product lines or geographies,
or seizing on a lucrative niche, the path
forward will be as unique as a company
itself. We’re pleased to share this study
to help light the way.
Recognize Rising Threats - Page 3
Address Buyer Needs by
Product Category - Page 8
Optimize the B2B Customer
Experience - Page 14
Differentiate with Post-sales Service
and Support - Page 19
© 2017 United Parcel Service of America, Inc.
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Methodology
The 2017 U.S. Industrial
Buying Dynamics Study is
based on a survey of 1,500
buyers in the United States
between 21 and 70 years‑
old who purchase industrial
parts, products or supplies
for use in 16 industries.
Two‑thirds of respondents
were male and one‑third
female. Thirty‑three percent
of participants have more
than 10 years of tenure in
their buying role; 33% have
been in their roles between
five and 10 years; 26% have
between one and five years
of experience, and 7% have
been in their roles for up
to one year.
For added context in certain areas,
buyers were grouped by age (A) and
their company’s annual budget for
industrial products (B) to highlight
potential behavioral differences.
Also, when buyers were asked to
indicate which size distributor they
prefer to work with, Box C shows
the categories assigned.
Distributor Size
Small Single location/niche
Midsize Regional coverage
Large National/global
Generation
Millennials Ages 21-34
Generation X Ages 35-51
Baby Boomers Ages 51-70
Annual Budget
Low < $50,000
Medium $50,000 - $250,000
High $250,000 >
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The largest percentage of those surveyed purchase for general
manufacturing (27%), followed by commercial construction (12%),
contractor/service provider (12%) and residential construction (10%).
A smaller percentage of participants purchase for the automotive,
aerospace, machine shop, energy and hospitality industries, among others.
All participants either influence purchasing decisions or make purchases
in at least one of these five product categories.
• Equipment – Equipment sold in a business-to-business
transaction. The buyer of this product type may use it as capital
equipment in a service establishment, factory, warehouse
or kitting environment. Examples include powered and non-
powered tools, machinery, tooling fixtures, refrigeration
equipment and restaurant ovens.
• Final assembly OEM parts – Any parts, components
or equipment used in the final assembly of a product.
• MRO parts – Parts related to maintenance, repair and
operations including replacement gears, motors
and bearings.
• Consumables/raw materials – Any input items that are used
in a manufacturing process or equipment. This also includes
fasteners, sealants and adhesives.
• Janitorial and Sanitation – Cleaning supplies, cleaning
detergents and solvents, bathroom and hygiene products.
Participants came from companies of all sizes, with
roughly one-third reporting annual revenue of
$1 million; one-third reporting between $1 million
and $10 million; and one-third more than $10 million.
The UPS Industrial Buying Dynamics Study was also
conducted separately with 200 buyers each in China,
Mexico and in four European countries: Germany, France,
Italy and United Kingdom. Select results from these studies
are shared in this U.S. study as an interesting point of
comparison to highlight potential business opportunities.
27% of those surveyed
PURCHASE FOR GENERAL
MANUFACTURING
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Recognize Rising
Threats
Demand/Channel Shift: Rapid Growth
in Buyers Who Have Purchased from
Non-traditional Suppliers
Although distributors are credited with getting the
largest share of buyer purchases (Figure 1), Figure 2
shows that the percentage of buyers who purchased
through manufacturers and e-marketplaces has
significantly increased since the 2015 study was released.
The traditional distributor model remains competitive
in the U.S. and has the largest share of spend among
industrial buyers at 45% (Figure 1). However, Figure 2 hints
that a dramatic change may lie ahead. In this year’s study,
81% of 1,500 buyers surveyed had purchased direct from
manufacturers, compared to 64% in 2015. The number
of buyers who have purchased from e‑marketplaces has
soared from 20% in 2013 to 75% in 2017.
1
Q. What percent of your total
purchases in a year are with the
following types of suppliers?
(2017); In the 2013 study, buyers
were asked if they purchased
from a third-party website such
as Amazon Supply or Google
Shopping.
Figure 2
Percent of industrial buyers who have purchased through these supplier types
Distributors
91% 81%
(64% in 2015)
75%
(20% in 2013)
Manufacturers E‑marketplaces
E-Marketplace demand driven by higher spending and younger buyers
24%
E-Marketplace
31%
Manufacturer
45%
Distributor
Figure 1
U.S.
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Buying Policies
Buyers report being constrained in their purchasing roles. They may have to choose from a specific list
of suppliers, or from a certain selection of products, as shown in Figure 3 below.
