Quicktake: Tailwinds and Macrotrends for Distributors

Disruptive market conditions breed opportunity. In this episode, IRCG’s Mike Marks and MDM’s Tom Gale look past the horizon at the larger macrotrends shaping growth opportunities for distributors over the next several years: electrification, infrastructure, energy transition, sustainability and demographic shifts.
September economic trends

Disruptions have been aplenty in the wholesale distribution industry over the past few years. The most significant of them, the COVID-19 pandemic, changed the game entirely, with businesses having to adjust to remote work, find new ways to accommodate their customers and deal with the greater shift to digital much sooner than they expected.

It’s easy for business owners to view such disruptions in a negative light, as roadblocks that take extra time and work to navigate. But the distributors that have had the most success since the beginning of the pandemic are those that viewed such challenges as opportunities and were able to pivot and adapt quickly instead of fighting what has become the new norm. In our latest MDM Quicktake podcast, CEO Tom Gale and Indian River Consulting Group founding partner Mike Marks argue that disruptive market conditions breed opportunity. They look at how distributors can take advantage of said opportunity.

Mike Marks

“We’re going to keep having these disruptions,” Marks said. “We’re just getting used to it, actually. It’s kind of like one crisis after another.”

During times of market stress, such as the pandemic or the current state of inflation, distributors should pay attention to the transitions their customers are in.

“With as much transition and chaos that have sort of defined the last couple of years,” Gale said, “I think there’s an opportunity to miss the boat if you don’t start paying attention and being intentional around having additional conversations with customers, or see some specific sectors starting to grow that you hadn’t been serving so much before.”

Tom Gale

Gale used the Colorado craft beer industry, a niche market that has blown up over the past two decades, as an example.

“In Colorado, these craft breweries really became a pretty big market,” Gale said. “There were some distributors that were very creative in being able to pull together the portfolio, the package of MRO supplies and materials, that they’ve figured out how to serve those markets quite well.”

Fluid power distributors were able to take advantage of that niche market. Distributors should always be looking for those kinds of opportunities, even if they seem unconventional, amid disruptions.

“It’s different thinking it’s this disruption is a good thing instead of whining about it,” Marks said.

“There are riches in niches,” Gale added. “I really think by taking a look at where your customers and where some of their growth is right now, and some of the transitions that your customers are in, you can really create this longer-term roadmap and strategy.”

Listen to more of this discussion in the podcast player at the top of this article or by visiting MDM’s podcasts page, where you can also find our full library of previous episodes.

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