Manufacturers may view direct-to-consumer (D2C) business models as a significant opportunity to increase profit margins in an otherwise tight market. Yet, the last thing any wholesale distributor wants to worry about is whether it must compete against its own suppliers.
Unfortunately, this concern is becoming all too real for the industry. D2C sales in the United States alone grew 45.5% in 2020, and analysts from eMarketer expect this trend to further expand over 14% year-over-year until 2023. Such actions include popular beverage brands that have launched pantry-oriented and snack-good Web shops to ship their products straight to people’s homes. Even fashion brands are seizing the moment by dramatically streamlining their retail-partner ecosystem to focus more resources on their brand e-commerce channels.
While their suppliers have certainly increased their investments in digital commerce, distribution businesses are far from standing still. In MDM research data, many surveyed distributors indicated, anecdotally, an intention to invest time and resources to make e-commerce programs more comprehensive and customer-friendly to satisfy customer expectations for online engagement and convenience.
However, to be truly successful, businesses must first bridge a gaping hole in their strategy that can become a liability for their e-commerce vision – a paradigm of isolated legacy systems, spreadsheets, and clipboards.
Changing Digital Priorities for a Competitive Edge
With efficiency, productivity, and brand awareness at the top of their agenda, distributors also face considerable labor shortages, rising expenses, delayed logistics services, and clogged supply chains. This perfect storm of challenges is alarming enough that department heads demand access to real-time insights to get ahead of every ebb and flow in their operations productively, transparently, and intelligently.
This call for better data, more readily available information, and clear insights is well-founded. According to IDC, one-third of wholesale distribution companies drive higher employee productivity and reduce manual processes when all forms of content are unified enterprise-wide on a single platform.
For many distributors, the platform that delivers on that promise is an integrated enterprise content management (ECM) solution called the SAP Extended Enterprise Content Management (SAP Extended ECM) application by OpenText. Digitalizing processes allows organizations to take advantage of modern technologies – such as artificial intelligence (AI) and machine learning – to capture, organize, and analyze massive volumes of data and derive much-needed insights. In return, they are better positioned to deliver a positive customer experience and ensure customer loyalty while boosting business productivity, performance, and compliance.
Distributors can also perpetually link their data to appropriate documents, transactions, sources, and workflows and embed machine learning and artificial intelligence capabilities into existing applications to automatically process and analyze all that information. Furthermore, their workforce, supply network, and other stakeholder organizations can leverage insights in a collaborative workspace and manage and share critical records in a secure cloud environment.
With all these advantages of SAP enterprise content management solutions by OpenText, distributors can close the gap in their e-commerce strategies and provide offerings that their nontraditional competitors – primarily manufacturers – cannot. They include value-add services ranging from buy-hold-sell distribution, product consulting, kitting and assembly, rentals, and logistics services to audit and risk management, product as a service, maintenance providers, and financing options.
For example, a spare parts distributor could assemble and customize hoses for a specific machine used by individual customers. Meanwhile, those in the grocery segment may cut fresh vegetables and create packaged salads per the customer’s requirements. Whatever differentiating service, the industry can evolve fast enough to drive customer stickiness and long-term profitability with a repository of real-time enterprise data and information.
Building a Future as an Anytime, Anywhere Distributor
While some wholesale distribution companies may have been slow to embrace e-commerce, it’s not too late if they learn from the mistakes and successes of early adopters. And one of the lessons is the importance of smooth information sharing and workflows when improving efficiencies across key business areas and functions such as procurement, inventory, operations and supply chain, accounting, and finance.
Now, with SAP ECM solutions by OpenText, distributors can deliver an e-commerce experience that goes beyond products and focuses on providing the kind of customer value that helps them stand out in a D2C world.
Ready to learn how SAP ECM solutions by OpenText can turn your wholesale distribution business into a provider that fulfills customer needs and remains profitable? Read the info sheet, “Reinvent the Value of Wholesale Distribution with Integrated Content Management.”