The needle in the haystack
Recently, I was asked if I really thought that Wholesale Distribution would be any different in 30 years from now? To me the answer was so obvious, that I took me a few seconds to answer. Without polishing the crystal ball immediately, let’s look back 30 years and think about how much our world has changed since then.
Back in the second half of the 1980’s, most of my music collection was still on tape, the Internet was still not available to most of us. When I had to write a school paper, (yes, in 1986 I was still in high-school) I would go to a library and hope they had a book or two on my subject.
My PC had a hard-drive that most modern cameras would fill with less than 5 shots. Drones were science fiction, globalization was not part of my vocabulary and shopping internationally meant bringing home something from a vacation.
I think we will all agree, that the world has changed dramatically since then, and within it the way we do business. Technology went through revolutionary cycles and most of it is – directly or indirectly – based on data – vast amounts of it.
A 2015 study has revealed that 90% of all data ever created was released in the last two years. With the emergence of all kinds of intelligent tools and gadgets, it is not surprising that the same study suggests continuous data volume growth rates north of 40%.
Granted, if I look at some social media posts I would admit that a lot of that data has limited value. But on a less judgmental level, I think for the first time in history, we probably have not too little data, but the challenge is to be able to comprehend the vast amount of information available, create insight and act based on that knowledge.
In Wholesale, we traditionally already had a very detailed picture of our customers, especially on the sales side. Our industry benefits from maintaining close relationships with our customers. In our new, global and virtual world these relationships are becoming more complex – a risk for future success, but more importantly a vast opportunity.
Customers do have the choice and it is simple, to take their business elsewhere. But, we need to understand how to best meet our customers’ needs and to be really successful, we will have to find the approach for the individual or for groups of customers with similar interests.
Already today, we see Wholesale companies using sentiment analysis to optimize their assortments. Items that receive bad feedback can be eliminated to avoid unhappy customers. In a next step, predictive modelling is used to increase efficiency for new product introductions and monitor success. Customer segmentation will have to significantly evolve to factor in additional aspects and insight to really deliver personalized offers and value. And we will have to find ways to stay engaged with our customers across all channels consistently.
The key to success is being able to compile all information across different sources – both virtual and direct – and create an instant picture that can be used to best service the customer in the moment. Just because he was looking for a printer a week ago, does not mean that he is still interested in that purchase today.
So back to the initial question, I am convinced that in 2046, the world and the Wholesale Distribution industry will look significantly different than today. And, while my crystal ball is a bit murky on how much automation, robotics, drones and virtual reality that will include, it is fairly clear on one point: everything will be based on data and the ability to use it to drive informed action and activities.