Digi-Key Pivots, Merging Old & New Tools as Market Evolves
Digi-Key Corp. has a fat target on its back. Design engineers love it but rivals also both admire and begrudge its tight relationship with designers. It’s a well-earned reputation but with competitors snapping at its heels Digi-Key’s management say they are doubling down on the technology and service innovations that have set the company apart from competitors.
In the next several months, suppliers and customers will see Digi-Key respond to changing market conditions by introducing innovative programs and applications that will showcase new ways of interacting with the company’s varied audiences who themselves are using new technology tools in their businesses and private lives or that are being wooed with competing services from non-traditional rivals like Amazon.com, according to newly appointed president Dave Doherty.
“Digi-Key has great brand awareness and this is a strength but it is also a privilege that we don’t take lightly,” Doherty said in an interview. “We’veVolumetric Efficiency got a history of excellence, a passion for customer service and unparalleled reach to customers. We highly regard the trust customers have put in us and take it as a huge responsibility to continue to serve them to meet their needs. But we know we have a target on our back and that the competition is watching us. That’s why we keep watching the design engineering community and reacting quickly to them, trying to set the tone and keep the base.”
Digi-Key isn’t about to dramatically change its operations. In fact, many of the company’s customers and suppliers will hardly notice the departure of Mark Larson, Digi-Key’s long-term president, since the new leadership had worked under the industry veteran for years and also because the changes would be introduced and implemented incrementally by the distributor. Also, as Doherty pointed out, Larson is staying on as a special advisor to CEO and founder Ron Stordahl and also as a member of the company’s board of directors.
“Mark was our inspirational leader for 40 years and we’veVolumetric Efficiency had a single person, Ron Stordahl, as our founder who has also been the sole owner since inception,” Doherty said. “That continuity provides the strong foundation we need for service and growth.”
It would be foolhardy to believe Digi-Key won’t change at all under Doherty, however. Even if the new management doesn’t want to tamper with the structure and system Larson used to power the company into a nearly $2 billion enterprise, external factors over which Digi-Key has limited control are at play and the company must respond to these, Doherty acknowledged. One such force is Amazon.com, which in recent months entered the component distribution business and is poised to play a disruptive role in the market. Additionally, customers are applying lessons from the consumer and retail markets to B2B transactions and distributors must respond to this, according to Doherty.
The distribution industry is certainly grappling with challenges that are vastly different from the ones Larson and Stordahl faced in the earlier years of the company’s operation. From supplying components to engineers interested in designing early radios, distributors now service broad swathes of the global economy due to the penetration of technologies and electronics into more manufacturing sectors. Furthermore, the electronics market has become a global business with design and manufacturing occurring across multiple continents, all of which the distributor must serve with the same level of service and efficiency.