As 2019 comes to a close, we’re looking back at the drivers and trends that shaped the year. For wholesale distributors, demands for digital capabilities, eCommerce, and improved efficiencies via automation, artificial intelligence, and machine learning have placed unprecedented pressures on the wholesale business model. Looking forward to 2020, wholesalers will continue to feel these pressures as even more strategic and technological innovations have created new opportunities for growth, collaboration, and transformation. Be on the lookout for Clarkston’s 2020 Wholesale Distribution Trends report to learn more about the new opportunities and challenges facing the industry.
With 2019 fast approaching, leaders in the wholesale distribution industry are looking forward to a new year with opportunities for growth and evolution as the industry embraces new modalities for age-old business processes and strategies. Businesses engaging with the 2019 wholesale distribution industry trends will:
- further explore the role eCommerce plays into their business as a strategic lever for improving sales and customer service,
- assess the market landscape to quickly enable new capabilities through targeted acquisitions or divest misaligned areas of the business,
- capitalize on the influx of data to better serve their constituents and customers, and
- evaluate new methods for recruiting, sourcing, and training to best enable their workers with the latest in robotics, artificial intelligence, and automation.
In 2019, leading wholesale distribution companies will invest further and deeper in the myriad capabilities that a robust eCommerce strategy and platform can provide. Implementation of integrated eCommerce platforms enables wholesale distributors to address challenges such as customer segmentation and pricing to improve customer service and reduce overhead costs. eCommerce capabilities continue to mature across the wholesale distribution landscape, and for good reason.
Many of the challenges wholesalers have overcome in their ERP system can now be extended to digital platforms. The ability for real-time pricing incorporating quantity tier pricing, discounts, associations, and promotional pricing can be seamlessly incorporated into an integrated eCommerce platform thus encouraging customers to now trust and rely on this method of ordering. The eCommerce sales capability is further enabled with order history, order status, purchase order, and invoice visibility. Elevating some of the functions once filled by sales rep while increasing customer satisfaction, capabilities like this allow for a greater focus to the customer and customer sales.
The integrated platform also further enables customer segmentation by integrating with CRM systems in distinguishing the specific characteristics and buying trends of the individual contact conducting the transaction. This enables marketing to segment those characteristics for direct promotions and coordination with sales reps to improve focused customer service based upon those characteristics and trends.
2. Merger, Acquisition, & Divestiture
Mergers, acquisitions, and divestitures are still occurring at a rapid pace within the wholesale distribution industry – 2019 will reflect this continuing trend. The dynamics and competition created in this ever-changing environment has created a challenge for wholesalers to maintain market share and share of wallet. The consequence is a continued push for innovation in product offering, speed-to-market, operational efficiencies, and other customer delighters to maintain or grow relevance in the market. The need to attain these capabilities, however, can be costly if grown organically – making acquisitions in the industry quite appealing as businesses looking to improve operational efficiencies or increase complementary product offerings.
Conversely, strategic divestiture helps position a company to focus on core line of business activities to become a premier supplier or provide an opportunity to increase fund availability. No matter the reason for the merger, acquisition, or divestiture, the ability to enable processes, systems and platforms to support the transformation is a necessity for success in 2019.
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