Distributors are learning how to build cultures that drive innovation; don’t wait. The disruptors are at the gate and the battle for distribution supremacy will likely go to the swift and not the strong.
Digital transformation has been a part of distributors’ language for many years. But the speed of transformation has varied: It’s hard, takes significant resources and in some instances, hasn’t been spurred by overwhelming customer demand.
It’s fair to question whether these events are correlated or it’s just a coincidence that Amazon Business is (apparently) thriving in various international markets while Grainger is not.
Amazon is the most obvious example of marketplaces that carry B2B SKUs, but you can find them on Google Shopping, Walmart.com, Alibaba, eBay Business & Industrial, Zoro and other websites, too.
Despite the many columns and webcasts predicting distribution’s post-pandemic “new normal,” it’s going to be a long time before our industry settles back into a rhythm. For now, expect a “new abnormal,” where powerful forces will continue to transform the industry and redefine how you must compete to win.
To many distributors, e-commerce and e-business sound interchangeable. Yet, there are important differences in the definitions.
The distributor is no stranger to coming upon crossroads throughout their business’s life span. For the most part, these forks in the road are clearly marked by the elements that created them – developments in technology, new entrants to the market, or advancements in the products they market, to name just a few.
Amazon continues to build share into traditional distribution channels. Their obsession for the customer experience raises the bar high for suppliers – distributors and manufacturers – whether you sell through them or not.
Shopping happens before the transaction; it includes finding, researching and selecting a product, but not buying or purchasing the product. Make no mistake: It is important to be easy to order from. But a customer’s shopping experience is a distributor’s real opportunity to differentiate.
While most distributors learned long ago to avoid managing for top-line sales revenue as a measure of results, many of today’s distribution businesses still believe that managing by gross margin is effective. In particular, sales compensation is typically rewarded based on gross margin for a particular deal.