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Industrial Buying – Here’s how you might be losing sales

Industrial Buying
Industrial buying behaviour is changing and the industry needs to keep up.

Industrial buying has undergone significant changes in recent years. The biggest contributor to these changes are due to the way the Millennial generation prefers to engage, research and buy, coupled by the rise of the Millennial in management structures within companies.

To put this into perspective, over 33% of Millennials use social media to research suppliers compared to only 2% of Baby Boomers according to the Industrial Buying Dynamics report. Furthermore, 80% of buyers are willing to switch suppliers for a better website experience, and 69% Millennial buyers will jump ship to a different supplier if it has a mobile app.

This impacts all three current Demand Channels, Manufacturer, Distributor and E-Marketplace. Currently, Distribution is still the biggest channel for Industrial buyers, but there is a clear shift in preference toward buying from Manufacturers directly, as well as E-Marketplaces.

Some industries might think that they are exempt from this trend, but the research was done on 16 Industries, and 5 major categories that covers almost every product group:

  • Equipment sold in a B2B transaction
  • Final Assembly OEM Parts (OEM = Original Equipment Manufacturing)
  • MRO parts (MRO = Maintenance, Repair, Operating Parts)
  • Consumables / Raw Materials
  • Janitorial and Sanitation

One of the major elements that are currently protecting Distributors, is Buying Policies. Policies in most companies restrict buyers from who they may buy from, and how much they can spend. As Millenials move up in management however, they will challenge the status quo, and inevitably restructure Buying Policies. This causes a big threat specifically to Distributors that haven’t adopted a digital transformation and transaction road-map.

Distributors need to up their game to stay in the race and the only way to do this is to stay in touch with the demand of the tech-savvy generation that is currently making their way up the corporate ladders across the world.

Cassie van Wyk is the main author of this blog and has years of experience in the field of channel marketing and e-commerce respectively. He has a passion for writing and sharing knowledge, and does a lot of research in order to bring factual information to all the blog visitors. Feel free to reach out at any time!

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