According to a report from Deloitte, after years of evolutionary change, the wholesale trade industry now faces significant disruption and a true inflection point. Evidence for this assertion can be seen in the multitude, magnitude, and diversity of disruptive forces impacting distributors across all trade lines and the erosion of the industry's financial performance.
Digital Disruption
Digital disruptions are reshaping distribution value chains and transforming businesses and business models. Digitization in distribution encompasses the accessibility and standardization of information via the growing adoption of modern packaged ERP and the transformation of revenue generation via the increasing adoption of e-commerce. It also incorporates disruptions enabled by advances in mobile, including the virtual stockroom and such Internet of Things (IoT) capabilities as real-time remote inventory sensing. But what makes digital a genuinely disruptive force is not the enabling technology but the transformational shift in value creation that it is driving.
The Shift in Value Creation
Ask a wholesale trade executive what their company does, and many will say, "We buy stuff, and we sell stuff." Value creation for wholesalers with this mindset is driven by their efficient conversion of physical assets (i.e., inventory and receivables) to cash. Accelerating digitization is fundamentally disrupting that equation.
Now wholesalers have the opportunity to generate incremental value by applying information, analytics, and insights to critical business decisions. Digital transformation is not only empowering distributors to make more informed decisions about what inventory to stock, how much, and where to store it, but what value proposition will resonate with each customer segment, what price to charge, which markets are growing, which segments value private label, which customers prefer F2F sales vs. self-service, and which customers offer the most robust growth potential.
Price Transparency
Digital transformation is also driving greater pricing and availability transparency. Some wholesalers have thrived in market niches with a certain level of pricing and availability opaqueness. However, digital enables customers to "shop" for items from various suppliers and for wholesalers to offer an endless aisle of products.
Conclusion
In the future, the supply chain will transform with technology to become more efficient, transparent, and integrated. Wholesalers of the future will need to elevate information technology from back-office enabler and cost to be managed to front-office energizer and source of differentiation.
Read more here: https://www2.deloitte.com/us/en/pages/consumer-business/articles/wholesale-distribution-trends-disruption.html
Have any queries about how your wholesale organization can benefit from Zooloo's digital solutions? Contact us at sales@zooloo.asia.
Explore more
- Read about The Digital Transformation Journey
- Learn more about our “Digital Backbones”
- Learn more from our eBook series on Digital Transformation for Wholesale Trade
Tags:#digitaltransformation #B2B #digitaladoption #digitalintegration #covid19 #digitalsolutions #wholesaletradesector #wholesaletrade
