A survey of 1,500 industrial buyers by UPS finds a sharp increase in ordering via mobile apps among millennial industrial buyers, who also prefer buying directly from manufacturers over distributors, UPS says in a new study.

When it comes to marketing and selling to millennial industry buyers, many companies—distributors in particular—need to sharpen their techniques, United Parcel Service says in a study it released today.

The study of 1,503 industrial buyers in the United States between the ages of 22 and 70 found several notable and surprising trends among millennial buyers. While they show stronger preferences than prior generations do for placing orders via mobile apps and online marketplaces, they are also more likely than older buyers to prefer placing orders in person at a supplier’s location. Millennials, who accounted for more than one-third of study respondents, are people born between 1981 and 1996. They follow Generation Xers (1965-1980) and baby boomers (1946-1964).

Millennials prefer manufacturers

BrookeYamini-UPS

Brooke Yamini, vice president, global insights, United Parcel Service

And in a harbinger for distributors, millennials differ from Gen Xers and baby boomers by favoring manufacturers for placing orders.

“Millennials show a growing preference for buying directly from manufacturers,” Brooke Yamini, vice president of global insights for UPS, says in the report. “This buying preference comes mostly at the expense of distributors, who continue to lose purchase share to manufacturers and online marketplaces.”

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The report, “Industrial Buying Dynamics,” is the company’s fourth study of buyer behavior, preferences and perceptions in the purchase of industrial products. It’s based on a survey, conducted last December for UPS by Burke Inc., of buyers of industrial parts, products or supplies used in 15 industries.

Distributors’ market share falls

The report notes that millennials make the largest portion of their industrial purchases, or 38%, from manufacturers, followed by distributors, 32%, and online marketplaces, 30%. By comparison, it notes that Gen Xers make the largest amount of their purchases from distributors, at 38%, followed by manufacturers, 35%, and online marketplaces, 27%. Boomers by far make most of their purchases by distributors, at 46%, followed by manufacturers, 29% and online marketplaces, 25%.

But as the report also notes, boomers are retiring at a fast pace and becoming a smaller part of the buying population. The increasing role of millennials, meanwhile, has coincided with a trend toward a drop in overall market share among distributors to 38% this year from 45% two years ago, the study says. In contrast, market shares over the same period increased to 34% from 31% for manufacturers and to 28% from 24% for online marketplaces, the study says.

The study provides insights into how distributors as well as other companies can improve their connections with millennials, including expanding their exposure in social media. While noting that millennials, Gen Xers and boomers all rely on company websites and internet searches as their two top means for finding new suppliers, the study points out that millennials use social media as their preferred third source of suppliers. By contrast, the two older generations rely on sale reps as their preferred third source.

Millennials also show a stronger preference for using mobile apps and other web content to find and order products.

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“A lifetime surrounded by high-tech has bred a familiarity that makes the millennial buyer an expert at using social media channels, mobile apps and internet blogs for wide-ranging research in their buying decisions,” the study says.

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