Online distribution of electrical products ‘worth more than £500m by 2018’

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According to market researcher and consultant AMA Research, in 2014 the market for online distribution of electrical products was estimated to be worth around £400 million, representing 3% of the overall electrical products market. The market has seen consistent growth since 2008 as use of online purchasing and mobile technology has increased, and as suppliers have developed online offerings, the researcher reveals.

AMA suggests that the distribution network within electrical products is complex, reflecting a wide range of products and a variety of end users. The largest distribution channels within online sales are electrical wholesalers and specialist retailers, while merchants and DIY retailers are also significant players in this market.

Electrical products are increasingly being sourced online, both by contractors and end users and as such the outlook for electrical products distributed via this type of channel remains positive, AMA adds. Companies are also widening the product ranges offered through online channels and creating special online ranges and promotions in order to promote this type of distribution and to appeal to a wider audience.

Future growth, while positive, could be limited by the lack of transactional capabilities of some of the larger wholesalers and the slow uptake by electrical contractors who tend to remain loyal to local wholesaler branches and the discounts they offer, the researcher continues. In addition, the traditional buying behaviour patterns of contractors may also delay gains in the Internet sector over the medium term future.

AMA research

The market for online distribution may also remain limited in certain product sectors, such as electrical accessories, where items are low value, commodity products and distributors hold a constant, high stock level, providing less benefit to pre-ordering. In addition, growth may be limited in some sectors by the technical or specialist installation requirements of certain products, leading to the specialist contractors retaining their position and often buying through traditional channels, AMA adds.

AMA Research director Keith Taylor commented: “The internet sector is outperforming other distribution channels in terms of growth and there are increasing opportunities to purchase online as more of the larger suppliers develop their web and mobile sites. However, the rate of growth will depend on the attitudes and opinions of electrical contractors and their propensity to use the new media.”

In the medium term, the internet electrical products market is expected to continue to outperform the overall electrical products market, increasing by 37% between 2014 and 2018 to achieve a market value of £549 million.

The ‘Electrical Products Distribution Market Report – Focus on Internet – UK 2014-2018 Analysis’ report is published by AMA Research, a provider of market research and consultancy services within the construction and home improvement markets. The full report can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

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