2018 Recap: the State of Disruption in Distribution

Understanding the value and opportunities presented by digital transformation can be a significant competitive advantage

2018 has witnessed immense disruption with technological innovation sweeping the distribution industry, and the trend shows no sign of slowing down as we enter 2019. Understanding the value and opportunities presented by digital transformation can be a significant competitive advantage. However, ensuring businesses are evolving with the disruption rather than being disrupted is a vital factor for survival. To help set your business up for a successful and profitable 2019 we have examined the most noteworthy disruptive forces in 2018 and the possibilities they present:

Keeping up with the competition.

New technologies that enable businesses to reach outside their traditional geographical locations have given rise to e-commerce giants, such as Amazon Business, who are presenting a threat to traditional distributor’s survival. Amazon Business has and will continue to disrupt the distribution industry throughout 2019 through encouraging higher customer expectations on order fulfilment and price and providing smaller distributors with a piece of the market share. Businesses must adapt and be creative with methods to embrace and overcome this obstacle. Once this is achieved, B2B e-commerce platforms can be seen as a valuable competitive advantage. This could be through utilizing Amazon Business as an additional sales channel for excess inventory or as a push to implement automation technologies that minimize inefficiencies and support business growth. These technologies have proven to provide a valuable competitive advantage this year.

Unlocking insights.

Automation in distribution has become a key topic of discussion in 2018, ranging from back-end processes such as sales order automation to robotic process automation. The data and analytics produced from business automation now enable distributors to unlock valuable insights previously hidden in both structured and unstructured data formats. As more distributors continue to implement automation solutions into the business, understanding the true potential of data insights into customer behaviour is a key competitive advantage. Looking at data that resides in unstructured formats can disclose valuable customer information including purchasing habits, preferences and order frequency. For example, implementing automated sales order management software can be an important business transformation as 80% of purchase orders are still being placed via email. Thus, automating back-end processes can improve productivity and profitability throughout the business.

The digital transformation giant.

Digital transformation has been a consistent trend and frequent feature in news articles and conversations for decision makers in the distribution space throughout 2018. With a never-ending pool of digital offerings, distributors are being compelled to focus on key business objectives in order to apply appropriate and necessary digital solutions to business operations. Understanding the potential risks to employee roles, customer satisfaction, profitability and customer retention is vital when evaluating digital solutions. In the sea of disruption, retaining loyal customers and maintaining satisfied employees are essential to growth and long-term success.

The current state of disruption in distribution is a complex and evolving topic of discussion. With new technologies and innovative solutions entering distribution every day, we encourage decision makers to stay ahead through sustaining an open mind when seeking means to optimize business processes that support core business values and offerings.