Figure 3
Purchase
Restrictions
Base: Total
respondents and
by supplier type
Manufacturer
(M)
n = 442
E-Marketplace
(N)
n = 346
Large Distributor
(O)
n = 386
Midsize Distributor
(P)
n = 194
Small Distributor
(Q )
n = 132
Total
n = 1,500
Only allowed to
purchase from
specific suppliers
33% 34%P 32% 37%P 25% 30%
Only allowed to
purchase from a
limited list of
product types
25% 26%O 33%OPQ 20% 20% 23%
Only allowed to
purchase from
a limited list of
brands
22% 25%OP 28%OP 16% 14% 22%
Management
approvals required
for certain
purchases
47% 47% 43% 50% 51% 40%
Other 1% 1% 0 2%N 0 0
We do not have
any restrictions 28% 23% 30%M 29% 33%M 27%
Q. When
purchasing
industrial
supplies/products,
are people in
your company
restricted in
any way?
A New Generation of Buyers:
The Unique Habits of Millennials
The Millennial generation might have the most
profound impact on the future of industrial products
buying than any other. Figure 4 illustrates one of the
ways this 21-34 age group’s behavior varies from their
peers, most notably, in the percent of their purchases
they spend with e-marketplaces.
Millennials, like their other buying peers, are restricted
in their purchasing choices. As they move into the
ranks of purchasing leadership, they will most certainly
reshape purchasing policies to fit their preferences. Note
also the steep drop in distributor share after the Baby
Boomer generation of buyers. And with younger buying
groups open to purchasing through e-marketplaces, the
risk of further share loss should be a very real concern
for distributors.
Figure 4
B/C/D Statistically significant at a 95% level of confidence
UPS Marketing Research – Purchaser Insights
Distributor E-Marketplace Manufacturer
Baby Boomers
(D)
n = 425
55%BC
16%
30%
Gen X
(C)
n = 651
44%B
25%D
31%
Millennials
(B)
n = 424
37%
30%CD
33%
Total
n = 1,500
45%
24%
31%
Supplier Share
Base: Total respondents and by Generation
Q. What percent of your total purchases of industrial supplies/
products, in a year, are with the following types of suppliers?
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Understanding the Appeal of Non-traditional Suppliers: A Complicated Puzzle
When selecting a supplier, buyers first look for those who meet foundational needs of product quality,
availability and price. Again, buying restrictions will play a significant role. Once those requirements are met,
however, it’s difficult to isolate a single reason buyers gravitate toward a certain supplier type. Once buyers
are separated according to supplier preference, shown below in Figures 5 and 6, we get a slightly closer look
at what drives their choices.
Figure 5
Buyers Preferring E-Marketplaces
Free shipping is the reason more buyers say they
select e-marketplaces. With price and quick response
in the second and third spots, it’s fair to assume that
these buyers prefer a B2B experience that is closer to
a consumer’s.
Reasons for selecting E-Marketplaces
Free Shipping
Price
Quick Response to Order
Value
Reliable Delivery
Ship Where Needed
Wide Selection
Uses My Preferred Carrier
Single Carrier
User Friendly Website
36%
34%
32%
31%
30%
26%
24%
22%
22%
22%
Q. More specifically, why do you prefer to purchase
supplies/products from your preferred supplier?
Figure 6
Manufacturers
Price, high quality products and value dominate as the top
reasons for purchasing from a manufacturer, followed by
a rather steep drop in the number of buyers who chose other
reasons. It is not surprising that fewer buyers chose wide
selection as a reason they purchase from manufacturers.
Most can only sell the brands they manufacture or brand.
Q. More specifically, why do you prefer to purchase
supplies/products from your preferred supplier?
Reasons for selecting Manufacturers
Price
HQ Products
Value
Reliable Delivery
Quick Response to Order
Ship Where Needed
Customer Service
Wide Selection
Customized Products
Good Product Warranty
37%
34%
30%
25%
24%
23%
22%
22%
21%
19%
It can be argued that the appeal of non-traditional
suppliers stems from their business models.
For example, e-marketplaces can offer a wide
selection of products because the sellers own the
inventory. If the products are being fulfilled directly
from the seller’s warehouse, the e-marketplace can
further reduce their inventory management costs,
which, in turn, reduces their cost-to-serve while still
providing a wide selection of products.
