Evolution of the distributor value proposition
The industrial distributor business model has seen tremendous success throughout U.S. history.
Serving a vital link between manufacturers and industrial buyers, distributors have provided a layer of convenience and service to customers upstream and downstream in the value chain.
Yet distributors are at the center of unprecedented market pressures. Their customers, both manufacturers and industrial products buyers, have access to more ways to research vendors and products, and to buy and sell than ever before.
In this study of buyer behavior, it is clear that most buyers are taking advantage of the options before them, and are reevaluating the value of being loyal to an established supply base.
Buyers are also using many different methods to research distributors, making face-to-face interactions merely one channel in a long list of influences on buyer behavior.
Resilient distributors have adapted by stepping-up their e-commerce capabilities, broadening SKUs or expanding geographic coverage. Others have found a profitable market niche.
Is the traditional distributor value proposition dead? No, but this study implies that it’s being redefined by the momentum of major market forces:
- Customer demands - The transition from relationship-driven service to experience-driven
- Direct-from-manufacturer purchasing - The blurring of channel boundaries
- E-commerce - The expectation of a consumer buying experience in a B2B world
- Influence of Millennials - The race to meet the needs of a new mindset
This paper explores many dimensions of the contemporary industrial buying experience, and offers insights into areas where distributors excel, and where they may need improvement.
The 2015 UPS Industrial Buying Dynamics study can help you thrive in an age of empowered buyers and increasing competition.