What are the Key Trends in Distribution?
Ongoing trends continue to shape the distribution industry. The expansion to online sales channels, new possibilities with B2B, and shifting markets all present greater opportunities. These developments can cause business leaders to ask themselves what’s needed to make their business adaptable.
Investing in enterprise resource planning (ERP) software, among other programs, can signal a productive shift. Every distributing business wants to find a way to improve themselves, increasing their overall worth in their industry. Thus, resulting in a company building upon what made them successful, while adapting to the modern market.
Here are three top trends in the distribution industry that you should be prepared for.
1. Data-Driven Decisions
Data is hugely important, today, and that will only continue—you can’t read an industry magazine or report without seeing the term data-driven decisions. But what does that even mean?
Data-driven signifies an organization whose decisions are based on the information they have internally. Rather than a gut feeling or personal experience, everything is based on what is known to be correct. That being said, many business leaders misinterpret what that means: They think writing reports or having a lot of information on file is enough. But simply reporting figures or having large amounts of knowledge doesn’t mean anything if it lacks relevance and structure. To make a data-driven decision, you must have the right information, it must be pertinent, and then you must draw a conclusion.
Essentially, by harnessing the power of data, distributors can create the best possible opportunities for their organization. Such decisions will mitigate risks and provide a better foundation and structure for growth.
While eCommerce isn’t anything new, its continuous growth—especially in the wake of Covid-19—has made it increasingly prominent. In fact, in 2020 online sales grew by 44%, accounting for $861 billion in sales.
Adopting eCommerce options is essential to any business’s future, and distribution businesses are no exception. As a distributor, you can enhance yourself and develop a better sense of your target demographics. Looking at repeat purchases by different clients can create a stronger understanding of your business. Rather than looking at costly overviews, this provides direct, up-to-the-minute information for your staff.
At the same time, an online portal like Magento eCommerce can expand your outreach to new customers, while allowing for easier access to all. Most customers want to work with a business that can handle their immediate needs without delays or frustrations.
If your business already utilizes enterprise software, like an ERP system, you can easily integrate your eCommerce solution with your enterprise software. Thus, harnessing the power of a full solution with product pages to match customer searches. All of which creates a seamless link between every aspect of your company. Not simply a way to sell products online, eCommerce allows a fully realized and structured system. The benefits of which can propel your business into higher profits and growth than previously imagined.
3. Changing Distribution Models
Not only is technology changing the distribution industry, but it’s also changing overall business models. Market segmentation is a topic frequently cited in business publications, but it’s often ignored. To develop an appropriate strategy, businesses must place their clients and potential customers into specific segments. Distributors are no different—they must understand what their markets look like and how to react. This often requires a change of pace for businesses.
The expansion of online retail alongside other nontraditional forms of distribution has created the conditions for change. As distributors transition towards the changing world, the key for owners is to take note of ongoing trends.
Embracing the expansion of online sales and reconfiguring your business model to adapt is critical for a distributor; however, the steps you take shouldn’t just be based on the norm but should be based on what works best for your business.
With the massive growth in online retail over the last few years, expanding in that direction is essential. eCommerce technology, like Magento eCommerce, provides a gateway towards expanding your ever-growing customer outreach. Rather than being limited by a physical location, and older methods, you can reach clients quicker and provide better results.
Moving forward, transitioning your efforts to an online sales portal can improve your role as a distributor. This all goes back to the reality of changing distribution models that are becoming normalized. While the industry continues to shift and develop, understanding these shifts will become important strategically for your company. Changing the way you ship and control inventory, can greatly simplify your business practices. Rather than preventing your growth, and potential expansion, one can reorganize into something closer to their goals.
By avoiding wasting time and resources on costly procedures you can better respond to customers and create new opportunities. That goes back to a very fundamental reality for distributors, that of newer opportunities for expansion. No matter who you distribute to, understanding the shifting dynamics of your industry is the most important element for your business.
To harness the power of enterprise technology to thrive in these top distribution trends, contact Datix today!