Manufacturers may have a price advantage when
they are not selling through an intermediary,
but they must also consider the impact on
their existing relationship with distributors. In
many cases, they cannot sell at list prices below
their distributors’ prices. Some buyers prefer to
purchase critical parts from manufacturers to
ensure product integrity and compliance with
OEM specifications.
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Traditional distributor business models, typically
characterized by a broad portfolio, products in-stock
and good customer service, are therefore typically
capital and labor intensive. Since small distributors
can ill afford to be all things to all people, they
tend to put more focus on certain product groups
or service attributes where they feel they can
better compete.
Figure 7 shows that large and midsize distributors
are chosen by more buyers for price, value and
wide selection — it’s fair to assume this is due to
distributors’ volume discounts with manufacturers
that can often be passed down to the buyer.
Slightly more buyers choose midsize distributors
for their reliability, value and quality products.
Small distributors are most competitive in the areas
of reliability, customer service and good reputation.
Three service attributes, Customer Service, Assists
with Orders and Emergency Fulfillment, appear
higher on the list of reasons that buyers choose a
small distributor over a midsize or large distributor.
However, the percentage of buyers who choose
Customer Service as a reason they prefer a certain
size of distributor is roughly the same for each group.
Figure 7
Among Buyers Who Prefer Large, Midsize
or Small Distributors
Q. More specifically, why do you prefer to purchase supplies/
products from your [preferred supplier]?
Reasons for selecting
Large Distributors
Price
HQ Products
Value
Wide Selection
Quick Response to Order
Reliable Delivery
Ship Where Needed
Customer Service
Good Product Warranty
Free Shipping
40%
34%
33%
29%
27%
26%
22%
22%
19%
19%
40%
38%
35%
29%
28%
28%
25%
22%
22%
21%
Price
Value
HQ Products
Reliable Delivery
Wide Selection
Quick Response to Order
Customer Service
Ship Where Needed
Sales Rep
Good Product Warranty
Reasons for selecting
Midsize Distributors
Reasons for selecting
Small Distributors
Reliable Delivery
Value
Customer Service
HQ Products
Quick Response to Order
Price
Sales Rep
Wide Selection
Assists with Orders
Emergency Fulfillment
29%
28%
25%
23%
23%
22%
19%
18%
17%
17%
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Key Takeaways
Although distributors maintain the largest share of spend among U.S. industrial buyers,
they continue to face strong headwinds as buyers, especially Millennials, ramp up in their
use of non-traditional suppliers.
Monitor
• The changing demographics of your customer base
• Trends in corporate purchasing policies
Consider
• Strategic investments to bring services to parity with competitors, whether that
means other distributors, marketplaces or manufacturers
– Small distributors may consider drop-shipping from their suppliers which may
enable them to offer a wider range of SKUs without carrying additional inventory
– Midsize distributors may consider making significant improvements in online
capabilities to better compete with larger distributors and marketplaces
– Large distributors may consider enhancing their perceived strength in
personalized service
Recognize
Rising Threats
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Address Buyer Needs
by Product Category
Q. Which of the following types of industrial supplies/products does your company
purchase? Please consider catalog/stock type products, not custom-made items.
Also, include just those products your company purchases, not rents.
2
Consumables/
Raw Materials
(Adhesives, lubricants,
solvents, pipes/tubing)
Equipment
(Automation, cutting tools,
grinding tools, machinery)
Final Assembly
OEM Parts
(Electrical, hoses,
hydraulics, motors)
Janitorial and
Sanitation
(Soap, paper towels, toilet
paper, general cleaners)
MRO Parts
(Electrical, pumps,
sprockets, HVAC)
This year’s study included new
questions that explore the role that
product type plays in supplier selection
and buying habits. Buyers were asked
what types of supplies they purchased
in each of these five product categories.
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Impact of Product Type on Supplier Preference
Distributors have some success with those purchasing Consumables/Raw Materials
or MRO Parts; however, Manufacturers are preferred by and large across the
majority of product types (Figure 9).
Figure 9
Supplier Share by Product
What type of suppliers do you prefer to purchase from?
Consumables/
Raw Materials
Equipment OEM Parts Janitorial and
Sanitation
MRO Parts
Figure 8
Critical Factors in Supplier Selection by Product
What specifically do you consider when selecting a supplier?
Product-specific Needs
Driving Supplier Selection
As expected, product quality, best value and best prices
remain essential to buyers in all product categories. Those
foundational needs aside, the criteria driving supplier
selection vary. Good product warranty appears in four
of the five categories (Figure 8).
