Our survey this week of business confidence in the component distribution market indicates that the supply chain is emerging from the dark days of the 2008/2009 downturn with important lessons learnt.
A survey by Electronics Weekly of 20 managers in the distribution sector recorded an almost universal increase in confidence and new ordering levels as the economy emerges from recession.
Tighter control of inventory in the supply chain is a must, but do not underestimate the importance of the internet in the recovery.
The latest figures from global broadliners RS and Arrow indicate that market conditions are improving significantly.
Sales at Arrow were up in the last three months of the year, while RS Components reported a “sharp improvement” in sales in the month since Christmas. The online and catalogue distributor said sales in January were up 10% compared with the same month last year.
See: Orders and confidence improving for component distributors
The UK market remains weaker than other parts of the world, but nevertheless, growth is growth.
However, perhaps most striking statistic was the 30% growth RS recorded in all web-based sales in January. In the US, online sales grew by a staggering 90%.
For the four largest online distributors – RS, Farnell, Digi-Key and Mouser – internet sales are racing quickly toward the tipping point when online overtakes print/
telephone sales.
As Tony Harris, vice-president of e-commerce and internet marketing for Digi-Key, said recently, “Our industry used to communicate exclusively to customers via a print
catalogue, office visit and phone.
“We are now communicating via the internet through multiple channels – blended content websites, online chats, blogs, forums, wikis, Twitter, LinkedIn, Spoke and myriad social marketing and personalised virtual channels.”
Handled correctly, it appears that the growth in web-based purchasing, supported by community sites, could accelerate the recovery of the distribution sector.
The cost-effectiveness and reach of the internet to access designers will become important to all distributors in the post-recession world.
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