Recommended Reading: The Persistently Local Nature of Distribution - Modern Distribution Management

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Recommended Reading: The Persistently Local Nature of Distribution

Local markets require unique knowledge and service capabilities to compete effectively.

As Thomas Friedman once wrote, the world is flat. But it’s also true that distribution in many segments remains a local business, no matter who is competing.

The latest issue of MDM Premium, out Feb. 25, features an article on growing competition from European distributors who are more aggressively expanding in North America. The article is part of MDM’s ongoing Shifting Competitive Landscape series.

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Despite the growth of many global distributors such as Rexel, Sonepar and Wurth in the U.S., their approach indicates they recognize the importance of understanding local markets. In fact, Wurth-North America CEO Robert Stolz told me that it’s critical for the industrial supplies and fasteners distributor to think this way. “We believe in local autonomy,” he said.

This is where opportunity lies for distributors who have found they are now competing against recently acquired local competitors backed by more resources. Despite the increased presence of some larger competitors in local markets, the industry will continue to be driven by local needs, support and knowledge.

This doesn’t mean distributors should just sit back and continue to do what they’ve always done. Distributors must determine where they need to invest to keep their place in the market, whether that be in technology, new services or the right people. As Channel Marketing Group’s David Gordon said, “If these companies don’t make those investments and have quality people, that will leave an opportunity for someone else.”

Read more about Global Competition on a Local Level in the latest issue of MDM Premium.

In the latest issue, we also featured an interview with a building materials sector expert on how distributors are responding to shifts in that channel. Read that article:

MDM's 2012 interview with Stolz on Wurth’s expansion in the U.S. provides more details and outlines the Germany-based distributor’s approach.

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