Purchaser Insights Reference Deck June 2015 Methodology Sample Frame Screener Completes 719 Completes B2B Panel 43% Completion Rate UK, France, Germany and Italy Purchasers Screener Criteria 1. Industry Screen 2. Past Participation 3. Age 21-70 4. Supply purchaser Online research was conducted with TNS between May 11May 22, 2015 Trusted B2B panels were used (GMI, ResearchNow and Empanel) 2 5. Involved/influence in purchasing supplies UPS was not identified for this research Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Spend Low France Germany Italy UK Less than (n=45) Less than (n=46) Less than (n=26) Less than (n=73) Medium € 50,000 € 50,000 € 50,000 £ 35,000 € 50,000 € 250,000 (n=90) € 50,000 € 250,000 (n=89) € 50,000 € 250,000 (n=55) £ 35,000 - £ 170,000 (n=69) High More than (n=66) More than (n=65) More than (n=37) More than (n=58) Q6. What is your company’s approximate annual spend for industrial supplies? 3 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights € 250,000 € 250,000 € 250,000 £ 170,000 Researching and Selecting Distributors 4 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. Resources for Researching a New Distributor Base: Total Respondents n=719 Used Preferred Distributor website 51% Trade shows 44% Company sales rep 43% "Word of mouth" or personal references 43% User review and recommendations 44% 33% 39% 37% Distributor print/ hard copy catalogue 34% Reviews from independent trade publications 33% Internet (blogs, social media, forums, etc.) 33% Emails 26% Technical articles or whitepapers from the product's manufacturer 25% Web product videos 46% 22% 35% 29% 32% 30% 21% 25% 21% Q10. Select the top 5 sources you use most frequently to research a new distributor under ”Top 5 used”. Then indicate the sources(s) which you would prefer to use to research a new distributor. Your most preferred may be different from what you currently use. 5 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Factors When Selecting a Distributor Base: Total Respondents n=719 Most Important (1st & 1/2/3) Top Factors Quality of products 61% 49% Best value 46% Best prices Customer service 42% Speed of delivery 39% Wide selection of products 33% 30% 17% 13% 38% 34% 5% 25% 4% 24% 3%19% Technical support is available to answer questions 31% 5% 18% Reputation 30% 6% 16% Relationship with sales rep 20% 3% 13% Company approval (vendors must be approved by my company) 20% 3%12% 18% Returns policy 2%9% Adequate geographical coverage 16% 3% 9% User-friendly website 16% 3% 8% Access to unique items 15% 2%8% Uses my preferred shipping carrier 9% 52% 2%6% Q11. Select the top 5 factor(s) you rely on most frequently when deciding which distributors to purchase from under ”Top 5 factor(s)”. Then indicate the factor(s) which are first, second, and third most important. 6 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Reasons Look for New Products Base: Total Respondents n=719 25% 15% I like to stay on the cutting edge of available products I heard/ read about a new product and thought it may be useful for my business Customer requirements 21% Internal needs 38% Other 1% Q8. What is the MOST common reason you look for new products for your business? 7 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Resources for Researching New Products Base: Total Respondents n=719 Used Preferred Distributor website 56% Trade shows 45% Company sales rep 44% Distributor print/ hard copy catalogue 43% 50% 41% 36% 34% "Word of mouth" or personal references 39% 35% Reviews from independent trade publications 38% 35% Internet (blogs, social media, forums, etc.) 36% User review and recommendations 32% Technical articles or whitepapers from the product's manufacturer 32% Emails Web product videos 27% 23% 29% 32% 29% 24% 22% Q9. Select the top 5 method(s) you use most frequently to research a new product under ”Top 5 used”. Then indicate the method(s) which you would prefer to use to research a new product. Your most preferred may be different from what you currently use. 8 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Reasons Research Via Print/Hard Copy Catalogs Base: Those researching via print/hard copy catalog n=307 48% 49% 53% 35% I like the convenience of catalog(s) 27% 24% 29% 38% 28% My suppliers' catalog(s) clearly show pricing 24% 24% 36% 33% 43% 34% Habit, I am used to researching products this way. 23% 12% 34% Easier to identify/ confirm the products I need 13% 8% 6% Easier to find products than any My suppliers' catalog(s) have the My suppliers' catalog(s) clearly other way most updated product show the delivery date information Total 37% 31-50 C (n=173) 30% 33% The product images and visual detail are more accurate than any other method 6% 3% I don't have easy access to online 51-70 D (n=105) Q37. Why do you research new products via print/hard copy catalogs? 9 C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 26% 20% 20% 21% Easier to get answers to product or order-related questions 2% 1% 4% Other (Please Specify): Current Distributor Used, Reasons, Performance, Challenges 10 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. Distributor Size Used Most Base: Total respondents and by Annual Industrial Supply Spend 27% E 48% 48% EF 64% 54%G 47% 33% FG 8% Total (A) (n=719) Mid-size distributors (typically have regional coverage) G 45% Large distributors (typically have national and/ or international coverage) 18% Low (E) (n=190) 5% 3% Medium (F) (n=303) High (G) (n=226) Smaller distributors (typically a single location or niche services) Q13. From which type of distributor do you MOST prefer to purchase industrial supplies? 