Improving Supply Management for Plumbing Distributors

The plumbing industry is facing many challenges; however, it is possible for wholesale plumbing distributors and independent distributors to both navigate market turbulence and realize success. This blog will explore the trends currently impacting plumbing distributors and wholesalers, as well as share ways to improve your business’s inventory and supply management to deliver more value for your customers and contractors – in 2024 and beyond.

2024 State of the Plumbing Distributor Market

After several years of growth, the plumbing industry is poised to slow down notably as labor shortages persist, disruptions in the supply chain for plumbing products continue, demand for residential housing shifts, interest rates fluctuate, and regulatory changes loom.

Here are the trends we expect to see impacting the market in 2024:

Labor Shortages

The shortage of skilled laborers remains a significant roadblock for wholesale plumbing distributors and independent distributors, causing project delays and escalating labor costs. Andres Caballero, president of Uponor North America, a leading plumbing distributor, highlights this issue: “The biggest trend is really around labor, labor utilization, and access to labor. The plumbing industry is going through a generational change and shift, and that is creating a shortage on skilled labor.”¹

Disruptions in the Supply Chain

Geopolitical unrest has disrupted maritime logistics in the Red Sea. The recent collapse of the Francis Scott Key Bridge will also disrupt the supply chain for plumbing products. The Port of Baltimore ranked as the 17th largest in the United States by total tonnage in 2021, serving as a crucial conduit for transporting iron, steel, automobiles, construction machinery, and coal. In 2023, it managed an impressive 52.3 million tons of international cargo valued at approximately $81 billion.² Traffic at the port is now suspended, sparking Abe Eshkenazi, chief executive of the Association for Supply Chain Management, to note that its closure is “one more disruption in an already-stressed system” for the global supply chain.

Residential Market Shifting

Experts predict that the demand for plumbing in commercial multifamily housing will remain strong. In contrast, residential homes will decline due to challenges to the water supply, especially in states such as Arizona.

Interest Rate Challenges

Fluctuating interest rates add another layer of complexity, influencing the borrowing costs of plumbing projects.

Regulatory Changes

Significant technological changes will start in 2024 as the industry moves toward new EPA standards effective Jan. 1, 2025.

Improving Supply Management for Plumbing Distributors

Given the challenges the plumbing supply industry is facing, efficiency in inventory management, supply logistics, and distribution is paramount. Here are best practices to implement to help your business tackle inefficiencies and pave the path to progress:

Expand Beyond Traditional Plumbing Services

Distributors are encouraged to enhance their value proposition by offering added services that streamline ordering and improve customer satisfaction. In a post-pandemic era, these value-added services have become niceties and necessities as consumer expectations carry over into B2B relationship demands. Adding additional services also boosts revenue and provides necessary diversification, lifting reliance on a core cadre of products.

Introduce Sustainable Options

Consumers care more than ever about saving money and the planet.  Adding the following recycling products and services allows suppliers to offer a new line of business and increase profitability.

• Greywater Recycling Systems – These innovative systems capture water from domestic outlets, including sinks, showers, and laundry machines. The treated water is then repurposed for non-potable uses such as garden irrigation or flushing toilets. Greywater recycling significantly reduces the reliance on freshwater supplies for residential and commercial properties, promoting water conservation efforts.
• Rainwater Harvesting – Collecting and storing rainwater from rooftops and other areas for future use is the definition of rainwater harvesting. This sustainable innovation is especially beneficial in areas facing water scarcity by lessening the dependency on municipal water systems. The collected rain can be efficiently used for various purposes, including landscape irrigation and flushing toilets, without taxing freshwater resources.
• Green Plumbing Design – Green plumbing design entails various tactics focused on reducing water waste and improving system efficacy. These tactics involve optimal placement of plumbing fixtures to reduce the distances water must travel, using high-efficiency pumps, and integrating cutting-edge wastewater treatment technologies. By adopting these eco-friendly design strategies, buildings can significantly reduce their ecological impact and become leaders in environmental stewardship.

Highlight Company Value

In a market where no plumbing company holds more than 5% of the market, innovation to remain competitive and top-of-mind is critical.³ Social media posting, email marketing, and encouraging online reviews all help boost brand value and cement loyalty.

