We’ve already looked at Operational Mobility, Traceability and Business Expansion in this Wholesale Distribution Industry Outlook blog series., let’s explore the impact that the retail revolution will have on the wholesale distribution industry.

The new consumer reality, the changing basis of retail competition and the disruption of online shopping is creating a stir among retailers and manufacturers alike. This Retail Revolution will at minimum require today’s leading retailers to change the way they serve their consumers. It could alternatively leave behind the retail leaders that have been so dominant over the last thirty years. No matter where this new world of retail goes, wholesale distributors will be impacted and preparation for this shift must start sooner than later.

With the growth of online shopping, retailers will continue to morph their business to fulfill consumers’ expectations. Same day shipping and free shipping are becoming a norm. Managing retail floors along with online order fulfillment may soon be too much for retailers to handle alone. Those retailers who survive the Retail Revolution will most likely turn to their wholesale distributors for support. Looking at the wholesale distribution business model, it is most certainly not designed to fulfill consumer orders. To adequately support retailers, distributors would need to process exponentially more orders, significantly beefing up capacity. Although this approach would present a significant business model change, distributors may find that this is the only way to maintain volumes, as retailers will most likely start reducing in store SKUs. The focus and capabilities of AmazonSupply also add to the urgency to partner with retailers and expand capabilities. Additionally, preparing in this way for the Retail Revolution will better position distributors to partner with online retailers who also need support with fulfillment, which could be of critical importance if some of the large, traditional retailers do not survive.

LOOKING AHEAD

• What business plans do you have in place if your key retail customers do not make the Retail Revolution transition?
• Have you considered a business plan for approaching your retail customers about fulfilling online orders?
• What process and technology changes would you need to make to help retail customer fulfill online consumer orders?