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This is a part of the 2017 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2017 Distribution Trends Special Issue
Perceived commoditization continues to build, particularly as Amazon and other online players gain market share. Distributors are focusing on improving access to technical information and the ability to compare specifications in the field in order to demonstrate critical product differences and provide additional value.
E-commerce demand expands beyond purchasing. Overall, the hose and hose accessories sector remains slow to adopt e-commerce as a primary channel for purchasing, but demand for technical information and other resources is pushing distributors to increase their online investments. Customers are doing more of their own research online before purchasing, which "can be a threat to traditional distribution," says Katie Powell, vice president, Munro Cos., Grand Junction, CO.
But it also opens opportunities to be more consultative when customers call and to provide more resources on your site. This establishes yourself as a product and application expert, rather than just a product broker.
Sales growth was hard to come by in 2016, but 2017 started stronger, according to the monthly NAHAD Industry Trends Survey, produced by the Association for Hose and Accessories Distribution. In the fourth-quarter 2016 MDM-Baird Distribution Survey, respondents in the hose and accessories sector reported an increase in sales for the first time since the second quarter of 2015. Sales continued on the upward trajectory through the first quarter, posting average growth of 2.7 percent.
Energy markets are starting to stabilize, but expectations are low for significant growth. While oil prices stabilized somewhat in the second half of 2016 and the number of active oil rigs continues to grow, expectations are that activity will not return to the boom levels seen just a few years ago. In addition, offshore drilling continues to face political battles that will keep it from ramping up activity.
Search for new end markets for growth requires additional training. Hose and accessories distributors continue to report challenges finding qualified people. "We would like to find folks with specialized knowledge (knowledge of distribution or of the goods we offer), but in our small town we usually rely on on-the-job training to bring people up to speed," Powell says.
In addition, as traditional markets such as energy remain lackluster, distributors are looking to new markets to build sales. This requires "sales training to target specific types of customer segments," rather than a single general training program, notes one respondent to the 2017 MDM market trends survey. This requires additional investment in building training programs.
CONTACT
6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
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