11 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Distributor Size Used Most Base: Total respondents and by Age 48% D 59% D 36% 52% Large distributors (typically have national and/ or international coverage) 50% 45% 38% 43% BC 14% 8% 3% 5% Total (A) (n=719) 21-30 (B) (n=74) 31-50 (C) (n=411) Mid-size distributors (typically have regional coverage) Smaller distributors (typically a single location or niche services) 51-70 (D) (n=234) Q13. From which type of distributor do you MOST prefer to purchase industrial supplies? 12 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Reasons for Using Distributor Base: Preferred Distributor Small (H) (n=56) Medium (I) (n=321) 64% IJ 55% Best prices Personal service Level of customer service provided 29% Level of technical support provided 29% Wide selection of products 29% 27% 20% 18% Uses my preferred shipping carrier Shipping mode options 16% 13% 7% 41% 35% HI 51% 41% Payment options Shipping price options 23% HJ 43% 21% Access to unique items 48% 37% 27% 21% 22% J 36% User-friendly website Returns policy 61% 50% J 36% Nearby location 60% J 35% 54% Speed of delivery Large (J) (n=342) 22% 15% 18% 12% 15% 21% I 29% 22% I 20% 23% 13% H 18% Q14. Select the top 5 factor(s) that are most important to you when purchasing industrial supplies from [SHOW RESPONSE SELECTED IN Q13] under ”Top 5 factor(s)”. Then indicate the factor(s) which are first, second, and third most important. 13 H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Most Important Reasons for Using Distributor Base: Preferred Distributor Small (H) (n=56) Best prices Personal service 36% IJ IJ 14% 43% 52% Medium (I) (n=321) 31% J J 5% 19% Large (J) (n=342) 26% 55% 2% 12% 14% 43% J 7% 27% 10% 35% J 6% 21% 7% 15% Level of customer service provided 4%20% 6% 23% 6% 27% Payment options 4%20% Speed of delivery Nearby location 11% 33% 5%18% 3% 13% H 11% 31% Level of technical support provided 5% 16% Access to unique items 5%14% 2% 10% 8% 25% I 5%15% 2% 11% 4% 14% H H 14% 38% User-friendly website Wide selection of products 2% 9% 3%14% H H 13% 31% Shipping price options 0% 9% 2%11% 4% 10% 5% 9% 2% 7% 3%8% Shipping mode options 2% 7% 2%8% 3%10% Returns policy 0% 7% 4%10% 2%14% Uses my preferred shipping carrier 52% Most Important / Net of Most Important/2nd/3rd Q14. Select the top 5 factor(s) that are most important to you when purchasing industrial supplies from [SHOW RESPONSE SELECTED IN Q13] under ”Top 5 factor(s)”. Then indicate the factor(s) which are first, second, and third most important. 14 H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Distributor Performance Base: Total Respondents n=719 Product quality 1% 5% 49% Product availability 1%8% 60% Delivery when products are needed 1%9% Payment options 1% 12% 23% 59% 28% 55% Contract/ negotiated pricing 2% 15% Value-added services, such as repairs, training, or technical support 3% Having a nearby physical location where you can purchase or pick up 5% your order 24% 64% Printed/ hard copy catalog 3% 14% Shipping costs 2% 30% 62% Product price 1% 13% Return policies and procedures 2% 35% 57% The supplier's website overall 1% 12% Having a sales representative 3% 32% 55% Product catalog/ product information on supplier website 1% 12% Ability to make purchases on the supplier's website 4% 46% 28% 59% 16% 16% 25% 52% 29% 50% 31% 18% 57% 24% 21% 57% 20% 19% 59% 19% Not at all well 26% 43% Not very well 26% Somewhat well Q15. How well do your current distributors perform on...? 15 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Very well Distributor Performance Base: Preferred Distributor Small (H) (n=56) Product quality Delivery when products are needed Medium (I) (n=321) 46% 48% 46% I 45% 95% 91% 44% 32% Large (J) (n=342) 50% 94% 60% H 91% The supplier's website overall 21% 70% 91% 18% 66%J Product price 25% 64% 89% 22% 65% Product availability Product catalog/ product information on supplier website Payment options Having a sales representative Contract/ negotiated pricing 38% 25% 36% 32% 25% 50% 61% 46% 48% 55% 61% Shipping costs 16% Return policies and procedures 27% 50% Ability to make purchases on the supplier's website 27% 48% Having a nearby physical location where you 38% I 36% can purchase or pick up your order Printed/ hard copy catalog 29% 43% Value-added services, such as repairs, 16% 55% training, or technical support 88% 29% 84% 88% 63% 92% 25% 62% J 87% 24% 63% H 87% 80% 27% 54% 80% 24% 60% 86% 82% 77% 19% 77% 21% 75% 26% 73% 24% 71% 71% 28% 17% 81% 84% 56% 75% 58% 79% 53% 44% 79% 68% 54% 61% 78% 36% 31% I 23% 33% 35%I 30% 31% 25% 95% 53% 89% 58% 89% 62% 85% 58% 92% 52% 87% 57% 86% 50% 82% 58% 83% 58% 80% 25% 57% 83% 35% I 25% 28% 21% H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 47% 23% Very Well Q15. How well do your current distributors perform on...? 16 82% 47% 47% 44% 82% 69% 59% H 58% 87% H 79% Somewhat Well Challenges with Distributors Base: Preferred Distributor Small (H) (n=56) 27% 27% 20% Shipping speed options 20% 35% J 23% 30% 24% 29% 17% 14% 25% 25% 26% 20% 17% 14% 13% 27% 21% 30% 16% 7% 40% I 28% 20% Lack of nearby location Inadequate returns policy for my needs 32% 16% 17% 23% Inconsistent pricing 16% 28% 25% Insufficient website for my needs Shipping mode options 22%J 29% Lack of post-sales support 40% 43% 30% 29%IJ Does not offer website ordering 47% 51% 38% 34% J Lack of payment options Inconsistent inventory on products I need Lack of knowledgeable support Shipping provider options Large (J) (n=342) 54% Prices too high Poor customer service for resolving issues Unclear returns policy Product offering too limited Shipping price options Medium (I) (n=321) 17% 13% 9% 21% 17% 14% 13% Q12. Select the top 5 most challenging aspects of purchasing from distributors today under ”Top 5 aspect(s)”. Then indicate the aspect(s) which are first, second, and third most important. 