UPS study finds industrial distributors must adapt

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A UPS study has found changing market conditions are impacting the traditional business model of industrial distributors.

The Industrial Buying Dynamics study says increased direct-from-manufacturer (DfM) purchases and B2B e-commerce expectations, are forcing distributors to adopt their selling model and more and more industrial customers are purchasing goods directly from the manufacturer.

It found 65 per cent are already bypassing industrial distributors and an additional 30 per cent are considering to purchase DfM. This it says, indicates 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.

Survey findings show more than 50 per cent of the European industrial supplies buyers are sourcing and buying online with many (42 per cent) spending more than half of their budget in this way.

Of respondents, 75 per cent say 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,” says UPS Europe vice president for marketing, Scott Aubuchon.

“To maintain their market position, distributors must adapt their selling model and provide excellent service,” Aubuchon adds.

The study also found a large portion of industrial customers surveyed (78 per cent) 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 also be key to industrial distributor success in the future.

The study was conducted online in March 2015 and involved 719 purchasing professionals in France, Germany, Italy and the UK.