Digital's share-of-wallet moment

When growth stalls, digital becomes a share-of-wallet strategy.

Demand is flat to down almost everywhere, while digital is the line still growing reliably. In a soft market, that makes a portal less of a convenience play and more of a share-of-wallet instrument.

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Edition index / a 15-second scan

The 15-Second Scan

The numbers and market moves worth carrying into your
next commerce conversation.

80%

of B2B technology buyers now use AI agents in the buying process

27%

of distributors rank pricing as their number one AI priority

37%

of Watsco's trailing-twelve-month sales now run through ecommerce

61.6%

of Fastenal's Q2 sales ran through its digital footprint

1.24M

annualized July housing starts, down 13.5% year over year

-8.8%

Builders FirstSource Q2 net sales, even as digital investment continues

01

AI

The Big Picture

AI

Buyers start with AI, then go looking for a human

IDC's tech buyer research puts AI agents inside the buying process for roughly 80% of B2B technology buyers, with about 71% preferring digital channels even on complex purchases. But Forrester's study of nearly 18,000 business buyers found the other half of the pattern: answer engines are fast and often incomplete, so buyers verify what they find with peers, experts, and the supplier before committing. Forrester counts a typical decision as 13 internal stakeholders plus nine outside influencers, with procurement acting as a decision-maker in 53% of cycles.

80%

of B2B technology buyers now use AI agents in the buying process

Two practical consequences: your product data has to be clean enough for a machine to read, and your portal has to be good enough to survive the human check that follows — because procurement is in the room from the beginning, not at the end.

Source:IDCForrester

Distribution

Distributors are pointing AI at margin, not chat

The NAW and MDM research team surveyed more than 400 distribution leaders for its study of AI priorities and progress, and found that close to nine in ten are actively pursuing AI initiatives. What they're pursuing is more interesting than that headline: pricing came out as the single largest priority category, ranked first by 27% of respondents, ahead of the customer-facing use cases that get the coverage.

27%

of distributors rank pricing as their number one AI priority

It's a rational bet — in distribution, a point of price realization drops almost entirely to operating profit. It also raises the harder question for anyone running a portal: if pricing intelligence is improving upstream, can the buyer-facing channel show that price in real time, or does it still quote from a static matrix?

Source:NAWModern Distribution Management

02

Channel Moves

How distributors are repositioning

Penetration

Watsco crosses a third of revenue online

The HVAC distributor reported ecommerce sales of $2.7 billion for the twelve months ended June 30 — 37% of total sales — with growth of 13% in the first half, well ahead of overall revenue. The number worth studying is the spread: Watsco says its strongest regions run above 70% ecommerce penetration. Separately, its quoting platform for contractors carried $1 billion in gross merchandise value in the first six months, up 14%, across roughly 342,000 households.

37%

of Watsco's trailing-twelve-month sales now run through ecommerce

A 33-point gap between average and best regions is the useful finding. Penetration isn't set by the platform — every branch has the same one. It's set by how hard the local team pushes adoption, which means the ceiling is a change-management number, not a technology one.

Source:Watsco

The Metric

Fastenal's digital share dips for a good reason

Fastenal's digital footprint — vending, bin stock and e-business combined — reached 61.6% of sales in the second quarter, up 60 basis points, with digital daily sales growing 16.2% against total daily growth of 14.7%. Management nonetheless trimmed the full-year target to 63–64%, from 66%, and explained why: the non-digital business is growing too, as the company wins larger customer sites. Sites spending over $50,000 a month rose 16.5%, with revenue from that group up more than 26%.

61.6%

of Fastenal's Q2 sales ran through its digital footprint

Worth remembering before your own board meeting: digital-share-of-revenue is a ratio, and ratios fall when the denominator wins. Track absolute digital growth alongside the percentage, or you'll end up penalizing a good quarter.

Source:FastenalDistribution Strategy Group

03

Sector Spotlight

Building Materials

Demand

Starts fall again, but the permit pipeline holds

Census Bureau and HUD data released on August 18 put July housing starts at a seasonally adjusted annual rate of 1.239 million — down 12.4% from June and 13.5% from a year earlier, with single-family off 9.9%. Permits moved the other way, rising 5.0% to 1.443 million, about 3.1% above last July.

1.24M

annualized July housing starts, down 13.5% year over year

For dealers and building products distributors, that divergence is the planning problem in miniature: near-term volume is falling while the forward pipeline is stable, so the growth available this year has to come out of share, attachment, and service rather than the market.

Source:U.S. Census Bureau · HUD

Down Cycle

Builders FirstSource cuts costs and keeps building the platform

Second-quarter net sales came in at $3.9 billion, down 8.8%, and the company lowered full-year guidance to $14.0–14.8 billion while identifying a further $40 million of savings, bringing announced cost actions to roughly $115 million annualized. Digital investment was not among the cuts. Management is preparing the next generation of its builder platform for release later this year, organized around integrated hubs for community, plan, selections, and construction, with AI embedded to surface project insights. Earlier in the year the company said the platform processed $800 million in quotes in a single quarter.

-8.8%

Q2 net sales, against continued spend on the digital platform

The quote volume is the number to watch, not order value. In this category, the platform earns its keep upstream — at estimating and scheduling — long before it processes a transaction.

Source:Builders FirstSourceDistribution Strategy Group

Consolidation

A roll-up is assembling the sector’s technology test case

QXO posted $3.25 billion in second-quarter sales, up more than 70% year over year, with Kodiak Building Partners contributing $595 million. Its acquisition of TopBuild closed on July 1, after the quarter, making the company by its own account the second-largest publicly traded building products distributor in North America. The stated ambition is $50 billion in annual sales within the decade, and management says a technology upgrade across the acquired businesses is already underway.

$3.25B

QXO Q2 sales, up over 70% year over year on acquisitions

Whatever the outcome, this is the sector’s clearest live experiment in whether a common commerce and data layer can be imposed on a stack of acquired regional distributors fast enough to matter. Competitors will learn from it either way.

Source:QXODigital Commerce 360

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