17 H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Most Critical Challenges with Distributors Base: Preferred Distributor Small (H) (n=56) Prices too high Poor customer service for resolving issues 29% 13% 32% Product offering too limited 4% 20% Lack of knowledgeable support 4% 20% J J 52% Medium (I) (n=321) 22% Large (J) (n=342) 20% 40% 14% 33% 13% 5% 19% 6% 22% 6% 19% 9% 25% Unclear returns policy 7% 20% 2%14% 1%9% Lack of post-sales support 7% 20% 6% 22% 5% 18% Inconsistent inventory on products I need 7% 18% 8% 21% 4%16% 4% 15% Lack of nearby location 4%16% 3%12% 4%15% 3%10% 4% 10% Inconsistent pricing Insufficient website for my needs 4%13% 2%11% Shipping speed options 5% 11% Inadequate returns policy for my needs 2%9% Shipping provider options 4% 9% Shipping mode options 2% 5% Shipping price options 4% 5% 8% I 10% 28% Does not offer website ordering Lack of payment options 2%14% 39% 30% 6% 14% 21% 6% 18% 3% 10% 1%7% 5% 15% 4% 14% 2% 10% 2%13% 3% 9% 4% 10% 1% 4% 2% 7% 3% 10% 3% 11% Most Important / Net of Most Important/2nd/3rd Q12. Select the top 5 most challenging aspects of purchasing from distributors today under ”Top 5 aspect(s)”. Then indicate the aspect(s) which are first, second, and third most important. 18 H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Anticipated Change in Suppliers Base: Total respondents and by Annual Industrial Supply Spend 20% 11% E 20% E 27% FG 57% 69% 57%G 45% We plan to use fewer suppliers We have no changes planned We plan to use more suppliers E 19% 14% 18% 24% 4% 6% 4% 4% Total (A) (n=719) Low (E) (n=190) Medium (F) (n=303) High (G) (n=226) Don’t know Q22. How do you see the number of suppliers you use changing in the next 3-5 years? 19 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Anticipated Change in Suppliers Base: Total respondents and by Age 20% 57% 18% 18% 54% 57% 24% 56% We plan to use fewer suppliers We have no changes planned We plan to use more suppliers Don’t know 19% 24% 21% 15% 4% 4% 4% 5% Total (A) (n=719) 21-30 (B) (n=74) 31-50 (C) (n=411) 51-70 (D) (n=234) Q22. How do you see the number of suppliers you use changing in the next 3-5 years? 20 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Anticipated Change in Suppliers Base: Total respondents and by Preferred Distributor Size 20% 13% J 57% 64% 14% HI 27% J 66% 46% We plan to use fewer suppliers We have no changes planned We plan to use more suppliers I Don’t know 23% 19% 18% 16% 4% 5% 4% 4% Total (A) (n=719) Small (H) (n=56) Medium (I) (n=321) Large (J) (n=342) Q22. How do you see the number of suppliers you use changing in the next 3-5 years? 21 H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Reason for Fewer Suppliers Base: Anticipate Using Fewer Suppliers n=143 Consolidating my purchasing to get a lower price 59% Easier to do business with fewer suppliers 48% My preferred suppliers are broadening their product catalogs and I don’t need as many suppliers 25% Business is declining Other 15% 1% Q23. Why do you plan to use fewer suppliers in the next 3-5 years? 22 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Purchase Methods 23 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. Methods of Purchase Base: Total Respondents n=719 Used Preferred Directly from the industrial supplier's website 52% 46% Email to a designated account representative 49% 39% Email to customer service 48% 38% Phone or fax to customer service 47% 37% In-person during a sales visit from account representative 44% Phone or fax to a designated account representative 43% In-person at the supplier's physical location 34% 38% 40% From a third-party website (e.g., AmazonSupply or Google Shopping) 27% Electronic data exchange (EDI) 27% 34% 20% 22% Q16. Select the top 5 method(s) you use most frequently to purchase industrial supplies under ”Top 5 used”. Then indicate up to 5 preferred methods under “Top 5 preferred”. Your most preferred may be different from what you currently use. 24 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Methods of Purchase Base: Age Used Preferred Email to customer service In-person at the supplier's physical location Electronic data exchange (EDI) From a third-party website (e.g., AmazonSupply or Google Shopping) Phone or fax to customer service In-person during a sales visit from account representative Directly from the industrial supplier's website Phone or fax to a designated account representative 32% 41% 37% 35% 36% 42% 35% 33% 34% 32%D 54% 49% 47% 46% 46% 53% 46% 38% 40% 43% CD Email to a designated account representative 18% 23% D 16% 28% D 22% D 15% 34% 34% 28%D 19% 41%D 30% D 38% 44% 43%C 30% 36% 32% 32% 45%B B 51% 32% 37% 39% 56%BC 34% 47% B 41% 31% 51%B 59% BC 28% 43%B 47%B 21-30 B (n=74) 31-50 C (n=411) 51-70 D (n=234) Q16. Select the top 5 method(s) you use most frequently to purchase industrial supplies under ”Top 5 used”. Then indicate up to 5 preferred methods under “Top 5 preferred”. Your most preferred may be different from what you currently use. 25 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Methods of Purchase Base: Preferred Distributor Size Used Phone or fax to customer service Email to a designated account representative Directly from the industrial supplier's website Email to customer service In-person during a sales visit from account representative In-person at the supplier's physical location Phone or fax to a designated account representative From a third-party website (e.g., AmazonSupply or Google Shopping) Electronic data exchange (EDI) Preferred 45% 37% 36% 41% 38% 38% 43% 47% 45% 43% 39% 36% 43% 35% 32% 38% 32% 35% 39% 40% 35% 57% 44% 48% 54% 48% 50% 52% 53% 51% 50% 49% 48% 46% 43% 