The 2020 Mid-Year Economic Update_long

2022 Distribution Trends Outlook: Optimism with a Twist of Apprehension

Distributors have taken the pandemic disruption in stride and used it to accelerate improvements across key areas of business: Sales & Marketing, Technology, Operations and Strategy & Leadership.
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As Julius Caesar once said, “Experience is the teacher of all things.” Like a strict substitute, COVID-19 entered our lives and has given us all quite the range of lessons over the last 18 months. Some positive, such as the realization that work-from-home may not be as disruptive as once thought. Many unpleasant, including supply and demand upheaval. But a good thing about even the most negative of experiences is that we do learn and grow from them. 

Distributors have taken the pandemic disruption in stride and used it to accelerate improvements across key areas of business: Sales & Marketing, Technology, Operations and Strategy & Leadership. At MDM, we’re focused on internal growth as well. We’re taking our cue from these essential pillars to centralize our content around them so that you can find exactly what you’re looking for at the moment when you need it. As you’ll see, that starts with the results of our 2022 Trends survey, found in the four articles that make up the September 10 issue of MDM Premium.

Our editors spoke directly with a couple dozen of the more than 100 respondents. Overall, distributors are feeling good about business heading into 2022 — particularly customer demand — but that optimism is dampened somewhat by ongoing supply chain constraints and difficulty recruiting qualified labor. Still, when asked how they expect their markets to perform over the next 12 months, nearly three-quarters (73%) of respondents said they expect moderate growth. Twenty-two percent expect strong growth and just 5% anticipate flat or moderate decline. 

Sales & Marketing  

Expect a hybrid sales approach to continue into 2022 as customers enforce varying policies about in-person sales calls versus virtual meetings. With less T&E and more time to reexamine long-held practices, more distributors are looking at revamping their traditional inside/outside sales model silos. 

Technology

Not surprisingly, e-commerce, at 44%, is the top planned technology investment for the next 12 months, survey respondents report. This is followed by customer relationship management (41%), pricing (29%) and warehouse management (25%). Those with plug-and-play e-commerce platforms are looking at taking the next step into more customized offerings. 

Operations

When asked to share the top two pain points in their business right now, most respondents discussed operational challenges such as transportation costs, product and material shortages and attracting capable people willing to work for a still-profitable wage. 

Strategy & Leadership

Steady and forward-thinking leadership helped many distributors shine this year, despite obstacles. Several respondents reported an internal openness to innovation and improved efficiency efforts not seen before. This positive perspective is likely to put them on strong footing for 2022. 

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