The plumbers’ merchant market is forecast to decline by 18% in 2020, according to the latest market insight from AMA Research.
AMA Research says that the COVID-19 pandemic has led to a significant fall in activity in the construction market and in the wider economy.
There has also been significant growth in online retailing, driven by competition from alternative suppliers and increased adoption of smartphones and tablets, leading to a shift in customers’ buying behaviour. Merchants have responded by increasingly offering transactional websites, with all of the national merchants and larger regional merchants now offering services such as 'click & collect'. The shift to e-commerce and multi-channel offerings has helped ‘traditional’ merchants defend their market share against competition from internet-only distributors.
The internet is also increasingly being used for price comparison, with installers seeking the best deal possible. This is putting pressure on prices as well as creating a demand for greater price transparency, which is being reflected by some merchants with greater use of fixed pricing.
Michelle Turner, Editor at AMA Research, said: “New faces are coming onto the scene, big players are making big decisions and the underdog is one to keep an eye on as smaller merchants claw back some market share in 2019. It is an interesting time for the plumbers' merchant market and as the construction industry itself learns from COVID-19 and adapts to the new normal in its wake so too will the players within this evolving market. It is certainly one to watch as some major players lead the way into 2020.”
AMA predicts the next few years are likely to see further growth of click & collect and click & deliver services and significant further investment in online and mobile transactional websites to enable merchants to remain competitive. Plumbers’ merchants that are able to offer multi and omni-channel services will prosper at the expense of those unwilling or unable to embrace the significant changes facing the market.
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