MRO Parts
Good product warranty
Customized products
In person service
OEM Parts Good product warrantyCustomized products
Equipment Good product warrantyGood selection of products
Consumables/Raw Materials Good product warrantyGood selection of products
Janitorial and Sanitation Reliable delivery timeFree shipping
Manufacturer E-marketplace Large Distributor Midsize Distributor Small Distributor
28%
23%
23%
15%
11%
35%
21%
23%
13%
8%
33%
22%
22%
14%
10%
27%
16%
31%
16%
10%
32%
22%
22%
14%
9%
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Services as a Purchase Motivator:
Ancillary Services a Powerful Influence
on OEM and MRO Parts Buyers
To get a sense for whether added-value services could
win new customers, we asked buyers if they would
shift business to a supplier who offered services that
aren’t typically considered an industrial purchase:
Insurance on Shipments and 3D Printing Services. Over
half of those who buy OEM and MRO parts said they
were likely to shift business to a supplier who provided
these services (Figure 10).
Furthermore, buyers whose primary suppliers are
e-marketplaces are much more likely to shift share for
3D Printing Services (Figure 11). It is difficult to decipher
what drives that share-shift mindset except that buyers
may find a more limited range of services through
e-marketplaces, while manufacturers or distributors
may be more inclined to offer special services to
accommodate their customers.
Figure 10
Likelihood to Shift Business due to Insurance
on Purchases
Q. In the next 3-5 years, how likely are you to shift
business to a new supplier due to…?
OEM Parts
MRO Parts
Equipment
Consumables/Raw Materials
Janitorial and Sanitation
62%
53%
46%
32%
46%
Likelihood to Shift Business due to 3D Printing Services
OEM Parts
MRO Parts
Consumables/Raw Materials
Equipment
Janitorial and Sanitation
54%
51%
42%
23%
40%
Figure 11
Offer of 3D Printing Services
Q. In the next 3-5 years, how likely are you to shift business to a new supplier due to...?
Manufacturer
(M)
E-marketplace
(N)
n = 346
Large Distributor
(O)
n = 386
Midsize Distributor
(P)
Small
Distributor
(Q )Total
42% 47%DP 59% MOPQ 29% 29% 38%
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Figure 12
Sourcing of Goods
Product Categories
and Country Sourcing
Buyers source most product categories in the United
States, yet OEM and MRO parts are sourced outside
the U.S. more than the other categories (Figure 12).
When products are sourced outside of the U.S., the
reasons were predominantly related to product
quality and reliability. MRO and OEM products are
also more likely to be needed urgently, with more
than half of orders requiring delivery within two
days (Figure 13).
Sourced outside U.S.
Q. Where do you source [product type]?
Figure 13
Delivery Time Needed
15%
Same Day Delivery 1-2 Day Delivery
40%
13%
37%
12%
52%
9%
40%
15%
51%
Q. How fast do you typically need
[product type] to be delivered?
Final Assembly/
OEM Parts
MRO
Equipment
Consumables/
Raw Materials
Janitorial and
Sanitation
Final Assembly/
OEM Parts
MRO
Equipment Consumables/
Raw Materials
Janitorial and
Sanitation
13%
26%
30%
34%
38%
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Top Three Countries for Sourcing by Product Type
As shown above in Figure 11, the vast majority of buyers source products
from the U.S. The percentage of buyers who source from China, Germany,
Canada and the United Kingdom are in the low single digits (Figure 14).
Figure 14
U.S. U.K. China Germany Canada Other
Global Perspective
Quick look at why buyers outside the U.S. source from Europe, China and Mexico:
Europe
Repair services post-sale,
logistics needs, customer
service/technical support
China
Reliable delivery time more
important across all product
types, customized products
Final Assembly/
OEM Parts
(G) n=300
3.7%
4.6%
62.2%
Consumables/
Raw Materials
(E) n=300
2.7%
2.5% 73.6%
MRO Parts
(I) n=299
3.7%
3.6%
65.8%
Equipment
(F) n=300
2.8%
3.8%
70.2%
Janitorial and
Sanitation
(H) n=301
2%
86.8%
Mexico
Wide selection
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Key Takeaways
While it’s not surprising that buyers’ needs vary by the category of products they purchase, the
data provides insight into strategies distributors can use to compete in new and different ways.
