The 2020 Mid-Year Economic Update_long

Slowness Doesn’t Dampen Optimism

Distributors expanding capabilities to boost growth during "flat" economy.
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The U.S. economy hasn't quite been able to get its footing since the Great Recession. While it keeps moving onward and upward, it seems to keep finding new speedbumps along the way.

The industry was cautiously optimistic coming out of the fourth quarter, but a variety of factors resulted in unmet expectations. As one respondent in the first quarter MDM-Baird Distribution Survey noted: “It’s been surprisingly flat. This was unanticipated, we thought the economic barometers were more promising entering the year.” (The second-quarter results will be released July 25, 2015.)

And distributors that we spoke with for the 2015 Distribution Trends Special Issue, which came out last week, are still optimistic for the second half of the year. And part of that is because of strategic investments they are making in their companies.

In MDM's market trends survey, conducted prior to the release of the special issue, many distributors noted that they were investing in technology – of all different varieties, from pricing to customer relationship management – to position their companies for success in the second half of 2015. And they're focusing on providing better training to get new people up to speed faster.

The willingness to make these types of investments now is a testament to their belief in a quick return on the investment.

"I think the realization is coming around, independent of business cycles and everything, that they need to invest in these kind of tools, and I think that's a good thing," says Michael Sprague, director of e-business development, ThomasNet. "It's a good thing for everybody – consumers, manufacturers, distributors."

Access the 2015 Distribution Trends Special Issue and the 2015 MDM Market Leaders Top Distributor Lists here.

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