B2B Manufacturer-Distributor Disruptors
One key disruptor that's changing the traditional manufacturer-distributor distribution model in the B2B space is that millennials are occupying purchasing roles and don't prioritize the longstanding relationship-based model that previous generations followed. Another key disruptor that's changing the traditional manufacturer-distributor distribution model in the B2B space is manufacturers' growing embrace of ecommerce.
1. the rise of millennials making purchasing decisions
- One factor that's disrupting the traditional manufacturer-distributor model in the B2B space is the influx of millennials who are making purchasing decisions for companies. That fact specifically applies to and is disrupting the manufacturer-distributor model because that model has had a longstanding existence as a relationship-based model.
- As part of that traditional model, buyers/representatives relied on their relationships to meet their business objectives. However, millennials who are now occupying those same roles are making purchasing decisions based on results, not relationships.
- Furthermore, millennials like to get information ahead of time about the results they're looking to achieve largely by conducting their own research.
- To that end, they are focused on solving a specific problem essentially on their own versus asking their go-to person, such as a distributor, for help with such.
- Data illustrates how this factor is disrupting the distribution model.
- Research published by Merit of B2B buyers found that "73% of millennials are involved [with] or influence product and service purchasing decisions."
- Furthermore, nearly one-third of the millennials said "they are the sole decision maker."
- Additionally, research "found that 43% of [millennial] B2B buyers" prefer to work with manufacturers directly instead of with distributors.
- In fact, 20% of millennial B2B buyers said they'd'pay a little more money in order to work directly with manufacturers instead of distributors.
2. Manufacturers' growing embrace of ecommerce
- Another factor that's disrupting the traditional manufacturer-distributor model in the B2B space is manufacturers' growing embrace of ecommerce.
- Ample data shows that manufacturers collectively have been very slow to shift to the ecommerce model.
- However, there is also ample data showing that a large percentage of manufacturers are now shifting over to ecommerce.
- As of December 2017, just 40% of manufacturers even had an ecommerce website for B2B.
- However, 55% of manufacturers said they were working to launch their ecommerce website for B2B in 2018.
- Also, among manufacturing companies that didn't have an ecommerce site for B2B, 69% planned to have one eventually.
- Furthermore, just 43% of manufacturers had a B2B website that's compatible with mobile. Even fewer manufacturers (21%) had an app and just 34% had social media pages.
- This factor is disrupting the traditional manufacturer-distributor model because as manufactures change how they do business (through ecommerce), that will have direct impacts on how they work with distributors. Thus, this factor will continue to change the intricacies of how manufacturer and distributors work together, while still working towards the same business outcomes.
your research team applied the following strategy:
We began our research by listening to a podcast published by Manufacturing Marketing Group. The link only works when directly entered into a browser, so we have included it (as follows) instead of providing a citation to it: (https://webcache.googleusercontent.com/search?q=cache:aTyeaMfX_DQJ:https://www.mmmatters.com/podcast/manufacturer-distributor-disruption+&cd=1&hl=en&ct=clnk&gl=us). However, we did cite to that link in the description of that factor in the first paragraph above, so that our information was cited (despite the issue with the link). The direct link we provided in this research methodology section is the link to all such citations. Beginning around the three-minute mark of the episode, the guest discusses a factor disrupting the the traditional manufacturer-distributor model involving millennials (the first factor we included above). That discussion then continues thereafter. We found the second factor (embrace of ecommerce) by looking for articles about factors affecting the manufacturer-distributor relationship. Most of the articles we looked at for that were published by sources such as Digital Commerce 360. Together, this research process provided us with all the information we sought about key disruptors that are changing the traditional manufacturer-distributor distribution model in the B2B space.