44% 43% 38% 41% 30% 48%H 40% 30% 23% 31%I 25% 24% 29% 20% 17% 23% 18% 18% 26% I Small H (n=56) Medium I (n=321) Large J (n=342) Q16. Select the top 5 method(s) you use most frequently to purchase industrial supplies under ”Top 5 used”. Then indicate up to 5 preferred methods under “Top 5 preferred”. Your most preferred may be different from what you currently use. 26 H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Online Relationship Start Offline Base: Purchase via Distributor Website, Total respondents and Annual Industrial Supply Spend 41% 62% E E 69% 75% Yes No FG 53% 34% Don't know 27% 22% 5% 6% 4% 4% Total (A) (n=373) Low (E) (n=115) Medium (F) (n=148) High (G) (n=110) Q19. Thinking of the industrial suppliers whose websites you currently purchase from, did you have an offline relationship with them before making your first online purchase with them? 27 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Online Relationship Start Offline Base: Purchase via Distributor Website, Total respondents and Age 62% 62% 62% Yes No Don't know 34% 34% 34% 5% 5% 4% Total (A) (n=373) 31-50 (C) (n=211) 51-70 (D) (n=139) Q19. Thinking of the industrial suppliers whose websites you currently purchase from, did you have an offline relationship with them before making your first online purchase with them? 28 C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Online Relationship Start Offline Base: Purchase via Distributor Website, Total respondents and Preferred Distributor Size 59% 62% 66% Yes No Don't know 34% 38% 5% 4% 5% Total (A) (n=373) Medium (I) (n=170) Large (J) (n=174) 29% Q19. Thinking of the industrial suppliers whose websites you currently purchase from, did you have an offline relationship with them before making your first online purchase with them? 29 I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights % Spend Online Base: Purchase via Distributor Website, Total respondents and Annual Industrial Supply Spend 27% 31% 26% 31% 21% 32% 25% E E 38% 25-49 17% E 23% 50-74 28% 24% 14% 14% Medium (F) (n=148) High (G) (n=110) FG 19% Total (A) (n=373) 31% Low (E) (n=115) Q18. Approximately what percent of your annual industrial supplies budget is spent through suppliers' websites? 30 <25 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 75+ % Spend Online Base: Purchase via Distributor Website, Total respondents and Age 27% 31% 31% 29% 24% 31% <25 25-49 21% 26% 19% 19% 19% Total (A) (n=373) 31-50 (C) (n=211) 51-70 (D) (n=139) 23% 75+ Q18. Approximately what percent of your annual industrial supplies budget is spent through suppliers' websites? 31 50-74 C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights % Spend Online Base: Purchase via Distributor Website, Total respondents and Preferred Distributor Size 27% 25% 27% 31% 31% 32% <25 25-49 23% 26% 21% 50-74 75+ 19% 17% 21% Total (A) (n=373) Medium (I) (n=170) Large (J) (n=174) Q18. Approximately what percent of your annual industrial supplies budget is spent through suppliers' websites? 32 I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Likelihood to Move to Web Distributor/Increase Online Purchases Base: Total respondents and Annual Industrial Supply Spend Total (A) (n=719) Likely to move to 20% web distributor Likely to increase online purchases or order using mobile devices 34% Low (E) (n=190) 56% 75% 51% 85% 11% 55% 29% Medium (F) (n=303) 65% 49% Very likely 78% 23% E 34% 59% 51% High (G) (n=226) 82% EG 85% E 22% E 38% 52% 74% E 52% Somewhat likely Q21. If another distributor had a website that you found more user-friendly, how likely would you be to shift more of your spending to that distributor? Q24. In the next 3-5 years, how likely are you to...? 33 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 90% E Likelihood to Move to Web Distributor/Increase Online Purchases Base: Total respondents and Age Total (A) (n=719) Likely to move to 20% web distributor Likely to increase online purchases or order using mobile devices 34% 21-30 (B) (n=74) 56% 75% 51% 85% 31-50 (C) (n=411) 31% 54% 85% 34% 49% 82% D Very likely D 21% D 58% 36% 52% 51-70 (D) (n=234) 79% D 88% D 14% 52% 30% 50% 65% 80% Somewhat likely Q21. If another distributor had a website that you found more user-friendly, how likely would you be to shift more of your spending to that distributor? Q24. In the next 3-5 years, how likely are you to...? 34 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Likelihood to Move to Web Distributor/Increase Online Purchases Base: Total respondents and Preferred Distributor Size Total (A) (n=719) Likely to move to 20% web distributor Likely to increase online purchases or order using mobile devices 34% Small (H) (n=56) 56% 75% 51% 85% 14% 46% 30% 39% Medium (I) (n=321) 61% 13% 70% Very likely 59% 27% 57% HJ Large (J) (n=342) 72% 84% H 27% HI 41% I 54% 81% 47% Somewhat likely Q21. If another distributor had a website that you found more user-friendly, how likely would you be to shift more of your spending to that distributor? Q24. In the next 3-5 years, how likely are you to...? 35 H/I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights HI 88% H Barriers to Online Base: Those who do not purchase online, Total respondents and Annual Industrial Supply Spend 29% 25% 33% 28% 38% 25% 24% 22% 24% 19% Too difficult to get answers My suppliers' sites don't Too difficult to identify / to product or order-related show my negotiated pricing confirm product or product questions details 11% 9% 15% 10% 13% 11% Don’t trust distributor's My suppliers' sites don't site for security reasons show the delivery date 9% 8% 15% Too difficult to place repeat orders Total 8% 23% 25% My suppliers' sites aren't updated regularly with the latest product information 13% 9% 5% My suppliers' sites are too difficult to navigate Medium F (n=77) 4% 18% 16% 5% I don't have access to an online device (PC, mobile, or tablet) at work High G (n=55) 4% 6% 2% No space or power outlet for an online device (PC, mobile, or tablet) at work F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 16% 14% 24% Not all payment options are Don’t trust distributor's site available online for ensuring my orders are processed correctly Q17. Why don’t you purchase industrial supplies online? 