4 Trends in Distribution Halfway Through 2013 - Modern Distribution Management

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4 Trends in Distribution Halfway Through 2013

Human resources, data and consolidation top the list of key trends driving distribution this year.

We’re halfway through 2013, and while we've tried to move past the uncertainty that plagued 2012, there's still hesitancy in the marketplace, according to many of the distributors we spoke to for the 2013 Distribution Trends Report.

For the annual report, we spoke with dozens of distributors across sectors and surveyed our readers. We appreciate your input.

From these discussions, several key trends emerged – as well as others that were more specific to particular sectors – that are driving distribution in the second half of 2013. Here are four of the most important trends we identified:

1. Human Resource challenges take center stage. As business has started to pick up, many distributors are looking at expanding their work forces again, but they're being more cautious about it than in the past. The challenge is that the industry today requires different skill sets. In addition, potential employees – particularly in the younger generation – have a different set of expectations for their careers, yet still have to work with people who started their careers before this generation was even born. “… We now have four generations at work together, and that’s unusual,” says Julia Klein, CEO of C.H. Briggs Company, Reading, PA.

2. Data becomes more important to business. Data is big in business today. You hear the term "big data" a lot, but most distributors aren't quite ready for big data, says Jonathan Bein of Real Results Marketing. But there are a lot of business benefits hiding in the data distributors already have – and more distributors are recognizing the value of that 'little data.'

3. Distributors targeting new sectors for growth. Distributors are looking for ways to become more important to their customers, and customers are looking to distributors to help them cut costs from their supply chain. The result of this is that more distributors are looking outside of their traditional sectors to provide more to their existing customers. It's more prominent in some areas – electrical and power transmission distributors are seeing significant opportunities to move into each other's space, and many distributors are looking to add or increase their offerings in safety and jan-san – but it's not always easy for distributors to be successful with these moves. 

4.Consolidation continues. Merger and acquisition activity in distribution continues to be strong, with more than 20 deals completed in the first half of 2013. But the impact is wider than just having fewer companies in the field. Consolidation is driving changes in technology adoption, product offerings and customer relationships. (Read more about M&A activity in distribution on MDM’s M&A news page.)

Read more about the above trends and others, including a renewed focus on inventory management and vending, the impact of online competition, and pricing pressures, in the 2013 Distribution Trends Report, available here. Or subscribe today for full access to it and trend reports on 13 sectors in distribution.

View the Top 40 Industrial Distributors and the top distributors in 14 other sectors.

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