There are a number of factors inherent to the business of distribution which makes the advent of cloud technology an absolute boon for operators in this industry. Distribution is complex, no matter the products involved, and doing it successfully depends heavily on efficiency, throughput and accuracy, as margins are almost always slim.
As implied, this means distributors are obliged to invest in any technologies, techniques or methods which can help make things faster, lower-touch and closer to ‘zero returns’. And it just so happens that cloud systems, available ‘as a service’ allow distributors to take advantage of the benefits of reduced cost for technology, while still benefiting from the efficiency and visibility gains associated with modern enterprise resource planning software.
In fact, NetSuite has an e-book available which sets out precisely how cloud software addresses key trends in distribution. Unsurprisingly, it’s titled ‘Stories from the Front Line: The Cloud Addresses Key Trends in Distribution’. Don’t be put off by the ‘book’ in e-book: it is only 12 pages long, so it won’t take longer than an hour to read.
Those 12 pages are broken into the five key trends identified in distribution – and we’re confident that you’ll identify with all of them, again, regardless of the products you are distributing. Let’s take a closer look at those chapters (and trends):
1. Your target market is online, and you should be too
We all instinctively know this to be true; confirming it doesn’t exactly strain the limits of your Googling capacity, either. Online is obvious, particularly in New Zealand where we have excellent internet infrastructure and a population with near-universal access to it. While some of the bigger retailers may have stuttered and stumbled their way to viable web presences, they are there. And there’s plenty more going on in the background with B2B integrations on the back end, of that you can be certain. If you’re not in on this as a distributor, it’s not just you who is being sold short. It’s your resellers too.
2. Competition is everywhere, and they are more innovative and tech-savvy than ever before.
Things have changed a lot in the past decade. Differentiation is difficult (disties generally did it on price, primarily, then stock holding (expensive) and second-line support. These days, you need all of those things while yet taking what seems to be an ever-dwindling margin. Here’s the thing: this depends on technological excellence. Combined with good old-fashioned brilliance of people, of course.
3. Business models are rapidly changing as distributors explore new ways of going to market.
Brokerages are the new multi-billion business, if Uber, AirBnb, Netflix the like are anything to go by (and they are). These guys have transformed industries by connecting buyers with sellers with lower friction than ever before. Distribution is no less at risk of disruption: how many of your customers are already sourcing online from the lines of Alibaba? If you’re not offering a world-class service, someone else is…
4. Investing in technology is critical for the success of every type of business, not just the Amazons of the world.
Yes, we would say that, wouldn’t we? But that doesn’t make it any less true (see point 3 above).
5. Enabling employee productivity—particularly among millennials—is critical for achieving long-term goals.
Where you sit on millennials is perhaps less important than appreciating that most people today have better technology at home than they do in the workplace. That’s a problem because they see the disparity and realise they have better tools for productivity and convenience outside the office. Give them the same level of tech, and your biggest asset is likely to be more productive…and appreciative, too.
Go ahead and download the e-book here. It is a great read, interspersed with ‘real life’ examples of companies dealing with the trends outlined. And as I say, you probably experience every one of these trends in your business, every day.