36 25% 11% 9% Other 11% Barriers to Online Base: Those who do not purchase online, Total respondents and Age 29% 45% C 21% 28% 37% 24% 24% 40% C Too difficult to get answers My suppliers' sites don't Too difficult to identify / to product or order-related show my negotiated pricing confirm product or product questions details 11% 10% 10% 10% 11% 8% Don’t trust distributor's My suppliers' sites don't site for security reasons show the delivery date 9% 12% 3% Too difficult to place repeat orders Total 19% 15% 8% 21% 23% My suppliers' sites aren't updated regularly with the latest product information 7% 8% 5% My suppliers' sites are too difficult to navigate 31-50 C (n=102) 6% 18% 18% 5% I don't have access to an online device (PC, mobile, or tablet) at work 51-70 D (n=62) 4% 5% 5% No space or power outlet for an online device (PC, mobile, or tablet) at work C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 16% 16% 13% Not all payment options are Don’t trust distributor's site available online for ensuring my orders are processed correctly Q17. Why don’t you purchase industrial supplies online? 37 19% 11% 12% 10% Other Barriers to Online Base: Those who do not purchase online, Total respondents and Preferred Distributor Size 29% 33% 28% 28% 31% 26% 24% 25% 24% 19% Too difficult to get answers My suppliers' sites don't Too difficult to identify / to product or order-related show my negotiated pricing confirm product or product questions details 11% 14% 8% 10% 9% 12% Don’t trust distributor's My suppliers' sites don't site for security reasons show the delivery date Total Medium I (n=88) 9% 7% 14% Too difficult to place repeat orders Large J (n=78) 8% 24% My suppliers' sites aren't updated regularly with the latest product information 7% 10% 18% 17% 5% 8% J 23% 17% 17% Not all payment options are Don’t trust distributor's site available online for ensuring my orders are processed correctly 1% 4% 5% 5% 11% 11% 8% My suppliers' sites are I don't have access to anNo space or power outlet Other (Please Specify): too difficult to navigate online device (PC, for an online device (PC, mobile, or tablet) at mobile, or tablet) at work work Q17. Why don’t you purchase industrial supplies online? 38 16% 14% I/J Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Streamlining Purchase 39 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. Purchase Direct from Manufacturer Base: Total respondents and Annual Industrial Supply Spend 65% 52% E 66% EF 75% We have considered this, but do not currently do it G 37% G 30% 5% Total (A) (n=719) 32% 23% FG 12% Low (E) (n=190) We already do this 3% Medium (F) (n=303) We have not considered doing this 2% High (G) (n=226) Q25. When it comes to buying direct from manufacturers, which of the following best describes your company? 40 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Purchase Direct from Manufacturer Base: Total respondents and Age 65% 57% 65% 66% We already do this We have considered this, but do not currently do it D 30% 41% 31% 26% 5% 3% 4% 7%C Total (A) (n=719) 21-30 (B) (n=74) 31-50 (C) (n=411) 51-70 (D) (n=234) We have not considered doing this Q25. When it comes to buying direct from manufacturers, which of the following best describes your company? 41 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Likelihood to Increase/Start Purchasing Direct from Manufacturer Base: Total respondents and Annual Industrial Supply Spend Total (A) (n=466) Increase DfM purchase 32% Low (E) (n=98) 60% Start DfM purchase 10% 60% 93% 71% 28% 63% 9% 41% 50% Very likely Medium (F) (n=199) 91% 31% 6% High (G) (n=169) 61% 72% E 92% 78% E Somewhat likely Q26. How likely are you to increase purchasing directly from a manufacturer? Q27. How likely are you to start purchasing directly from a manufacturer? 42 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 37% 21% EF 58% 70% E 95% 91% EF Likelihood to Increase/Start Purchasing Direct from Manufacturer Base: Total respondents and Age Total (A) (n=466) Increase DfM purchase 32% Start DfM purchase 10% 60% 31-50 (C) (n=269) 60% 93% 71% 33% 12% Very likely 51-70 (D) (n=155) 59% 65% D 92% 77% D 32% 8% 43% Somewhat likely Q26. How likely are you to increase purchasing directly from a manufacturer? Q27. How likely are you to start purchasing directly from a manufacturer? 43 C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 61% 51% 93% % of Orders Needing Same Day Delivery Base: Total respondents and Annual Industrial Supply Spend 5% 15% 4% 7% 9% EG 20% 13% 20% 4% 12% E E 21% 24% 75+ 50-74 F 60% Total (A) (n=719) 71% 62% 51% Low (E) (n=190) F <25 Medium (F) (n=303) High (G) (n=226) Q30. For what percent of your orders do you need same day delivery for at least part of an order? 44 25-49 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights % of Orders Needing Same Day Delivery Base: Total respondents and Age 5% 15% 3% CD 27% 6% 4% 13% 14% D 20% 22% 14% D 27% 75+ B 60% 58% BC 68% 21-30 (B) (n=74) 31-50 (C) (n=411) 51-70 (D) (n=234) Q30. For what percent of your orders do you need same day delivery for at least part of an order? 