Consider
• Partnering with a logistics provider for additional services to increase service with less
capital investment
– Look into purchasing insurance on products and shipments to mitigate risk and protect
and improve cash flow
– Contract for on-demand 3D Printing services to increase selection, reduce inventory and
offer more customizable or differentiated products
– Leverage a logistics provider’s global network to ramp up service more quickly and reach
new pockets of growth
• Evaluating the viability of offering free shipping for Janitorial and Sanitation products
Address Buyer Needs
by Product Category
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Optimize the B2B
Customer Experience
Online Channels Reign — Traditional Channels
Hanging-in — Mobile and Social Gaining Traction
Forrester, an influential research and global advisory firm forecasts that global
B2B e-commerce will grow to over $1 Trillion by 2019 — or, roughly 2.3 times
B2C e-commerce.
Once again, more buyers say that online channels and company websites are
the top methods buyers use for researching suppliers and products, and for
making purchases (Figure 15). Buyers also indicate that sales representatives,
word of mouth and trade shows remain among the most popular means of
researching suppliers and products.
3
Resources for Researching a New Supplier
Base: Total respondents
n=1,500a
46%
27%
22%
43%
25%
21%
31%
24%
15%
35%
24%
17%
31%
24%
Co
mp
an
y w
eb
sit
e
On
lin
e s
ea
rch
en
gin
e
Co
mp
an
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ale
s r
ep
Wo
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mo
uth
or
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rev
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/re
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og
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en
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bli
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ns Em
ail
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icle
s/w
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ep
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ers
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So
cia
l m
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ia
(Fa
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itte
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ink
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In,
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We
b p
rod
uc
t v
ide
os
Int
ern
et
blo
gs
Mo
bil
e c
ap
ab
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ies
(M
ob
ile
ap
p o
r w
eb
sit
e)
55%
32%
24%
53%
36%
30%31%
19%
44%
29%
20%
39%39%
32%
Q. Which of the following sources do you
typically use to find out more information
about a new industrial product supplier?
Resources for Researching New Products
Base: Total respondents
n=1,500a
Figure 15
Q. Which of the following sources do you
typically use to find out more information
about new industrial supplies/products?
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Good Websites Remain a
Strong Magnet for Share-shift
Since the 2015 UPS study, buyers have been
asked if they were likely to shift some of their
spending to a supplier with a more “user-friendly
website.” Clearly, buyers continue to signal that
a user-friendly website is a powerful influence
on their spending behavior.
Likely to Shift Spend for More User-friendly Website
2015
72% 80%
2017
New Research Sources on the Radar:
Social Media and Mobile Channels
Due to the rapid rise of mobile B2B e-commerce, we
surveyed buyers on their use of mobile commerce in
business purchases. Figure 16 shows 30% of buyers are
already using mobile channels to order industrial products,
and 24% are extremely likely to do so in the future.
Figure 16
24%
30%
Current purchase via mobile
Extremely likely to order via mobile
Q. In the next 3-5 years, how
likely are you to shift business
to a new supplier due to…?
Global Perspective
The U.S. trails only China in current or intended ordering via mobile device.
43%
32%
China
24%
30%
U.S.
19%
18%
MexicoEurope
(U.K., Germany, Italy, France)
Q. Which methods do you use
to purchase industrial supplies/
products?
Current purchase via mobile Extremely likely to order via mobile
17%
14%
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BABY BOOMERS (D)
n=425
5%
10%
15%
TOTAL
n=1500
47%
19%
28%
Q. Which methods do you use to purchase
industrial supplies/products?
Mobile as a Tool for Share-shift and Global Growth
The growing power of mobile capabilities is apparent. Figure 18 shows that nearly half of all buyers
(47%) indicated they were likely to shift business to distributors that provide a mobile app. Among
Millennials the results are more dramatic in that 69% said they would shift business for a mobile app.
Mobile as a Millennial Motivator
As might be expected, mobile ordering
varies by buyer generation as well as by
the types of products being ordered.
Roughly half of Millennial and Gen X
buyers are ordering industrial products
through websites, and roughly one-third
are buying via mobile channels (Figure 17).
The two product categories most likely
to be purchased via mobile: Janitorial and
Sanitation and MRO parts.
Figure 17
Baby Boomers
18%
57%
Generation X
33%
52%
Millennials
38%
51%
Mobile
Website
Figure 18
GENERATION X (C)
n=651
52%
20%
32%
MILLENNIALS (B)
n=424
69%
31%
38%
Reasons Industrial Buyers Purchase via Mobile
53%
44%
43%
Speed
Convenience
of placing
repeat orders
Easy payment
options
Q. What are your reasons for using each purchase method?
Q. In the next 3-5 years, how likely are you
to shift business to a new supplier due to...?
