Thursday, February 05, 2015

Trend towards online in industrial consumables distribution market

The UK industrial consumable products market is estimated to be worth £1.8 billion in 2014, according to a new report published by AMA Research. This is a mature and highly fragmented market that, has experienced relatively stable conditions in recent years – after the 2009/10 downturn.

The sector has an extremely fragmented customer base with key end-user sectors including manufacturing, engineering, infrastructure, transport, construction, public authorities and utilities.

Product categories included within the report’s definition of general industrial products are: health & safety; fluid & air control; power tools; engineering & metalworking; hand tools; workshop & maintenance; SSASH (storage, security, access, site equipment & handling); fasteners; janitorial and abrasives. The overall market for consumables is much larger than indicated above, as AMA’s report excludes specialists and focuses on distributors offering a wide range of products.

Key external factors impacting the market include the state of the economy and the relative performance of key customer sectors. Also impacting on the market are general levels of maintenance & repair, legislation, costs of fuel, energy and raw materials, as well as currency fluctuations impacting on product costs.

Distribution of industrial consumables is also fragmented, with some distributors operating in all product sectors defined within this report and others focusing on a more limited number of product sectors. There is a continued trend towards ‘one-stop sourcing’, which is particularly applicable to commodity type products, and many distributors are expanding their product offering to provide an overall package. This trend has undoubtedly been helped by the gradual switch to online sourcing which allows company websites to display more products than shown in catalogues.

Product ranges are generally offered both in catalogues and online, with most leading companies also operating a branch network. Some of the larger distributors are continuing to increase their branch numbers and UK coverage, though the underlying trend is moving towards online. Some distributors have moved their focus to the internet and no longer publish catalogues, while a growing number of companies are offering a digital format catalogue.

The market continues to benefit from an increased focus on health & safety, energy efficiency and environmental issues, which have largely been legislation-driven. Value added services are also important in this market, with demand for systems such as Vendor Managed Inventory (VMI) increasing, which tends to benefit the industrial distributors in particular.

Future market performance is closely linked to the overall state of the economy and general conditions in sectors such as manufacturing, engineering, transportation, utilities, public sector and construction. Overall, future prospects appear more optimistic than in recent years, reflecting growing confidence in the recovery of the UK economy and that it will be sustained in the medium term, though growth rates are expected to vary, reflecting the performance of key end-use sectors. Forecasts are for further steady growth to 2018 leading to an estimated market size of around £2 billion.

“The future performance of individual distributors will primarily depend on their product and customer profile, together with regional strengths, pricing and stockholding strategy” said Andrew Hartley, Director of AMA Research. “Also, value added services provide opportunities for the distributors and those offering services such as VMI are likely to benefit from customers requiring added-value support.”

The ‘General Industrial Products Distribution Market Report – UK 2014-2018 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services within the construction and home improvement markets. The report is available now and can be ordered online at or by calling 01242 235724.

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