45 25-49 <25 43% Total (A) (n=719) 50-74 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Importance of Single Shipping/Distributors Offering Base: Total respondents and Annual Industrial Supply Spend Total (A) (n=719) Importance of 21% Single Shipping Low (E) (n=190) 45% 66% 14% 37% 52% Very important Distributors Offering 15% 74% 11% 11% 69% All offer this Medium (F) (n=303) 21% 51% E High (G) (n=226) 73% E 27% E 43% 69% E Somewhat important 20% FG Some offer this 16% 76% 8% 17% 77% 7% None offer this Q28. How important would it be for a distributor to offer a single shipping company to deliver all your small packages and freight shipments, using a single delivery time and driver for scheduling and billing? Q29. Do any of your current distributors offer a single shipping company to deliver all your small packages and freight shipments, using a single provider for scheduling, transportation and billing? 46 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Importance of Single Shipping/Distributors Offering Base: Total respondents and Age Total (A) (n=719) Importance of 21% Single Shipping 21-30 (B) (n=74) 45% 66% 26% 31-50 (C) (n=411) 50% Very important Distributors Offering 15% 74% 11% 20% D All offer this 73% 76% D 23% D 49% D 51-70 (D) (n=234) 72% D 16% 37% 53% Somewhat important 7% Some offer this 17% D 74% 9% 9% 76% 15% C None offer this Q28. How important would it be for a distributor to offer a single shipping company to deliver all your small packages and freight shipments, using a single delivery time and driver for scheduling and billing? Q29. Do any of your current distributors offer a single shipping company to deliver all your small packages and freight shipments, using a single provider for scheduling, transportation and billing? 47 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Demographics and Firmographics 48 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. Age / Gender Base: Total Respondents n=719 10% 30% 21 to 30 22% Female 31 to 40 41 to 50 27% 22% 10% 0% Age 51 to 60 78% Male 61 to 70 71 years or older Gender Q3. What is your age? Q35. What is your gender? 49 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Industry Base: Total respondents n=719 Aerospace Automotive Commercial Construction Residential Construction Contractor / Service Provider Energy Government / Military Hospital / Healthcare Hospitality Machine Shop OEM (original equipment manufacturer) 3% 7% 7% 6% 10% 4% 2% 10% 2% 4% 4% 25% General Manufacturing / Processing Mining Utilities Other 1% 3% 12% Q32. Which of the following best describes your company? 50 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Revenue Base: UK respondents n=200 Less than £35,000 7% £35,000 up to £68,000 8% 11% £68,001 up to £170,000 £170,001 up to £350,000 4% £350,001 up to £510,000 5% £510,001 up to £680,000 7% £680,001 up to £1.5 million 8% 13% £1,500,001 up to £3.5 million 11% £3,500,001 up to £7 million 9% £7,000,001 up to £14 million 19% More than £14 million Don’t Know 1% Q33. Which of the following includes the total annual revenue of your company? 51 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Revenue Base: France respondents n=201 Less than €50,000 €50,000 up to €100,000 2% 4% €100,001 up to €250,000 6% €250,001 up to €500,000 7% €500,001 up to €750,000 8% €750,001 up to €1 million 7% €1,000,001 up to €2 million 7% €2,000,001 up to €5 million €5,000,001 up to €10 million €10,000,001 up to €20 million More than €20 million 9% 12% 10% 23% Q33. Which of the following includes the total annual revenue of your company? 52 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Revenue Base: Germany respondents n=200 Less than €50,000 €50,000 up to €100,000 6% 4% €100,001 up to €250,000 6% €250,001 up to €500,000 6% €500,001 up to €750,000 3% €750,001 up to €1 million 6% €1,000,001 up to €2 million 6% €2,000,001 up to €5 million 10% €5,000,001 up to €10 million 11% €10,000,001 up to €20 million 10% More than €20 million 29% Q33. Which of the following includes the total annual revenue of your company? 53 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Revenue Base: Italy respondents n=118 Less than €50,000 €50,000 up to €100,000 1% 4% 10% €100,001 up to €250,000 13% €250,001 up to €500,000 €500,001 up to €750,000 €750,001 up to €1 million 2% 6% €1,000,001 up to €2 million 8% €2,000,001 up to €5 million 12% €5,000,001 up to €10 million 13% €10,000,001 up to €20 million 13% More than €20 million 13% Q33. Which of the following includes the total annual revenue of your company? 54 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Job Title Base: Total respondents n=719 Buyer 9% Commodity manager 8% Contract manager 10% Maintenance manager/supervisor 11% Materials manager 4% 24% Owner/principal 10% Procurement manager/director/officer 10% Purchasing manager/director/officer Sourcing manager/director/officer Supply management director/Supply chief Other 1% 4% 8% Q31. Which of the following best matches your job title? 55 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Tenure with Company Base: Total Respondents n=719 4% Less than 1 year 36% 1-5 years 31% 5-10 years 30% More than 10 years Q34. How long have you worked for any company in a role where you have sourcing / purchasing decisions? 56 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Supplies Purchased Base: Total respondents n=719 Adhesives and sealants / Chemicals Automation and instrumentation Cutting tools Electrical supplies Grinding / finishing Hand tools Hoses, reels, cords HVAC supplies Hydraulics Industrial machinery Lighting Lubricants Maintenance, Repair and Operation Supplies Material handling supplies Motors, controls, and drives Pipes and tubing Pneumatics Power tools Preventive Maintenance Pumps Safety / personal equipment Sanitation / Janitorial Sprockets and gears 53% 32% 42% 57% 27% 54% 33% 20% 27% 34% 41% 39% 48% 30% 25% 32% 24% 54% 28% 32% 52% 46% 17% Q4. Which of the following types of industrial supplies / products does your company purchase? Please consider catalog / stock type products, not custom made items. Also, include just those products your company purchases, not rents. 