Very likely Extremely likely
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More Millennial buyers chose social media than sales representatives
as important sources for researching new suppliers (Figure 19).
Figure 19Generation X and Baby Boomer
responses are provided for
comparison but are not
arranged in the order they
appeared in the survey results.
Q. Which of the following sources
do you typically use to find out
more information about a new
industrial product supplier?
42%
48% 46% 43% 46% 43%
2%
24%
38% 38% 38%
29%
METHODS OF RESEARCHING SUPPLIERS
Online Search
Engine
Social
Media
Sales
Representative
Company
Website
Generation X Baby Boomers Millennials
Global Perspective: Online and Mobile Purchasing
To varying degrees, buyers in all surveyed regions say that they are willing to shift
spending to a supplier offering the buyer experience they prefer — whether that is
via a website or mobile application.
17%
13%
19%
17%
19%
30%
43%
33%
CHINA
USA
MEXICO
EUROPE
46%
16%
20%
21%
33%
43%
53%
55%
CHINA
USA
MEXICO
EUROPE
Purchase from mobile app
Extremely likely to shift spend to availability of a mobile app
Purchase from supplier’s website
Extremely likely to shift spend to a more user-friendly website
WEBSITE MOBILE
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Key Takeaways
Online channels are a core need for industrial products buyers, and they are a primary means
of researching suppliers and purchasing from them.
Younger buyers put a higher value on mobile buying capabilities than other age groups. Nearly
70% of Millennial buyers indicated they would be likely to shift spend to suppliers who offer mobile
purchasing. Furthermore, buyers of Janitorial and Sanitation products or MRO parts express the
strongest need for mobile.
Buyers report that the greatest benefits to using mobile channels are speed of the transaction
and having easy access to order history. It is essential that any mobile experience deliver on
those expectations.
Consider
• Assess your readiness to meet the needs of the upcoming Millennial generation and establish
a plan for getting there.
• Survey customers on their satisfaction with the customer experience you provide across all
points of interaction.
• Add mobile commerce capabilities, or at the very least, ensure that existing website(s) have
“responsive design” and, therefore, adapt to provide a good mobile experience.
• Leverage mobile advantages with buyers in China, and website advantages with buyers in Mexico.
Optimize the B2B
Customer Experience
38% of millennials
ORDER ON MOBILE
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Differentiate with Post‑sales
Service and Support
Q. In the next 3-5 years, how likely are you to
shift business to a new supplier due to…?
4
From a buyer’s perspective, some midsize distributors,
and most small distributors lack the broad product
selection of large distributors, and the price and quality
advantages of large distributors, e‑marketplaces and
manufacturers.
Still, there is an unmet buyer need that small and midsize distributors may
be well-positioned to serve: Post-sales Service and Support. One-half of
buyers said they were likely to shift spending to a supplier who offered
assistance with returns, training and on-site maintenance or repairs
(Figure 20). Twenty-one percent indicated they were extremely likely
to shift share for that attribute.
Since buyers who purchase primarily from small and midsize distributors
partly for the responsive and personal service they provide, extending
that capability to include post-sales support may be an excellent fit and,
ultimately, a competitive advantage.
On-site maintenance
Buyer expectations for post sales include…
Figure 20
Post-sales interest is high, with half stating
they would shift spend to a supplier offering
assistance with returns, training and on-site
maintenance or repairs
Help with returns82%
69%
67%
On-site repairs
67% Training
21%
are extremely likely to shift
business to supplier who
offers post‑sales support
Q. Would you expect your industrial supplier
to provide the following post-sales services?
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Post-sales Demand
In the first UPS study of industrial products buyers that was fielded in 2013, we asked
buyers how frequently they contacted their suppliers for post-sales support, on a scale
from Very Frequently to Never (Figure 21). The 2017 survey also included that question but
required that buyers attach time frames to their answers ranging from Once per week or
more to Never.
To compare the results, we applied the 2013-14 frequency options to the time frames used
in the 2017 study. That comparison shows that buyers are expressing the need for more
frequent post-sales and service support (Figures 21, 22).
