Julien Eichinger - stock.adobe.c
Context: Distribution set for another year of growth
After a decent 2018 things should go well again this year, depending on Brexit, for distribution
The last couple of years have been strong ones for distribution and thanks to digital transformation that should not stop in 2019.
There are of course some challenges, with Brexit key among them, but industry watchers Context are forecasting growth over the next 12 months, even though it will be lower than it has been.
According to the firm's Technology and Channel Predictions 2019 there was growth in 2018 of 6.7% in distribution but it will come in at between 3-6% this year. That is because of reduced demand in EU economies and the impact of Brexit.
Last year the UK delivered growth of 8.7% but forecasting what happens this time around has been made almost impossible because there continue to be so many unknowns around how the UK will leave the EU at the end of March.
Specifically on the last point, Context is advising the channel to make sure it has stocks in place and enough inventory to get through if there is a no-deal Brexit.
“Brexit is making any accurate predictions about UK performance extremely difficult, although all European markets are likely to continue with positive channel growth this year, even if some — like France, Spain and the UK — don’t quite match their strong 2018 numbers,” said Nick Westcott, UK & Ireland country manager at Context.
Further consolidation could also be a feature of the next few months as more distributors look to increase their chances of fending off the competition.
Those are the negatives and on the plus side the chances are that those channel players positioned to deal with demand for help with digital transformation projects will be in a good position.
“However, for those distributors ambitious and agile enough to support their partners’ and customers’ digital transformation requirements, there are gains to be made in cloud, hyper-convergence, cybersecurity and solutions that deliver on the promise of the Fourth Industrial Revolution," said Westcott.
Context is expecting growth to come in areas including, IoT, AI, 3D printing and e-mobility.
