With the spread of sourcing directly from the manufacturer and through online marketplaces, the industrial value chain is changing across Europe.
The results of UPS’s 2021 Industrial Buying Dynamics survey reflect the views of 800 European purchasing leaders. According to the survey, as early as 2021, 90% of industrial purchasers will also buy directly from the manufacturer – an increase of 27% since 2015, when UPS last conducted this research. In addition, the amount of money spent by manufacturers shows a significant increase: purchases directly from the manufacturer now account for 44% of European purchases.
Excellence at the forefront
The main factor, according to the research, is the quality of after-sales services, as 86% of purchasers now expect these services from their partners. This figure is an 8% increase since 2015. While the most anticipated after-sales service is still an efficient return process, customers face much more complex needs. On-site maintenance and repair, for example, is considered a top priority by 70% of respondents. In fact, after-sales services can even boost customer loyalty and thus profitability, as 55% of respondents indicated that they would even switch suppliers because of the quality of these services.
Speed
Customers also expect faster delivery. Two-fifths of purchasers stated that at least 25% of their orders need to be fulfilled that day, and 60% typically want to receive all their goods within 48 hours at the latest. Research shows that insurance offered by suppliers is becoming increasingly important, and cross-border trade is also on the rise. About half of European purchasers would switch suppliers due to better insurance services. Regarding foreign purchases, 33% of respondents stated that they procure their products mainly from other European countries. The US and China are the second and third major imports.
Customer retention
Companies that detect changes in industrial distribution can more easily retain customers and enter new markets. This means, first and foremost, building user-friendly sales channels, investing heavily in their supply chains, and recognizing the importance of after-sales services. Whether it is direct purchases or purchases in online marketplaces, the role of traditional intermediaries is declining – the information available online and the transactions that can be made are the main drivers of change.