*Did not ask question in 2015 survey
7%
37%
29%
15%
12%
8%
21%
34%
25%
13%
Figure 21 Figure 22
2013 2017*
Very Frequently
Frequently
Occasionally
Rarely
Never
Once a week or more often
Every 2-4 weeks
Every 1-3 months
Every 4- months
Every 7-11 months
Once a year or less often
Do not use on-site maintenance
and repairs services
Frequently
Very Frequently
Occasionally
Rarely
Never
Q. Would you expect your supplier to
offer the following post-sales services?
Q. How frequently do you contact
your supplier for the following types
of post-sales service and support?
Comparison
2013 2017
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Returns Top the List of Post-sales Service Expectations
Among all 1,500 buyers, 82%, expect a supplier to offer returns as part of
their post-sales services (see horizontal bar charts). Training and on-site
maintenance and on-site repairs are expected by 69% and 67% of buyers,
respectively.
Looking at age groups, note that more Millennials and Gen X buyers expect
returns services than Baby Boomers; slightly more buyers of Final Assembly/
OEM parts expect returns than buyers of other product groups (Figure 23).
Q. Would you expect your industrial
supplier to provide the following
post-sales services?
Figure 23
Total n=1,500
Millennials (B) n=424
Gen X (C) n=651
Baby Boomers (D) n=425
Recycling
Training
Off‑site
maintenance
Disposal
Returns
On‑site
maintenance
On‑site
repairs
Janitorial and
Sanitation
MRO Parts Consumables/Raw
Materials
Equipment Final Assembly
OEM Parts
Types of ProductDemographic of Purchasers
69%
79%
71%
56%
67% 73% 79% 51% 73%
63%
78%
65%
43%
58% 62% 69% 57% 67%
59%
74%
65%
35%
57% 58% 69% 49% 62%
82%
85%
82%
77%
83% 79% 87% 76% 83%
62%
77%
65%
43%
63% 66% 72% 49% 62%
67%
79%
71%
48%
64% 70% 78% 53% 68%
67%
79%
70%
51%
64% 73% 75% 56% 69%
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Post-sales Service as a Business Driver
Buyers of OEM and MRO parts show the greatest likelihood to shift spending to a new provider for post-
sales service (Figure 24), and they are more likely to have medium or high annual budgets ($50,000 and up).
Millennial buyers are the most likely to move to a supplier for this enhanced level of support.
Figure 25
Post-sales support
55%OPQ
29%
26%
Manufacturer (M)
n=442
50%
29%
21%
Total
n=1,500
63%MOPQ
34%
29%E-marketplace (N)n=346
35%
22%
13%Mid-Size Distributor (P)n=194
42%
28%
14%Large Distributor (O)
n=386
44%
28%
16%Small Distributor (Q)n=132
Top Two Box
(Extremely/
Very Likely)
Very Likely Extremely Likely
Q. In the next 3-5 years, how likely are you
to shift business to a new supplier for…?
Q. Would you expect your supplier to offer
the following post-sales services?
U.S.
Europe
China
Mexico
43
%
30
%
30
% 31
%
27
%
34
%
23
%
31
%
30
%
24
%
32
%
37
% 42
%
40
%
38
%
53
%
52
%
49
%
48
%
29
%
On-site
maintenance
Training
Returns
On-site
repairs
Recycling
Figure 26
Global Perspective:
U.S. buyers’ post-sales expectations are highest
for returns, while buyers in other global regions
also have high expectations for on-site support,
training and recycling
Figure 24
Q. In the next 3-5 years, how likely are you to shift business to a new supplier for…?
Likelihood to Shift Business
for Post-sales Support
Likelihood to Shift Business for
Post-sales Support by Spend
Likelihood to Shift Business for
Post-sales Support by Generation
OEM Parts
MRO Parts
Equipment
Consumables/Raw Materials
Janitorial & Sanitation
64%
56%
50%
34%
47%
High
Medium
Low
58%
59%
28%
69%
56%
22%
Millennials
Gen X
Baby Boomers
Further, buyers who purchase primarily from E-marketplaces and
Manufacturers are the most likely to shift business to a supplier
offering Post-sales Service (Figure 25).
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Key Takeaways
Unprecedented change in the industrial products marketplace has closed some doors for
distributors while potentially opening another in post-sales service and support. In a crowded
and competitive industrial supplier marketplace, distributors might find post-sales service an
effective way to reinforce their value and gain share.
Consider
• Adding or enhancing post-sales services that have the greatest appeal to your buyers —
the most important of which is returns.
