As the calendar turned toward the end of 2022’s second quarter — and toward MDM’s SHIFT conference — the topic of transformation appeared regularly during MDM podcast episodes. And while the T-word wasn’t always used to describe what distributors were there to talk about, ideas of evolving leadership roles and changing market realities were often present. Distribution leaders spoke about new customer engagement strategies and plans for promoting sustainable operations. Some distribution veterans discussed personal and companywide transformations, while other experts said the industry should closely follow transformative strategies surrounding pricing and digital initiatives.
This is a recap of the major topics and themes guests covered during MDM podcasts between July and September of this year. Click on the headlines to read more — or listen to each episode in the embedded players included below.
- During MDM’s first podcast of 3Q, Elliot outlined successful customer engagement strategies needed to succeed in an increasingly distracted world. Crafting effective digital and traditional customer experiences is essential — but it is just as important to learn how companies can help theirs team overcome internal challenges to develop a digital-first mindset and culture.“It’s important to elevate that value proposition beyond the features and the functionalities of the products,” she said.
- This was MDM’s first QuickTake podcast of 3Q, and it focused on how distributors can maintain perspective and focus on actions and tangible data amid talk of a broad economic downturn. Indian River Consulting Group founding partner Mike Marks chatted with MDM CEO Tom Gale about why it was important to pay attention to numbers instead of the myriad recession predictions.“I think there’s so much noise going on in the system right now, in terms of what the media is talking about, and all the VUCA (volatility, uncertainty, chaos, ambiguity) stuff we’ve talked about in several prior podcasts,” Marks said. “If you listen to what people are saying, you’re going to think things are a lot worse than they are.”
- Vaughn and MDM executive editor Mike Hockett discussed the plumbing, PVF and waterworks distributor’s strong emissions-reduction goals — and the steps it will take to reach them. “We look at this in terms of three major categories where we think we have the greatest opportunities to lighten our footprint and reduce our emissions, and that’s with our fleet, within our facilities and through renewable energy,” Vaughn said. She also talked about Ferguson’s now-completed primary listing move from the London Stock Exchange to the New York Stock Exchange and what it means for the company.
- In another QuickTake episode, Mike Marks and Tom Gale explored the impact of summertime landmark mergers and acquisitions and discussed how the mission of strategic deals runs counter to that of private equity. (Mergers and acquisitions play a huge role in which companies move up or down MDM’s Top Distributors List year-to-year.) As an alternative to private equity, Marks offered examples of what major distributors Wesco and Motion have done with recent major acquisitions. “They’re actually taking the long-term view, and it’s where they’re truly innovating,” he said.
- Bodla talked about how the role of distribution associations and buying groups has evolved over the past 10 years, particularly since 2020. He also discussed NetSuite’s newly-launched initiative to support those groups with education and networking opportunities.“Small- and medium-sized distributors, in particular, we’re like, ‘It’s not just who can I trust, and who can I have a conversation with?’ It’s also ‘Who can I have a conversation with who is in the exact same boat as I am?’” Bodla told Mike Hockett.
- In a chat with Mike Marks, Abdelnour and Sachs discussed the state of fragmentation within various markets and the factors that separate leading distributors from those that lag behind. The two guests outlined some of the key findings from McKinsey’s “The Coming Shakeout in Industrial Distribution” report and previewed the firm’s 2022 version that was presented at MDM’s SHIFT conference at the end of September. “One of the biggest insights we got is that not all sectors are built equally,” Abdelnour told Marks.
- Shaw and MDM analytics manager Donnie Williamson chatted about the state of data standardization for manufacturers, distributors and end users, and outlined the benefits of standardizing product data industrywide. The two discussed the ETIM-based classification, which combines a uniform structuring data-entry and exchange format with exclusively factual product information, as specified by the producer. Shaw explained that “what makes the model special is that every class feature, value, unit of measure is predetermined by a global standards body made up of industry experts, manufacturers and distributors — people who know what the product is, how it works, how it’s searched for by end users.”
- In a world of distribution giants, many small- to mid-sized companies have successfully transformed their business to match current market demands. Meister, co-CEO of Germany-based power transmission, fluid power and tool technology distributor Ludwig Meister, spoke to Tom Gale about his individual company’s journey. Meister outlined an “inside-out process” for how Ludwig Meister digitized and strengthened the automation capabilities of back-end systems purchasing, inventory management and logistics — before focusing on sales. “That means we started transforming and digitalizing the background of the company on everything that is behind the stage,” he said.
- Ruggles and Mike Hockett discussed digital initiatives — from both Martin Supply and the Industrial Supply Association — as well as progress the greater industrial distribution sector has made on that front. Ruggles said Martin Supply’s online sales have “doubled” since the onset of the COVID-19 pandemic in 2020; he credited the company’s membership with buying group AD and its eContent solution for offering an entry point into eCommerce at a fraction of the cost.“When you’re thinking about digital presence, I think size matters,” Ruggles said.
- On the heels of Grainger taking the top spot on MDM’s Top 2022 Industrial Distributors list, Merriwether and Mike Hockett talked about — among other topics — the MRO distributor’s risk mitigation, pricing strategy and how analytics have shaped its digital offerings. During the podcast, Merriwether emphasized the importance of Grainger’s price changes over longer durations, rather than looking at just one-time price increases or how pricing has changed in short stints. “We want to make sure that online price transparency is very clear, that we present value to our customers and they can actually see the price and the value that we provide,” she said.
- In another QuickTake, Tom Gale and Mike Marks talked about how distributors’ roles can go far beyond reacting to threats and opportunities that many have been preoccupied with since the COVID-19 pandemic started. The consistent market disruption has required constant reaction from distributors who weren’t ahead of the curve when it came to operational agility, supply chain, labor and digital tools, Marks pointed out. He said many may need their own North Star to guide them. “It’s sort of the new version of ‘What do you want to be when you grow up?’” Marks explained. “The North Star says, ‘What are we going to create going forward?’”
Sept. 16: Amazon’s Trade Practices Under Fire
- Mike Marks and Tom Gale chatted a week later for another QuickTake, this time examining a California lawsuit against Amazon, the broader trade practices at play for distributors and the broader issues for how distributors can differentiate with stronger value propositions. The Golden State’s antitrust and unfair competition lawsuit came one day after the National Association of Wholesaler-Distributors launched its own public affairs campaign urging Congressional leaders to “level the playing field.”
Sept. 21: Peter Capuciati, CEO at Bluon
- Mike Hockett spoke with Peter Capuciati, CEO at Bluon, about the company’s formation and transformation from a refrigerant R&D company to providing a new database and app to remove friction between HVAC distributors, technicians and contractors. Bluon has evolved over the past decade, and it began 2022 by securing $37 million in Series B financing — including backing by top HVACR distributors Ferguson and Reece Group through their venture arms. This spring, the company launched BluonLive, which it said is “the most comprehensive parts and equipment cross-reference database in HVAC.”
Sept. 28: John McKenzie, President at Winsupply
- McKenzie joined Mike Hockett to discuss Winsupply’s eye-catching drone delivery program, as well as the strategy behind the company’s frequent acquisitions. The pair also outlined how Winsupply’s employee-ownership opportunity is paying dividends across the organization. “I don’t think that anything that we’ve done over the past couple of years has been really for a bleeding edge or cool factor,” McKenzie told Hockett. “We’ve really centered ourselves from a technology perspective of how can we either help a local company better serve its customer contractor? The drone concept has been ‘How do I give a contractor more time in their day?’”