A well-known proverb says, “To know the road ahead, ask those coming back.” Throughout the past year, industry experts from SAP have identified and written about trends affecting wholesale distributors in today’s changing world.
These trends are shaping the future of the industry and prompting companies to take a serious look at the way they will do business in years to come. Here are a few to watch in 2022.
E-Commerce – an Online Lifeline
The events of the past two years have revealed a critical trend: distributors must have a modern, online customer experience to compete and survive against global marketplaces like Amazon. Many companies have an online presence, but customers want more products and more personalized services – and they want them now. We’re at a tipping point for the industry, and distributors need to evolve, as described in “The Future of Wholesale Distribution: B2B Marketplaces.”
How do companies get started? While a goal may be to stay relevant against competitors, distributors should capitalize on the unique value they add, especially for longtime customers. One idea getting some traction is establishing a marketplace to offer a more extensive list of products. The article “Finding Your Place in the New B2B Marketplace Battle Zone” discusses six vantage points to help analyze readiness for a B2B marketplace.
But there are other initiatives that can help distributors stay in the e-commerce game. Customers are looking for personalized buying experiences, similar to their consumer purchasing. If companies can leverage data around inventory, incentives, and processes, they can support these types of engagements. Read more in “How Successful Distributors Are Beating Amazon at Their Own Game.”
Everyone’s Talking Supply Chain
Recently, an older, retired relative was telling me about the supply chain crisis. She never worked in the industry, and I’m pretty certain that until this year she never used the term “supply chain.” Global challenges in this area are making news everywhere, but are most painfully clear to the wholesale distribution industry that has always been the conduit for goods and services.
And while disruptions in the supply chain are nothing new, a new approach is needed – like using intelligent data to plan for disruptions. Learn how companies can be more prepared in this article, “Planning for Disruption in Wholesale Distribution.”
The pandemic has also shown that distributors need more supply chain flexibility as well as more visibility. “Supply Chain Collaboration in Wholesale Distribution” is a way to help mitigate risk and respond to unforeseen challenges. Giving suppliers greater transparency can help transform the supply chain from disconnected to collaborative.
Collaboration is just one part of the overall transformation of a distributor’s logistics processes. To compete in the global market, companies need to innovate to meet demands, but also do a better job of planning, procuring, storing, and delivering goods. “Transforming the Digital Supply Chain” discusses the challenges and offers some solutions for improvement.
Sustainability for the Future
In the past, we didn’t hear too much about sustainability from wholesale distributors. For these companies with traditionally small margins, the cost of “going green” seemed out of reach. But recently, the topic is gaining some traction as the definition of sustainability is being rewritten in this industry.
For example, a healthcare distributor might have sustainability goals around the reduction of hazardous waste or product integrity. A food distributor might focus on green logistics, zero emissions, and lowering their carbon footprint. Some companies are already moving in this direction. Read their stories in this article, “Sustainable Distribution: Profitability with Purpose.”
One company that is serious about sustainability is wholesale distributor BayWa, which has been recognized as one of 50 sustainability and climate leaders worldwide. BayWa is helping farmers grow profits while pioneering new, more sustainable farming models with renewable energy projects and technologies. Learn more about its innovative efforts in “How BayWa Is Working with Farmers to Increase Yield and Protect Biodiversity.”
The Future Is Now
There are certainly threads that run through all these trends – planning, innovation, flexibility, visibility. While these ideas have always been around, they have never been more important for distributors than now. The industry – and the world – will continue to change, and wholesale distributors must plan for the road ahead.
Lynn Lupo is solution manager for Wholesale Distribution at SAP.