• Talk with a logistics provider about potentially contracting for services to enhance your
post-sales network and capabilities.
• Think about leveraging post-sales support in order to capitalize on revenue opportunities
outside of the U.S.
Differentiate Through
Post-sales Service and Support
In Closing
Traditional distributors, having evolved for decades with a classic,
inventory-heavy business model, must find new ways to counteract
rising threats from asset-light e-marketplaces, and from manufacturers
with the advantages of intellectual property rights and service
exclusivities.
Beyond what suppliers are doing to disrupt the marketplace, however,
the habits and preferences of industrial products buyers are also
undergoing significant change. They’re signaling stronger preference
for buying via mobile channels — especially among the Millennial and
Gen X generations, and among buyers of MRO and OEM parts. Many
want suppliers who can offer them 3D printing for more customized
products, and insurance products to protect their shipments and assets.
Buyers are also demanding a higher level of post-sales services such
as easy returns, training and maintenance and repairs. They’re willing to
shift share to a supplier who can meet those needs.
Clearly, industrial buying dynamics remain in a high state of flux while
suppliers of all kinds search for the optimal balance of capabilities,
services and profitability. These new dynamics in industrial buying
seem to have left traditional distributors with three options: 1) Maintain
status quo with customer service and customer experience, 2) Improve
perceived value by offering wider selection of products to a larger
geographic audience via a more user-friendly buying experience, or 3)
Become a niche player by delivering superior customer service and a
highly focused but lucrative portfolio of products.
There is little evidence supporting status quo as a viable long-term —
or short-term — strategy. Whatever path distributors take, challenging
discussions and decisions await them. But those decisions must be
made, and quickly. Buyers are increasingly open to non-traditional
sourcing alternatives. Distributors must make sure they remain one
of the desired options, or risk falling too far behind to catch up.
Learn more about the ways UPS can help industrial distributors.
© 2017 United Parcel Service of America, Inc.
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Related UPS Resources
UPS Capital® services – Financial, insurance and payment solutions tailored to supply chain
management.
UPS Quantum View® application – Integrates with existing supply chain technologies for better
visibility of inbound and outbound shipments to enable improved customer service and cash flow.
UPS Returns® services – A portfolio of solutions designed to automate returns for an improved
customer experience and more efficient operations. UPS Returns solutions can facilitate batch
returns, smooth post-sales workflow, provide customers with flexible and easy-to-understand
returns policies and reduce costs associated with product recalls, replacement warranties,
disposal and recycling.
UPS Field Stocking Locations – UPS operates over 950 field stocking locations (FSLs) worldwide
that enable our customers to position their products closer to the point of need.
UPS Access Point® network – A global network of UPS-authorized retailers and businesses that
accept and secure UPS deliveries. This service is popular with companies that operate service
networks in that it enables field service technicians to manage their schedules more efficiently,
and helps to remove the expense of carrying so-called “trunk stock.”
UPS Customs Brokerage – Expertise in customs clearance, trade consulting and trade management.
UPS Ready® Program – UPS customers get preferred access to a portfolio of software and
hardware technology providers who can help companies scale-up their e-commerce, social and
mobile capabilities.
UPS Global Logistics and Distribution – Contract warehousing, distribution solutions and fulfill-
ment services that can operate as a seamless extension of a supply chain. UPS contract services
can help to support aggressive global growth goals with less capital outlay and risk, and can help
to improve response times and competitive advantage by positioning products closer to the
point of need.
UPS Global Freight Forwarding – Brokers of air, ocean, rail, ground freight and intermodal shipments.
UPS Supply Chain Consultation – UPS supply chain professionals can facilitate analyses that often
lead to quantifiable supply chain improvements in areas such as demand planning, inventory
management and network optimization.
On-demand 3D Printing – UPS and Fast Radius offer commercial industrial 3D printing services
in a range of materials for prototypes or market-ready parts and products, often with next-
day delivery.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark and the color brown are trademarks
of United Parcel Service of America, Inc. All rights reserved. 5/17
Learn more about the ways UPS can help industrial distributors.
UPS Industrial Buying Dynamics Study: Buyers Raise the Bar for Suppliers
In this study we look at the factors influencing the behaviors and preferences of 1,500 U.S. industrial buyers across all age groups, experience levels and a wide range of product or commodity groups. We then draw insights from the data that can help companies thrive in this intensely competitive market. Whether thriving means expanding product lines or geographies, or seizing on a lucrative niche, the path forward will be as unique as a company itself.
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