Top 8 Wholesale Distribution Trends (And They’re Not Just for Big Companies)

Transformation is everywhere, and the distribution industry is no exception. As a small to medium sized (SMB) distribution business, you may think trends outlined in articles like these only apply to enterprise companies. They don’t! With cutting-edge tools like Acumatica, the Cloud ERP, transforming your business is easier than you think.

996 global distribution companies shared their eight key trends for 2023 and we’ve outlined the high points below. Hint: they all involve the use of technology.

Take a look through the full trend list and start thinking about how you might use one or two to grow your business and stay ahead of the competition.

8 Trends for Distributors in 2023

E-commerce and Online Sales: The rise of e-commerce and online sales channels has been a major driver of growth for wholesale distributors. The growth of e-commerce has created new opportunities for wholesale distributors to reach customers, offer new products and services, and increase their sales. Many distributors have also established an online presence, either through their own e-commerce platforms or through eCommerce services. This has helped them to expand their reach and better serve customers, who increasingly expect the convenience of online shopping.

Action step: evaluate your webstore by looking at it through a customer’s eyes. Go incognito and try to purchase something on your own site. You’ll learn A LOT.

Supply Chain Optimization: Distributors are using technology and data analysis to optimize their supply chain operations, improve efficiency, and reduce costs. Supply chain optimization is a critical aspect of the wholesale distribution industry, as it involves managing the flow of goods from suppliers to customers. By using technology and data analysis, distributors can better understand their supply chain operations and identify areas where they can make improvements.

For example, they can use real-time data to track inventory levels, monitor delivery times, and optimize routes for deliveries. By improving the efficiency of their supply chain operations, distributors can reduce costs, minimize waste, and enhance customer satisfaction. Additionally, they can use data analytics to predict demand, manage their supply chain more proactively, and ensure that they have the right products in the right place at the right time. This can help them to improve their competitiveness and stay ahead of the curve in an increasingly competitive marketplace.

Action step: What data do you wish you had? What’s stopping you from getting it? Map out the ideal data landscape, compare it to where you are, and prepare a plan that will help you get where you need to be, in small, achievable steps.

Focus on Sustainability: Companies are increasingly looking to reduce their carbon footprint and adopt more sustainable business practices. This area has become a major focus for many companies, including wholesale distributors, as consumers and stakeholders are increasingly concerned about the environmental impact of business operations.

Some of the trends we are seeing in sustainability lie in green transportation services such as electric vehicles and alternate fuel sources, reduction in packaging, environmentally friendly packaging materials, using renewable energy sources, or more efficient energy sources. By adopting sustainable practices, distributors can not only reduce their environmental impact but also improve their reputation, attract new customers, and meet the growing demand for eco-friendly products and services.

Action step: Small changes over time have a big impact. What one thing could your company start doing today to reduce or offset your carbon footprint?

Emergence of New Technologies: Distributors are investing in ERP Solutions that offer

new technologies to improve their operations and enhance customer experiences.
Some of the key technologies being used include:

  • Artificial Intelligence (AI): AI is being used to automate routine tasks, analyze data, and make predictions about future demand. This can help distributors to streamline their operations, reduce costs, and make more informed business decisions.
  • Machine Learning (ML): ML is being used to analyze large amounts of data, identify patterns and trends, and make predictions about future customer behavior. This can help distributors to personalize their offerings, target marketing campaigns more effectively, and improve the customer experience.
  • Internet of Things (IoT): IoT refers to the network of connected devices that can communicate with each other and share data. Distributors are using IoT to track shipments, monitor inventory levels, and optimize delivery routes in real-time. This can help them to reduce costs, improve delivery times, and enhance the customer experience.

You might not be a tech guru, but modern ERP solutions, such as Acumatica, the Cloud ERP, have these built-in to give you enterprise level tools at a price you can afford. Investing in new technology will help you stay ahead of the curve in an increasingly competitive marketplace and better meet the evolving needs of customers. Additionally, they can gain a competitive advantage by offering more advanced and innovative products and services.

Action step: Look at what your current solution offers around data automation. It’s likely that you have features you aren’t aware of, of haven’t put in place because you were focusing on your day-to-day. If you’re in the evaluation stage for a new solution, make sure you’re asking questions about AI, ML and IoT capabilities, and dream big.

