Industrial Markets Down - What Should You Do Now?
This week Modern Distribution Management (MDM) presented an interesting webinar on industrial markets. In the webcast Robert W. Baird & Co. presented their latest economic and business survey results for US industrial distributors and MDM recommended how industrial distributors should 'remodel' themselves for these 2016 market conditions. We're sharing it here on our blog because we thought it was very useful and to give our take on the subject.
Here are their main conclusions:
1. Baird's economic conclusion is, "The world is awash in everything - US economic indicators have steadily weakened, particularly in the last few quarters, with growth narrowing to just a few end markets, most notably construction. Despite the lack of breadth in growth, the consumer economy continues to outweigh recessionary conditions in most industrial markets." For Industrial Distribution in general, "Conditions now broadly negative, flat pricing a solid outcome" although for Building Products they say, "Relative strength across most products/markets, despite weather."
2. MDM's 'Distribution Remodel 2016' makes many good recommendations for industrial distributors, organized into three subject categories, Adapt by Refocusing, Cultivate Talent and Invest in Technology.
Please watch the recording for yourselves but here's our take on these 2 conclusions:
1. The Baird market data is very usefully segmented by many industrial sectors. You may not like the data but it's better to be informed than not, so check it out in case it helps focus your effort more on the best performing sectors.
2. We broadly agree with MDM's 'Remodeling' recommendations for distributors which are, by the way, also applicable to most industrial manufacturers. Two of their recommendations particularly caught our attention. To help answer what distributors need to do to succeed now, MDM has analyzed the characteristics (#1 Customers, #2 Adapt, #3 Culture) of leading distribution companies which have most successfully differentiated themselves and created more value.
- #1 was 'Focus on Customers' by industry segment, size, buying behavior and preferences. In our view this means adapting to more and more research and buying online by customers, see our 2016 predictions for US manufacturing.
- #2 was 'Adapt to Leverage Industry Change' rather than being changed by it. We totally agree and fortunately, in the manufacturing sector, there is a unique way to exploit some customers online searching to lock and load your products into their designs and generate leads that convert to sales at rates up to 50%! See the detail in this blog post on how to radically increase manufacturing sales.
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