The digital economy is changing the way that distribution firms behave, creating new business models, new competition, and new challenges as firms strive for new business. According to a recent Aberdeen Group study, 87% of wholesale distributors report “more challenging and complex fulfillment requirements – eCommerce and multichannel or cross-channel demand impacts.” What does this mean and what can you do to gain a competitive edge? Read more below.
Challenges in the Digital Economy
With new order channels, new warehouse and fulfillment initiatives, and new processes, the distribution industry is facing a period of immense change. This, according to the Aberdeen report, Wholesale Distribution: Digital Economy Impact and Survival, found that eCommerce has changed the way distribution firms look at business, and has created new paths to profitability for innovators and leaders.
Citing the phenomenon that is the “B2B and B2C Convergence,” Aberdeen notes that “today’s distributors find themselves managing their traditional B2B business, their eCommerce site, and now, even their customer’s eCommerce business.”
While this convergence has created opportunities, it has also created challenges. Most notably, surveyed distribution firms found issues in adopting more efficient warehouse processes and responding profitably to these changes, improving labor efficiency and workforce productivity by reassessing management software, and improving throughput capacity. With the push for faster service—including next-day and even same-day shipping—customers are developing higher expectations.
Competitive Pressure is Mounting—Are You Ready?
Whether you are finding new competition in the form of Amazon or in the form of a more traditional competitor, you need to evolve in order to thrive. Wholesale distribution is under tremendous competitive pressure to modify their business model, and take on all the challenges thrown at the them for support by their customers.
With so many paths to success (or failure), taking the right steps to evolve your business model today can pay dividends as they look to reach current and prospective customers tomorrow. As distribution firms fight for survival, Aberdeen Group recently released a new report on tactics and strategies to succeed. Provided to you for free from our friends at Acumatica, you can download the entire Wholesale Distribution: Digital Economy Impact and Survival Guide.
As a leading Acumatica Partner, CAL Business Solutions has helped distribution firms like yours to discover, implement, and operate cloud-ready, distribution-focused enterprise resource planning (ERP), customer relationship management (CRM), and business intelligence software.