Focus on Customer Experience: Distributors are putting a greater emphasis on delivering exceptional customer experiences as they recognize the importance of customer satisfaction and loyalty. A modern ERP solution can help improve the following:

  • Faster Delivery Times: Customers increasingly expect fast and convenient delivery options, and distributors are looking for ways to meet these expectations. This can involve using technology to optimize delivery routes, reduce delivery times, and provide real-time updates to customers.
  • More Personalized Services: Distributors are using data and technology to personalize their offerings and tailor their services to the specific needs of each customer. This can involve using customer data to make product recommendations, offer customized pricing, and provide a more personalized shopping experience.
  • Improved Customer Support: Distributors are investing in better customer support to ensure that customers have a positive experience. This can involve using chatbots and other technologies to provide 24/7 support, offering multiple channels for customers to contact them, and providing in-person support at local branches.

By delivering exceptional customer experiences, distributors can improve customer satisfaction, increase customer loyalty, and build stronger relationships with their customers. Additionally, they can differentiate themselves from competitors and attract new customers in a competitive marketplace.

Action step: Take what you learned by being your own customer (action step #1) and work through any rough spots in the end-to-end customer experience. Is it easy to become a customer? Is it easy to order, get status updates, return items, get notified of delays or stockouts? What if the customer has a question? Fix what you can immediately and make plans for bigger improvements and communicate them to your customers!

Increased Competition: The wholesale distribution industry is becoming increasingly competitive as the number of distributors entering the market continues to grow. This increased competition is putting pressure on distributors to differentiate themselves and stand out from the crowd.  Using a modern ERP solution, which has new technologies embedded in it can help in all these areas.  It not only keeps your business competitive, but increases customer satisfaction, helps to launch new products efficiently, and you can analyze pricing trends and adjust on the fly to remain competitive.

Action step: Ask yourself why your ideal customer would buy from you as opposed to your competitor. If you find yourself guessing, ask your customers why they bought and continue to buy. Once you talk to a few customers (5 minimum), you should start to see some themes emerge. Use those to build out your differentiation, and double-down on areas where you already excel.

New Business Models: The emergence of new business models is transforming the wholesale distribution industry, as distributors look for ways to meet the changing needs of customers. Having a modern, well-designed ERP solution to run your business is key to managing new business. Some of the new business models that are emerging include:

  • Subscription-based services: Distributors are offering monthly or annual subscription-based services that provide customers with access to a range of products and services. This model can help distributors to generate recurring revenue, build stronger relationships with customers, and increase customer loyalty.
  • On-demand delivery: Distributors are offering on-demand delivery options that allow customers to receive products within a short timeframe, often within a few hours. This model is particularly popular in urban areas where customers are looking for fast and convenient delivery options.
  • Flexible fulfillment options: Distributors are offering more flexible fulfillment options, such as buy online, pick up in-store, or delivery to a locker, to meet the diverse needs of customers. This can help distributors to increase customer satisfaction and reduce the time and costs associated with delivering products.

By experimenting with these and other new business models, distributors can stay ahead of the curve in an increasingly competitive marketplace and better meet the changing needs of customers. Additionally, they can gain a competitive advantage by offering more advanced and innovative products and services.

Action step: Survey your customers on these areas and more to learn what they really value from a distributor like you. Do they want subscription options or flexible fulfillment options? If yes, which ones?

Greater Emphasis on Data and Analytics: Distributors are using data and analytics to gain a deeper understanding of their operations and make informed business decisions. By analyzing large amounts of data, distributors can identify trends, spot opportunities for improvement, and optimize their operations.  Some of the key areas for distributors are inventory management, supply chain optimization, customer analysis, and performance measurement.  By using data and analytics, distributors can gain valuable insights into their operations, make informed business decisions, and improve their performance in a rapidly evolving marketplace.

Action step: Take an inventory of all the ways your company currently captures data. From paper-based methods to scanners and webforms, outline it all. Then evaluate how each data point currently flows into your systems. This will create your ‘current state’ map and can serve as a jumping off point as you plan bigger and better use of the data you already have.

With supply chains becoming more complex every day and new economic pressures, partnering with someone who understands your business has never been more critical. Parallel Solutions has the distribution experience you need.  Give us a call and let’s discuss your strategy for the future.

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