It’s well into the back half of the year performance-wise for distribution and manufacturing companies.
And if the mid-year numbers put up by the biggest public distribution companies are an indicator of where the market is going, there are two distinct trends.
Manufacturing and distribution trends in the first half of 2024
The first trend is that most distributors are having only so-so years as they fight economic headwinds, reluctant business spending and what promises to be an even more eventful national election.
The second trend is that a growing number of B2B sellers are doubling down on digital commerce, and they cater even more to growing numbers of anywhere, any time, digitally minded and omnichannel business buyers.
Product makers are putting digital commerce — and transformation — on a faster development track, according to data and analysis in the 2024 Ecommerce in Manufacturing and Distribution Report from Digital Commerce 360. Last year’s total manufacturing sales grew to $6.829 trillion. That’s up 3.6% from $6.591 trillion in 2022, based on Digital Commerce 360 analysis using monthly data from the U.S. Department of Commerce.
4 key takeaways from CEOs
1. MSC Industrial CEO Erik Gershwind
“There are basically two fronts that we’re moving on in terms of our digital experience, our website, in particular,” Gershwind said. “And those two fronts are the platform, meaning the transactional engine that customers go through, and the search or product discovery function. We have improvements lined up on both.”
2. Watsco CEO Albert Nahmad
“Watsco’s long-running strategy of investing in digital commerce technology “continues to have an impact” on financial performance,” Nahmad said. “Greater adoption and use of our platforms by a growing number of contractors has produced growth and market share gain.”
3. W.W. Grainger CEO D.G. Macpherson
“One of the best examples of the value that we create for our customers is by simplifying their purchasing processes,” Macpherson said. “Complicated and prohibitive cost-purchasing processes are common in our space, wasting our customers’ time and money. Fortunately, we are well-equipped to help customers solve this challenge by assisting them in choosing the right digital solution, setting up necessary workflows and approvals, and providing systems training to maximize the benefits.”
4. Fastenal CEO Daniel Florness
“Growth of our e-business reflects both new sales that enhance our growth rate and a shift in existing sales from non-digital to digital processes that improve efficiency,” Florness said.
As companies head into what remains of the third and the fourth quarter, most big public B2B distributors in 2024 are following a common theme of softer sales due to weaker performance in manufacturing productivity, slower overall economic activity—and a much bigger emphasis on ecommerce.
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