Embrace Digital Transformation

Smart appliances have entered every facet of our lives. Touchless faucets, for example, are equipped with movement detectors and touch-free controls, providing effortless and sanitary operation. Self-rising toilets, heated seats, and bidets also meet changing consumers’ demands. Consumers especially want smart devices for water leak detection to prevent unexpected water damage. With real-time alerts, homeowners can act and prevent more costly damage.

Enhance Customer Experience with Omnichannel Solutions

The plumbing supply industry must create a unified shopping experience to satisfy customer expectations. Omnichannel shopping means integrating online stores with physical retail experiences to ensure consistency across all platforms—from browsing and ordering to delivery and support. By giving customers an omnichannel experience, plumbing supply distributors provide convenience, speed, and a personalized touch.

By leveraging technological advancements, companies can meet the fast-paced demands of contractors and customers who crave real-time interactions and intelligent solutions. Eighty percent of B2B customers expect responses and interactions in real-time.⁴

Adapt to New Competitors

A competitive shift in the landscape has also occurred. Established B2B distribution companies are diversifying their offerings, while major B2C e-commerce giants are entering the B2B space, bringing the customer-centric focus that has dominated the B2C market. This intensifies the need for traditional plumbing supply distributors to innovate and adapt or risk losing ground.

Revolutionizing Plumbing Supply Logistics with Parcel Lockers

Smart parcel lockers are revolutionizing the plumbing industry. Here’s a rundown of their impact.

Round-the-Clock Access Increases Productivity

In the plumbing business, any delay can be costly. The availability of standard and oversized electronic lockers around the clock means contractors can access supplies whenever needed, enhancing productivity and ensuring adherence to tight project timelines.

Introducing parcel lockers offers a unique competitive edge, provides additional value to services, and optimizes order fulfillment processes. With a variety of intelligent parcel lockers suitable for indoor and outdoor use, including one-door and three-door oversized models, Parcel Pending by Quadient is elevating the customer experience through its parcel locker solutions and establishing a benchmark for omnichannel customer engagement within the plumbing supply sector.

Fulfilling MORE for Leading Plumbing Distributors

For example, Ferguson, a top distributor, has implemented Parcel Pending by Quadient’s smart locker systems, including Oversized Lockers, for enhanced customer service. Spanning over 1,500 locations nationwide, Ferguson has leveraged this technology to offer contractors a hassle-free, self-service pickup of large items at busy places.

Similarly, Johnstone Supply is integrating smart lockers into its distribution logistics. Garnering over $4.5 billion in annual sales through its 465 franchised branches across North America, Johnstone Supply provides its customers with Parcel Pending’s versatile indoor and outdoor parcel lockers, facilitating swift product pickups and more time on-site for contractors.

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The plumbing industry is rapidly changing, necessitating a need to offer more eco-friendly options, digital solutions, and value-added services such as smart parcel lockers.

Ready to deliver more for your contractors and customers? Speak to one of our parcel management experts today.

Sources:

1. Krawcke, Nicole. Experts remain confident for 2024 plumbing industry forecast. www.pmmag.com. December 7, 2023. https://www.pmmag.com/articles/105234-experts-remain-confident-for-2024-plumbing-industry-forecast
2. Lerman, R., Dormido, H., Whalen, J., Melgar, L., & Karklis, L. See how the Key Bridge collapse will disrupt the supply of cars, coal, and tofu. www.washingtonpost.com. March 27, 2024. https://www.washingtonpost.com/business/2024/03/27/baltimore-port-economy-disruption-bridge-collapse/
3. ServiceTitan. Top 12 Plumbing Industry Trends for 2024. www.servicetitan.com. December 5, 2023. https://www.servicetitan.com/blog/plumbing-industry-trends
4. Bromfield, P., Gujral, A., Korsch, M., & Rogalski, A. Industrial Distribution: Opportunities for Differentiation and Growth. www.lek.com. July 12, 2023. https://www.lek.com/insights/ind/us/ei/industrial-distribution-opportunities-differentiation-and-growth