The 2020 Mid-Year Economic Update_long

Recommended Reading: Manufacturers Look for Distributors with Strong E-Commerce

Distributors lag manufacturers in e-commerce maturity.
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More manufacturers are evaluating the robustness of a distributor's e-commerce channel before working with them because they "understand the path to sales growth includes offering products in multiple channels, with e-commerce at the forefront," according to Dean Mueller and Jonathan Bein of Real Results Marketing in E-Commerce Inches Toward Maturity, which summarizes the sixth annual MDM distribution e-commerce survey.

"Manufacturers don’t have time to nurture distributors without solid e-commerce options and will more aggressively secure and support those that offer a strong e-commerce channel," Mueller and Bein say.

Manufacturers are further along in their e-commerce journey than distributors. In 2015, 57 percent of manufacturers reported e-commerce as comprising less than 10 percent of total revenue; in 2016, only 41 percent were in the under 10 percent category, a drop of 17 percent.

Manufacturers also saw a 15 percent increase in the 10 percent to 30 percent categories and a 3 percent increase in the more than 40 percent category.

Distributors weren't as quick to shift from the nascent to mature stages, with only a 7 percent drop in the nascent stage and a corresponding gain in the 5 percent to 20 percent categories.

Manufacturers are looking for distributors that will help develop markets and drive traffic to online channels. They want partners that will help sell product benefits through the online channel, such as adding short videos about the products to their websites.

"Manufacturers clearly see the benefits of e-commerce and are advancing toward growth and maturity," Mueller and Bein say. "This e-commerce offensive by manufacturers could disrupt distribution. Distributors that are not aggressively embracing e-commerce must get on board quickly or risk manufacturers going around them."

Read more about the latest distributor and manufacturer e-commerce trends in E-Commerce Inches Toward Maturity.

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