Best examples of B2B e-commerce: Companies winning the game
B2B buyers have changed. How are companies keeping up? Here are five brands that provide shining examples of B2B e-commerce.
As a central link within the economy and supply chain, wholesale distributors act behind the scenes to source and distribute goods to customers around the world. After a tumultuous 2020, what are the 2021 wholesale distribution trends to watch?
Throughout the COVID-19 pandemic, distributors have been challenged with unpredictable demand, increased strain on customer relationships, supply chain disruptions, and an intense need to safeguard the workforce.
Wholesale distribution trends to watch
Based upon recent disruption and market dynamics, the wholesale distribution industry will continue to be reshaped by four major trends:
- Increased competition and new disruptors
- Global dynamics impacting supply chains
- Social changes resulting in a talent crunch
- Regulatory requirements adding complexity
Let’s examine these industry trends and how distributors can turn them into core differentiators and growth opportunities.
Growing competition and new disruptors
The wholesale distribution industry is facing increased competition from suppliers, adjacent industry players, and marketplaces. These nontraditional competitors are leveraging technology to disintermediate distributors and capitalize on evolving opportunities like the B2B e-commerce market, which is expected to reach US $20.9 trillion by 2027.
Today’s B2B customers are driven by convenience and personalization. They benefit from having many channels to buy the same products that distributors offer, but with compelling pricing and delivery options.
This increased competition is paving the way for business model innovations, challenging distributors to find new revenue sources through value-added services and project management. These services allow distributors to add value with something that can’t be offered by online distributors, supporting customer loyalty and “stickiness.”
One of the biggest 2021 wholesale distribution trends: Global dynamics impacting supply chains
Acting as a first responder in the logistics supply chain, wholesale distributors play a pivotal role in the global supply chain.
During the pandemic, geographic dependency, regulatory restrictions, and manufacturer slowdowns forced distributors to quickly monitor and respond to sourcing risks while balancing a shift in demand patterns.
Chip Kleinheksel, Principal at Deloitte Consulting, says distributors have to be much more in tune around how they plan inventory, how they manage inventory, and how to better forecast understand the demand that’s going to be coming their way.
“Because if you think about COVID-19, it went one of two ways for many distributors – the demand either spiked up, and they got a huge demand that they weren’t all prepared for, or the demand fell. Distributors had to figure out, how do I best manage the inventory I have? How do I find new channels to go sell it?” he says. “Because of this, I believe we will see more focus on the core technology that they create and also leveraging other tools to better forecast and plan around demand.”
The need to anticipate future supply chain disruptions has shifted distributors’ focus on forward and reverse logistics. They’re particularly focused on demand, inventory, and supply planning processes.
McKinsey believes that organizations can retain their position in the supply chain amid market disruption by creating supply chain transparency, estimating available inventory, assessing realistic demands, and managing working capital.
Social changes lead to a talent shortage
IDC found that 35% of knowledge and frontline workers will consider social, environmental, and humanitarian actions as key criteria in employment decisions. With talent putting an increased focus on working for companies with a purpose and a high brand value, distributors and other less-prominent B2B industries are struggling to attract the talent required.
If purpose isn’t a part of your business, your business is at risk
Imagine purpose in business like an unspoken company tagline. It's the setup and the punctuation of every action. It's the marrow of what moves a company.
This new wave of talent is also looking for roles where they can add value to the business and use new technologies to access real-time insights, thereby reducing repetitive tasks.
To retain and recruit top talent, distributors should empower employees to focus on high-value tasks by leveraging insights embedded in their operational activities. One way to do this is through process mining. This allows distributors to analyze chains of transactions from origin to closure to identify process breaks and highlight manual interactions or deviations from best practices.
Talent management: Creating a people advantage with HXM
Successful talent management focuses on the employee experience. With HXM, businesses can leap ahead by supporting their employees to excel.
Regulatory requirements add complexity
Increasing regulatory requirements are adding complexity for wholesale distributors, specifically in the areas of customer protection, circular economy trends, national mandates, and product traceability.
Depending on the varied regulatory requirements within each distribution subsegment, the overwhelming need for trusted products requires distributors to track, trace, and monitor goods along the entire supply chain. This practice often increases the cost of doing business.
The ethical supply chain: Definition, examples, stats
Consumers expect more from the brands they buy from, and an ethical supply chain is now a requirement. Learn what it means and how to get started.
Proactive distributors can use a digital platform that allows them to adapt to security and regulatory requirements, laying the technology foundation required to meet long-term compliance needs with minimal impact to the bottom line.
Accelerating technology evolution in wholesale distribution
One thing is clear from the key 2021 trends – agility is key for success in today’s wholesale distribution industry. With technology playing a crucial role for market leaders, distributors need to make continuous innovation an inherent part of their operating model.
To build an innovation-friendly culture, distributors must invest in expert skill sets, while establishing a value and change management practice that supports organizational ambitions.
I recently met with Kleinheksel to discuss the top challenges facing distributors today and how to develop an agile business model to innovate upon for years to come.
In this episode, you’ll learn:
- Insight into four major wholesale distribution industry trends
- Impacts of growing competition and new disruptors
- How global supply chain disruption impacts distributors’ ability to deliver on customer expectations
- Key societal changes that are creating a competitive talent landscape