57 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Role for Purchasing Base: Total Respondents n=719 I am the sole decision maker 47% I am one of several decision makers 40% 13% I strongly influence the sourcing / purchasing decisions Q5. Which of the following best describes your role in sourcing / purchasing decisions for these types of industrial supplies? 58 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Spend Base: UK Respondents n=200 29% 36% 35% Less than £ 35,000 per year £ 35,000 to less than £ 170,000 per year £ 170,000 per year or more Q6. What is your company’s approximate annual spend for industrial supplies? 59 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Spend Base: France Respondents n=201 22% 33% 45% Less than € 50,000 per year € 50,000 to less than € 250,000 per year € 250,000 per year or more Q6. What is your company’s approximate annual spend for industrial supplies? 60 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Spend Base: Germany Respondents n=200 23% 33% 44% Less than € 50,000 per year € 50,000 to less than € 250,000 per year € 250,000 per year or more Q6. What is your company’s approximate annual spend for industrial supplies? 61 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Annual Spend Base: Italy Respondents n=118 22% 31% 47% Less than € 50,000 per year € 50,000 to less than € 250,000 per year € 250,000 per year or more Q6. What is your company’s approximate annual spend for industrial supplies? 62 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Appendix 63 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. Factors When Selecting a Distributor Base: Total Respondents n=719 Top Factors Quality of products Most Important 61% 30% 49% Best value 17% 46% Best prices Customer service 5%10% 10% 25% 39% Wide selection of products 10%10% 38% 13% 13% 8% 34% 42% Speed of delivery 13% 9% 52% 4%8% 12% 24% 33% 3%6% 10% 19% Technical support is available to answer questions 31% 5%5% 8% 18% Reputation 30% 6%6%5% 16% Relationship with sales rep 20% 3% 4% 6% 13% Company approval (vendors must be approved by my company) 20% 3% 5% 4% 12% 18% Returns policy 2% 3% 3% 9% Adequate geographical coverage 16% 3%3% 3%9% User-friendly website 16% 3% 2% 3% 8% Access to unique items 15% 4% 2% 3%8% 2% 6% 2% 2% Uses my preferred shipping carrier 9% Most Important 2nd Most Important Q11. Select the top 5 factor(s) you rely on most frequently when deciding which distributors to purchase from under ”Top 5 factor(s)”. Then indicate the factor(s) which are first, second, and third most important. 64 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 3rd Most Important Most Important Reasons for Using Distributor Base: Preferred Distributor Small (n=56) Best prices 36% 9%7% 52% Personal service 14% 16% 13% 43% Speed of delivery 14% 18% 11% 43% Nearby location 7% 4%16% 27% Access to unique items 5% 4% 5% 14% Level of technical support provided 5% 4% 7% 16% Uses my preferred shipping carrier 5% 2% 2% 9% Level of customer service provided 4% 11% 5% 20% Payment options 4%9%7% 20% User-friendly website 2% 5% 4% 11% Shipping mode options 2% 4% 2% 7% Wide selection of products 2% 2% 5% 9% Shipping price options 0% 5% 4% 9% Returns policy 0% 2% 5% 7% Medium (n=321) 31% 14% 9% Large (n=342) 26% 55% 15% 11% 52% 2% 6%4% 12% 5%8% 6% 19% 10% 14% 11% 35% 11% 12% 10% 33% 6% 9% 7% 21% 7%3% 5% 15% 5% 3% 6% 15% 2% 3% 4% 10% 11% 8% 12% 8% 8% 8% 25% 31% 3% 3% 3% 8% 2% 2% 4% 7% 6% 11% 10% 27% 6% 9% 8% 23% 5%6% 8% 18% 3% 5%5% 13% 3% 3%7% 14% 4%6%4% 14% 2% 3% 3% 8% 3% 3% 4% 10% 14% 13% 8% 10% 31% 14% 10% 38% 2% 5% 3% 11% 4% 3% 4% 10% 4% 2% 4% 10% 2% 4%7% 14% Most Important 2nd Most Important 3rd Most Important Q14. Select the top 5 factor(s) that are most important to you when purchasing industrial supplies from [SHOW RESPONSE SELECTED IN Q13] under ”Top 5 factor(s)”. Then indicate the factor(s) which are first, second, and third most important. 65 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Most Critical Challenges with Distributors Base: Preferred Distributor Small (n=56) Prices too high 29% 13%11% 52% 2%18% Poor customer service for resolving issues 13% 5% 7% 20% Lack of post-sales support 7% 5% 5% 18% Inconsistent inventory on products I need 7% Unclear returns policy 7% 4%9% 20% Shipping speed options 5% 2% 4% 11% Product offering too limited 4% 11% 5% 20% Lack of knowledgeable support 4% 11% 5% 20% Lack of nearby location 4%9%4% 16% Does not offer website ordering 4%9%4% 16% Inconsistent pricing 4% 4% 5% 13% Shipping provider options 4% 4% 2% 9% Shipping price options 4% 2% 5% Lack of payment options2% 7% 5% 14% Insufficient website for my needs2% 5% 4% 11% Inadequate returns policy for my needs2% 2% 5% 9% Shipping mode options2% 2% 2% 5% 32% Medium (n=321) 22% 10% 9% 14% 10% 9% Large (n=342) 40% 20% 33% 10% 12% 6% 28% 8% 6%7% 21% 1% 4% 4% 9% 2% 6%6% 14% 5%5%6% 15% 4%6%4% 14% 5%8% 7% 19% 6% 9% 6% 22% 6%6%7% 19% 9% 9% 7% 25% 3% 5% 3% 12% 4% 5%6% 15% 4%6%5% 15% 6%4% 5% 14% 6%5%6% 17% 8% 8%5% 21% 3% 2% 4% 9% 4% 3% 3% 10% 3% 2% 4% 10% 3% 4% 4% 11% 3% 4% 3% 10% 4% 2% 4% 10% 1% 2% 4% 7% 3% 3% 5% 10% 2% 3% 4% 10% 2% 6%6% 13% 1% 1% 2% 4% 39% 5%6%7% 18% 6% 9% 7% 22% Most Important 2% 3% 3% 7% 2nd Most Important Q12. Select the top 5 most challenging aspects of purchasing from distributors today under ”Top 5 aspect(s)”. Then indicate the aspect(s) which are first, second, and third most important. 