What a changing buyer demographic means for distributors

Updated Feb 10, 2022
Young person e-commerce

The distribution industry has undergone a lot of changes lately. Whether it's a global pandemic, resource shortages, or supply chain disruptions, distributors have shown their resilience towards whatever's thrown their way.

But there is still one major change that is looming — a changing buyer (customer) demographic. As the current generation of purchasers heads towards retirement, they will be replaced by buyers with different expectations.

Being proactive in adapting to this shift will be critical for attracting and maintaining customer relationships and ultimately impact long-term profitability. That’s why we’re going to explain the impact this change will have on manufacturers and how to prepare for it.

An Aging Generation of Buyers

The current buying positions are typically held by Baby Boomers, but last year six million more of them retired than the year before. It won’t be long until those positions are all held by a new generation, and the way business is done will need to change along with them. Traditionally sales are done over the phone, in person and were aided by an extensive physical parts catalog. Those methods will have to evolve as younger buyers begin filling those positions.

[RELATED: 13 ways to bolster your hiring processes]

The retirement of Baby Boomers also brings with it a loss of massive amounts of tribal knowledge. Tribal knowledge isn’t easy to transfer and will leave companies scrambling once those employees are gone. It generally consists of technical, process or product information that's only stored in someone’s memory. Being proactive in combating this means there needs to be a process put in place to record the information and younger workers need to be phased in so they gain some of that knowledge as well.

The New Buying Preferences

So as the Baby Boomers retire, their positions will be filled predominantly by Millennials and Gen Z buyers. This younger generation brings with them new expectations and preferences.

For most of their lives, they've had the internet and tend to lean towards digital experiences when making a purchase. In fact, 50 percent of the labor pool is projected to be millennials by the end of this year, and 20 percent will be Gen Z by 2025. And nearly half of Millennials say they prefer no sales rep interaction when making a business-to-business (B2B) purchase, but there are still many manufacturers who don’t have digital capabilities enabled. Or if they do, they offer a subpar experience that doesn’t meet the expectations of these younger buyers.

Distributors will need to take a look in the mirror and determine if they are ready for this new generation buyer. These digital natives have grown accustomed to online purchasing in their personal lives, and they bring those expectations to work with them. Not providing them with an optimized digital sales channel can result in a big missed opportunity and will make it hard to grow as a company.

What this means for the Future of Distribution

Digital transformation is a buzzword that gets thrown around a lot, but it’s crucial to think about what it means for manufacturers.

[RELATED: How e-commerce self-service can benefit manufacturers in these difficult times]

Digital sales continue to grow, and that’s a trend that will only increase as more and more baby boomers age out of the workforce. Investing in e-commerce and other digital solutions now will pay huge dividends down the line. Making the online purchase experience efficient and easy is the best way to not only increase sales but also garner loyalty from these new buyers.

The world is changing, and it’s time for distribution to change with it.

Kris Harrington is the president and COO of GenAlpha Technologies.  During her time with OEMs in the mining industry, Kris and the other founders of GenAlpha saw a need to find a better way for B2B brands in manufacturing to do business.  This led to the development of an eCommerce solution for manufacturers and distributors who want to grow their business online.  For more than 10 years, the experienced team at GenAlpha Technologies has been helping equipment manufacturers repurpose their bills of materials, 2D and 3D engineering data to make it easier for customers to safely identify and purchase parts.

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