Business must offer faster, more customer-focused services to accommodate evolving customer demands as the demographics of industrial buyers include a growing portion of millennials among baby boomers and Generation X employees, according to a UPS report released today.
This new wave of buyers is shaping the industrial buying landscape, UPS said in its fourth "Industrial Buying Dynamics Study." "The rise of Millennials in the workplace ushers in a new era that challenges long-standing industry norms," Brooke Yamini, vice president of marketing operations at UPS, said in a release. "Not only do these young, tech-savvy customers want orders delivered quickly, they are also influenced by additional services and post-sales support."
The 2019 version of the study is based on a survey of more than 1,500 buyers in the U.S. between 22 and 70 years of age who purchase industrial parts, products, or supplies for use in 15 industries. Its results defined four ways these new buyers are shaking up the industry, including demographics, procurement patterns, international sourcing, and post-sales support.
For demographics, 38 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, UPS said. Millennials also tend to consider factors including sustainability and after-sales support over more traditional factors like quality and price.
In 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—as 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.
Robust international sourcing is on the rise, as 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.
Finally, post-sales support 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, as 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.