66 10% 9% 13% 10% 7% 30% Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 3rd Most Important Resources for Researching a New Distributor Base: Annual Industrial Supply Spend Used Distributor website "Word of mouth" or personal references Distributor print/ hard copy catalogue User review and recommendations Internet (blogs, social media, forums, etc.) Company sales rep Trade shows Reviews from independent trade publications Web product videos Emails Technical articles or whitepapers from the product's manufacturer Preferred 56% 47% 54% 47% 43% 39% 38% 33% 32% 35% 37% 38% 35% 34% 29% 33% 43%E 52%EF 28% 50% E 51% E 25% 35% E 37% E 22% 24% 19% 20% E 31% 26% 18% 28% E 28%E F 51% F 41% 48% 38% 39% 38% 32% 27% 29% 33% 37% 33% 35% 29% 27% 26% 34% E 38% 32% 47% E 49%E 29% 33% 34% 18% 22% 21% 18% 26%EG 17% 22% 25% 28% Q10. Select the top 5 sources you use most frequently to research a new distributor under ”Top 5 used”. Then indicate the sources (s) which you would prefer to use to research a new distributor. Your most preferred may be different from what you currently use. 67 E/F/G Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Low E (n=190) Medium F (n=303) High G (n=226) Factors When Selecting a Distributor Base: by Age Top Factors Quality of products Wide selection of products Best prices Customer service Speed of delivery Best value Reputation Access to unique items Technical support is available to answer questions Returns policy Company approval (vendors must be approved by my company) Relationship with sales rep User-friendly website Uses my preferred shipping carrier Adequate geographical coverage 46% 58% BC 72% 38% 32% 34% 36% 42% BC 56% 36% 40% 47% 34% 39% 41% 34% B 49% B 54% 31% 31% 27% 27% CD 17% D 9% 26% 30% 34% 23% 20% 14% 20% 20% 19% 19% 20% 21% 19% 15% 16% 18% CD 10%D 5% 16% 17% 13% Most Important (1st & 1/2/3) 23% 28% 11% CD 23% 2%20% 3% 16% 26% 8% 31% 11% 18%BC 7% 23% 5% 24% 4% 26% 7% D 23% 5% D 25% 1% 23% 7% 22% 17% B B 20% 5% 23% 7% 16%D 3%14% 7% CD 16% CD 1% 8% 2% 6% 8% 18% 5% 18% 3%18% 1% 12% D D 3% 12% D 0% 3% 4% 14% 3%13% 2% 9% 1% 11% 4% 13% 2% 14% 5% D 11% 3% 7% 1% 7% 3% 14% CD 2% 6% D 2% 3% 3%15% D 3% 9% 3% 6% Q11. Select the top 5 factor(s) you rely on most frequently when deciding which distributors to purchase from under ”Top 5 factor(s)”. Then indicate the factor(s) which are first, second, and third most important. 68 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 38% 36% B 48% 63% BC 43% BC 38% B 42% B 21-30 B (n=74) 31-50 C (n=411) 51-70 D (n=234) Reasons Look for New Products Base: by Age 23% D 30% 18% 14% 20% 15% C 30% C 25% 43% 37% 1% 21-30 (B) (n=74) I heard/ read about a new product and thought it may be useful for my business Customer requirements 18% B 26% I like to stay on the cutting edge of available products 0% 31-50 (C) (n=411) 1% 51-70 (D) (n=234) Internal needs Other Q8. What is the MOST common reason you look for new products for your business? 69 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Resources for Researching New Products Base: by Age Used Distributor website Internet (blogs, social media, forums, etc.) "Word of mouth" or personal references Trade shows Distributor print/ hard copy catalogue Reviews from independent trade publications Company sales rep Emails Technical articles or whitepapers from the product's manufacturer User review and recommendations Web product videos Preferred 43% 43% 49% 53% D 35% 33% D 55% 62%B 43% D 38% 31% 41% 39% 39% 41% 49% D 40% 39% 42% 45% 36% 39% 36% 36% 43% 50% 32% 27% 25% 31% 31% 34% 28% 31% 36% 24% 25% 20% 21% 26% 36% 38%B 32% 44% 38% 22% 35% BB 38% 38% 33% 36% 32% 36% 35% 32% 24% 21% 34% 27% 32% 28% 30% 38%C 24% 23% 19% Q9. Select the top 5 method(s) you use most frequently to research a new product under ”Top 5 used”. Then indicate the method(s) which you would prefer to use to research a new product. Your most preferred may be different from what you currently use. 70 B/C/D Statistically significant at a 95% level of confidence Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights 21-30 B (n=74) 31-50 C (n=411) 51-70 D (n=234) Where Goods Are Sourced Base: Total Respondents n=719 70.4 Domestically (within my country) 25.7 Europe (outside of my country) 15.5 China 11.5 U.S ASEAN Nations 6.3 Japan 5.5 Africa 4.3 Canada 4.1 Middle East 3.8 Central America 3.6 Hong Kong 3.6 South Korea 3.0 South America 2.2 Taiwan 2.2 Mexico 1.4 Q38. From where do you source the industrial goods you purchase? 71 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Where Goods Are Sourced Why Source Within Geography Base: Total Respondents n=719 Base: Total Respondents n=719 70.4 Domestically (within my country) 25.7 Europe (outside of my country) 15.5 China U.S 25% 29% 28% 33% 32% 24% 44% 26% 17% 12% 21% 16% 22% *all other base sizes are too small (<30) 11.5 ASEAN Nations 6.3 Japan 5.5 Africa 4.3 Canada 4.1 Middle East 3.8 Central America 3.6 Hong Kong 3.6 South Korea 3.0 South America 2.2 Taiwan 2.2 Mexico 1.4 Cost Product safety standards Other Proximity / Speed of Delivery Ease of doing business Q38. From where do you source the industrial goods you purchase? Q39. Rate why you predominantly source goods 72 24% Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights Quality / Reliability of Product Fewer communication barriers Expect Onsite Post Sales Services to be Provided Base: Total Respondents n=719 22% Yes No 78% Q48. Do you expect your distributor to provide onsite post sales service (repairs, tech support, etc.)? 73 Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of Customer, unless expressly authorized by UPS. © 2013 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS Marketing Research – Purchaser Insights