Volume 2, Issue 10 – May 31st, 2014
A shift is underway for the distributors of industrial supplies and the e-commerce experience they provide to their customers, according to research recently released by UPS.
In 2013, more than 63% of industrial supply buyers said they made purchases online, with half of them spending at least 50% of their annual budget with suppliers who have an e-commerce platform.
The researchers said this preference for e-commerce purchases offers potential growth opportunities for distributors of industrial supplies by helping them reach buyers who are using the Web to expand beyond their existing supplier base.
“Sales representatives and other methods are still in demand, but the study shows B2B and B2C purchasing habits are becoming more similar,” said Brian Littlefield, industrial distribution director at UPS. “The findings underscore the need for industrial suppliers’ e-commerce sites to offer a positive customer experience, much like B2C companies.”
He added, “Distributors’ e-commerce websites are opening new routes for customers.” Of those surveyed, 34% said they made online purchases outside their existing supplier base in the last year.
UPS joined with TNS, a global market research firm, to survey 1,500 U.S. industrial supplies purchasers about their e-commerce perceptions.
The vast majority of respondents said their experience with vendors’ e-commerce sites are the same (56%) or better (37%) than the consumer sites they use for personal purchases.
However, that doesn’t indicate complete satisfaction regarding their experience with either B2C or B2B sites, the researchers warned.
Although industrial supply purchasers are embracing e-commerce, they believe traditional purchasing capabilities are still important, along with best-in-class product quality, purchase visibility and delivery speed. They also still want access to traditional sales support capabilities, such as printed catalogs and access to a sales representative.
They cited post-sales support as being particularly important, with 68% indicating they would be more likely to do business with a new supplier if its website had strong post-sales service and support.
Among the top 17 criteria buyers cited for deciding whether to buy online, price was No. 3, barely edging out No. 4, which was delivery when products are needed (63% said this was very or extremely important). At No. 5 were shipping costs. (Nos. 1 and 2 were product quality and product availability, respectively).
Buyers want to see accurate shipping costs (87%) and estimated delivery dates (85%) before they buy, and 85% indicate that it’s important to have discounted shipping for large orders as well as tracking information.
Among the benefits of purchasing online, knowing shipping costs prior to making an order was cited by 64% while the ability to see real-time product availability was chosen by 63%.
Opportunity exists in making the returns process more streamlined and convenient for B2B customers, with the key needs being ease, speed and flexibility, the researchers said.
Most buyers who make returns (53%) think the returns process could be improved by including a pre-printed return shipping label with the original delivery, and 40% think the ability to handle all aspects of a return online would help.
Responses differed based on annual spending, the survey found. Buyers that spend $250,000 and more annually tend to favor handling all aspects of returns online, but those spending less than $50,000 more often tend to value more returning products to a physical location.