While e-commerce gained traction exponentially with home consumers, it took industrial distributors a little longer to catch on. With so many distributors fam- ily-owned and set in their ways after decades and decades of growth, some were
reluctant to start selling their products online. Some feared — and still do — that creating
an online marketplace for themselves would change customers’ perception of the company.
Others got in the game early and have been offering e-commerce for more than a decade.
Given how our survey respondents had previously indicated their e-commerce usage in-
creased in each year this decade so far, some of the results of 2016 came as a surprise. Most
prominently, the amount who said e-commerce is a priority — 60 percent — was 9 percent-
age points lower than a year ago. This comes after a seven-point jump from 2014 to 2015.
This doesn’t appear to be a fluke, as there was a nine-point drop in respondents who said
they are currently generating web-based revenues. Adding to this, the amount who said
they expect their online sales to increase (Figure 1) had a 6.4-point drop from 2015 to
68.3 percent. Another 30. 8 percent of respondents expect this year’s e-commerce sales to
stay the same, up 6. 3 points from a year earlier. Respondents said there was essentially no
change in the percentage of overall sales that are web-generated, with 75.5 percent of them
saying e-commerce was responsible for 1 to 10
percent of revenue.
Whether the drop in e-commerce utilization could
be tied to the troubling industrial economy conditions is yet to be seen. It’s doubtful that more than
a decade of solid e-commerce usage growth would
suddenly go backwards out of the blue.
Asked which business technologies they have in
use, the number who said they use online web
ordering fell four points from last year, also bucking the trend from years past. The technology that
saw the biggest gain was in wireless email/internet
access, which jumped nearly 11 points from a
year ago. Enterprise Resource Planning also had a
9-point gain, while demand forecasting had a 6. 6
point decrease. Other technologies that had only
marginal changes were Customer Relationship
Management (CRM) at 55 percent, Warehouse
Management Systems (WMS), Sales Force Automation and Radio Frequency Identification.
For those that don’t use one or more of those tech-
nologies, respondents chose online web ordering
( 39 percent) and CRM ( 34 percent) as the ones
they are most likely to adopt over the next two
years (Figure 2). This corresponds with CRM and
online web ordering being the technologies re-
spondents chose as having the greatest impact on
their business at 36 and 33 percent, respectively.
If not in use, which will you likely
adopt over the next 2 years?
0 5 10 15 20 25 30 35 40
Online web ordering
SFA- Sales force