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Author's profile photo Paul Pretko

Distributors need to “Disrupt Themselves”

NAW Members need to Disrupting Themselves

This year, nearly 300 members of the NAW attended the annual executive summit in Washington DC. The theme of this year’s summit was “Disrupt Yourself.” It was a well-attended executive summit for good reason.

The industry is evolving, and distributors recognize that to remain relevant, they need to move from traditional to digital distribution. Executive summit participants were anxious to hear from peers and thought leaders about how to transformation their businesses leveraging components of an intelligent enterprise.

Leveraging an intelligent enterprise is profound way to accelerate the transformation of a distributor’s business models, processes, and work to fully leverage digital technologies and their impact across the value chain in a strategic way, with revenue growth through e-commerce as just one component.

The Amazon effect acceleration was one of the main topics discussed during this year’s executive summit. Many distributors still struggle to build an effective online presence to compete with Amazon and other web catalog companies that are picking off high volume and margin categories by leveraging new delivery, selection and pricing processes. Distributors were eager to hear how they could disrupt themselves to get positioned for the future and gain a competitive advantage against Amazon.

Some interesting e-commerce related comments shared by summit presenters and panelists included:

  • If a distributor as already losing 20% of previous sales to Amazon, it could be the beginning of the end without a rapid transformation
  • B2B is now projected to be twice that of B2C sales in the near term
  • Distributors shouldn’t try to be Amazon, they need to leverage technology to beat Amazon

I found it interesting that many of the discussions at the summit confirmed much of the MDM research from last October that showed 70% of distributors are not yet successful with e-commerce.

  • 24% of customers cannot realistically use a distributors website for regular purchases
  • 46% of distributors have a sales order enabled website, but the technically has underperformed their expectations
  • Only 30% of distributors have a sales order enabled website, and are happy with the result of their implementation

I believe it’s clear, that in 2019, distributors need to transform from traditional distributor to digital disrupters. The greatest importance in wholesale distribution e-commerce selling is the ideas of customer centricity and the use of data and agility throughout the value chain. Embracing “beat Amazon” practices allows for more opportunities in all other areas of business support, including marketing, commerce, sales, and service. In short, the wholesale distributor must disrupt themselves and transform into digital connected distributor.

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