The buying behaviour of European contractors remains very traditional

The European construction industry is, in many aspects, a very traditional sector. This also holds true for the buying behaviour of European contractors.

In our latest H2 2023 report of the European contractors monitor (based on interviews with contractors with 5 or more employees) we have focused on their buying and ordering behaviour. This comprehensive analysis reveals intriguing insights into the share of contractors’ spending habits across various channels and countries.

What immediately becomes visible is the traditional route-to-market, which is dominant in the European construction industry. If we look at the share of contractors buying at various channels, it becomes clear that the specialized wholesale is very dominant. More than 90% of all European contractors buy via this channel. The second most used channel is direct supply via manufacturers with 65%. DIY stores and Pure online players like Amazon have a significantly lower share of contractors buying there.

However, it is even more important and interesting to look at the share of wallet.

The specialized wholesale emerges as the undisputed leader, commanding approximately two-thirds of the total share of wallet among European contractors. This dominance underscores the pivotal role these wholesalers play in serving the needs of contractors across the continent

Direct supply from manufacturers follows closely, claiming 27% of the share of wallet, signifying a significant portion of contractors’ expenditures flowing directly from the source.

In contrast, DIY stores and pure online retailers capture only a fraction of the total share of wallet, indicating a preference among contractors for specialized channels.

Country-specific variations add another layer of complexity to the analysis. The Netherlands and Belgium lead in the share of wallet spent via specialized wholesalers, while Germany exhibits the lowest share in this regard. Direct supply from manufacturers, however, sees its highest traction in Germany. English contractors displaying the highest share of wallet for pure online channels, but the adoption of pure online channels remains relatively low in countries like Germany, Italy, and Belgium.

While the overall distribution of spending across channels remains relatively stable, there are notable shifts, particularly in the increasing share of wallet attributed to direct supply by manufacturers. Slight increases are also visible for pure online and DIY stores, but the absolute share of wallet remains very low.

Looking ahead, it’s evident that specialized wholesalers will continue to maintain their dominance in serving European contractors for the upcoming years. It will depend on the market dynamics to what degree we will see a shift occurring more prominently.

For example, a market crises may prompt contractors to explore alternative channels and shop around to save money. But in times of favourable market dynamics, loyalty to traditional channels, notably specialized wholesalers and direct manufacturer supply, remains steadfast.