The 2020 Mid-Year Economic Update_long

Commentary: The Next Generation

Ten years ago, there was a flurry of activity as Wall Street blessed several industrial distributors when they went public. As MDM observed back then, distributors who ignored the changes taking place in, over and around the channel risked losing control of the company’s future.


 


The lead article in this issue addresses how to create a seamless transition in management, even in the face of the threats to the traditional business model. Many distributors, including small to mid-sized companies, have put together strategies to ensure growth in the face of increasing consolidation.


 


In a somewhat related thought, the Virtual Tech Fair scheduled for Sept. 12-13 (all-day event both days at http://www.virtualtechfair.com/) is a watershed of sorts in this industry. The industry has witnessed many niche-focused technology providers consolidate as larger companies bought their way into this sector and a few of the ‘legacy’ distribution software companies expanded their reach into broader product categories.


 


The result has produced a current transition as the acquired companies reposition as part of a larger strategy. This is taking place in a strong growth period for distribution software and systems as many distributors buy upgrades postponed during the last downturn. In any industry, these changes tend to create some confusion and competitive opportunities for providers to differentiate and ultimately create more choice and value for customers.


 


Add to the mix the rapid adoption of technology in this industry over the past few years. As the lead article in this issue articulates, there is a new generation of management entering wholesale distribution, with a much different perspective on how to leverage technology than those planning an exit strategy.

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