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Is E-commerce Market Penetration Reaching a Tipping Point?

Is E-commerce Market Penetration Reaching a Tipping Point?

February 18, 2019

Manufacturing and distribution are reaching a tipping point for e-commerce-driven revenue, where those who are not invested in it will fall critically — and perhaps irreversibly — behind. That’s been the emerging trend in MDM and Real Results Marketing’s annual State of Distributor and Manufacturer e-Commerce survey. 

It’s a divide that Jonathan Bein, managing partner at Real Results Marketing, expects to grow even more in this year’s results. “Digital is becoming more and more important and that’s only going to grow,” he says. “We saw a precipitous shift last year in revenue flowing through e-Commerce.”

Each year, the survey tracks the percentage of revenue going through e-commerce, in categories from less than 5 percent to more than 40 percent. While just a few years ago more than half of respondents had less than 5 percent e-commerce revenue, in the last year that percentage took a significant dive to less than 40 percent. 

Participating in the 2019 survey will allow distributors and manufacturers to see where they fall in the competitive landscape, Bein says. Participants receive a complimentary copy of the results. It’s even important for companies that still fall in the less-than-5 percent category for e-commerce, he adds, because this is the audience that most needs to pick up the pace to match competitors.

To participate in the 2019 survey, active now through the end of the month, click here.

Emphasis on Manufacturers and Personalization

Different in this year’s survey is an emphasis on the manufacturing market. Although historically manufacturers have made up about 20 percent of respondents to the State of Distributor and Manufacturer e-Commerce Survey, the 2019 version includes questions specifically for manufacturers. 

This change is important for distributors to monitor as well, as manufacturers are increasingly going directly to smaller customers with their products. The practice is no longer reserved for the largest clients, says Bein. “Manufacturers are going direct to more and more of the end customer base,” says Bein, adding that the survey results will help to characterize that shift. 

While, since 2011, the survey benchmarks e-commerce revenue and marketing vehicles that drive e-commerce, a new category added for 2019 includes the growing trend of personalization in e-commerce.

As more distributors gain traction with basic e-commerce functions, they are turning to more sophisticated platform features that will go beyond one-size-fits-all to deliver relevant content to all personas. For example, creating website landing pages specifically targeted to someone working in procurement versus design, Bein explains. “As distributors are increasing their e-commerce maturity, that’s the next logical step, doing more with personalization,” he adds.

The growing complexity of e-commerce is all the more reason for companies with less than 5 percent of revenue coming from e-commerce to participate in the survey, says Bein. As their competitors hit 25 percent of revenue and more, it signals that they’ve moved beyond their traditional customer base and are generating demand from a new audience.  

“They are taking marketshare,” says Bein. “When you’ve got a couple of competitors in your space that are at that level of ecommerce revenue while you’re still at less than 5 percent, it’s bad news. It’s going to be hard to bridge that gap.”

Take the 2019 survey, active now through the end of the month, here, to see where your manufacturing or distribution business falls on the e-commerce scale.  

© 2019 Gale Media, Inc.

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