UPS report finds generational buying preferences are changing the traditional industrial model.
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 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.
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.
The way people shop and buy is changing, and the industrial marketplace is no exception. As Millennials play an ever-increasing role, the industrial buying landscape will only continue to evolve. This year’s study examines industrial buyers – who they are, what they want, and how they buy. The Industrial Buying Dynamics Study evaluates the four major trends that are shaping the industrial buying landscape today and how they could affect your business:
- Shifting demographics & the impact of Millennial’s
- Changing procurement patterns
- Varying international sourcing habits
- The importance of post-sales support