How does your company’s eCommerce offering stack up?

Members of The American Supply Association are optimistic about eCommerce growth in 2024 as highlighted in the new 2024 State of eCommerce Study, conducted in collaboration with Distribution Strategy Group — a Colorado-based firm specializing in strategic guidance for distributors facing market disruption, providing insights, consulting, and analytics to support their clients.

The survey spanned multiple sectors, including industrial, electrical, safety, HVACR, plumbing, building materials, chemical and plastics, oil and gas products, JanSan, hardware, and more. Respondents were an 85-15% split between distributors and manufacturers.

From DSG’s report, the plumbing distribution industry is going through big changes as it adopts more digital tools and platforms. According to the study, plumbing distributors are using online channels to improve their market presence while keeping their traditional strengths, like good customer relationships and deep product knowledge. This shows the industry’s ability to adapt to new customer needs in a competitive market, DSG notes.

Through the end of 2024, 45% of plumbing distributors have taken on eCommerce, with 13.4% of their revenue coming from digital channels. The study states this is a strong sign of commitment to digital transformation.

eCommerce in the distribution industry has grown steadily: in 2022, it made up 9.9% of total revenue; in 2023, it grew to 10.5%; and in 2024, it reached 13.1%. The plumbing sector’s 13.4% digital revenue is ahead of many other industries, but there is still room for improvement, especially as larger distributors make a bigger percentage of their revenue from eCommerce than smaller ones, DSG reports.

This study divides distributors into four stages based on how much of their total revenue comes from ecommerce: Nascent (0–5%), development (5–10%), mature (10–20%) and leader (more than 20%). The study shows, 35% of plumbing distributors were expected to be in the mature stage by the end of 2024, 24% are leaders, and 13% of distributors are getting more than 30% of their revenue from eCommerce. These numbers show more plumbing distributors are using eCommerce to generate a significant part of their revenue, with room for more growth in the future.

The study also shows the plumbing industry has some different trends when it comes to eCommerce use. One major trend in this report is the use of mobile apps. Plumbing distributors rank third for the effectiveness of their mobile apps, compared to other industries. Contractors and customers say they appreciate the convenience of mobile apps, specifically for ordering on the go and handling repairs.

A second trend is a focus on customer experience (CX) — 66% of plumbing distributors say CX is their top priority.

The last trend in the plumbing sector is the focus on increasing transaction sizes. 33% of plumbing distributors prioritize bigger orders, which is much higher than the 9% seen in the broader distribution industry.

These three trends indicate plumbing distributors are balancing digital innovation with the practical needs of their customers, especially contractors who need technical expertise and quick service, DSG reports.

The report also shows there are several factors that influence eCommerce success for plumbing distributors. Plumbing products usually require detailed specifications and compatibility checks, which makes it important to have strong online platforms that can handle complex product information and custom pricing, DSG notes. Plumbing contractors say that when working in high-pressure environments they need quick access to inventory, real-time product availability updates, and the ability to place emergency orders.

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Digital marketing tools, such as email campaigns and mobile app promotions, have been proven effective at driving traffic and sales. However, human interactions remain the essential drive, with field sales representatives and customer service teams still playing an important role in helping customers adopt digital tools.

In terms of operations, the DSG report states plumbing distributors focus on unique goals. One key priority is improving efficiency and inventory visibility. Many distributors are combining digital tools with their counter service operations, so customers can see real-time inventory availability and enjoy smoother order processing and returns. The report adds that plumbing distributors are less focused on integrating ERP (enterprise resource planning) systems than other sectors and, instead, are prioritizing features such as mobile-friendly interfaces and real-time inventory updates.

Financially, 35% of plumbing distributors are focused on acquiring new customers, compared to only 4% in the broader market. This is a shift, since last year’s findings stated most distributors focus on expanding revenue from their existing customers. Additionally, 33% of plumbing distributors are focused on increasing transaction sizes, which is much higher than the industry average.

When it comes to investment satisfaction, 26% of plumbing distributors say they are highly satisfied with their eCommerce investments.

Looking ahead, the DSG study predicts eCommerce rates in the plumbing sector will grow faster than adoption rates. This means distributors will focus more on improving their existing eCommerce platforms rather than only increasing the number of distributors using digital tools.

According to DSG, the next phase of digital transformation in plumbing distribution will depend on the ability to integrate these strengths with advanced digital tools to create seamless, customer-friendly experiences for contractors and end-users alike.

To get a copy of these results, please email Bri Baresel, who contributed to this report, at bbaresel@asa.net.