November/December Editorial: Another Year, Another Mixed Bag

With industrial market challenges tougher than they've been in years, distributors and manufacturers are at a crossroads. It seems there is no better time than now to reinforce your value proposition to your customer base.

This article first appeared in the November/December print issue of Industrial Distribution. To view the full digital edition, click here.

It’s pretty hard to believe we’re already wrapping up another year. It feels like 15 minutes ago that I was complaining about the heat, and now suddenly I’m layering up for a college football game where temps are predicted to be in the 40s.

As we head into winter, the forecasts are mixed: will we see another freezing cold, snow-covered disaster, or will a more moderate season prevail? Likewise, will the economic conditions continue to be a mixed bag, or will relief come in the form of increasing customer spending, reasonable regulations, and a continuation of low interest rates?

The sentiment among industrial business owners seems to be a patchwork: Top U.S. manufacturers are more optimistic about their revenue projections but decidedly less encouraged about the U.S. and global economies, according to a new survey by PwC.

Likewise, The International Monetary Fund recently cut its global growth forecast, citing China’s economic slowdown and its spillover effects on other countries as well as longer-term factors such as weak productivity gains. Additionally, the group cut its U.S. projection to 2.8 percent from 3 percent for next year, in light of deeper long-term headwinds for advanced economies generally, including weak productivity growth, lower investment, and aging populations.

From a macro standpoint, it’s difficult to speculate just how much impact these global factors will have on distributor profitability but one thing is for certain: if your customers are facing challenges, so are you.

With all that said, it seems there is no better time than now to reinforce your value proposition to your customer base. Many of you might say your customers already know the value they attain from your business relationship, and I hope you’re right. But a recent study by UPS suggests that many industrial purchasers are more than willing to move outside of their traditional supply base to make a purchase if the customer experience is better. For many, Millennial buyers especially, this refers to the functionality of your e-commerce.

In a recent survey of the ID audience, two-thirds of our respondents say that their business currently engages in online sales. Of those, nearly 80 percent tell us they plan to upgrade their e-commerce site within the next two years.* From one angle, these statistics look great. But from another – that leaves one-third of our survey respondents who don’t currently engage in e-commerce. Of those, 65 percent say they have no near term plans to implement it – most citing a lack of customer interest.

Whether these customers truly lack interest in online procurement is something that bears investigating. The UPS report suggests that very few Millennial buyers utilize catalogs, and I can’t imagine this shifting in print’s favor as more and more in this generational set enter the workforce.

There are only a certain number of things that are within our control, that’s for certain. As you look at the coming year, take a fresh look at your goals and ask yourself how much you’ll let the external forces impact your business, and in which areas you’ll be ready to fight back.

*For more results and analysis on e-commerce, download our latest report: The State of B2B e-Commerce in Industrial Distribution at