New Year, New Dots To Connect For Wholesale Distribution

Werner Baumbach

Another year is coming to a close. But before we drive home after a night of New Year’s Eve festivities, it’s time for a new round of wild and random thoughts about the year to come.

Last year, I suggested a little New Year’s Eve party game of predictions for 2018. Did you go for it? How accurate were your predictions?

While experienced prophets wait for events to unfold, we now have the benefit of looking back. Like many other industries, the wholesale distribution industry continues to be disrupted and transformed, forcing companies to evolve their strategy to survive in a continuously changing world. In some segments, businesses are already turned upside-down. Here are four examples of those changes.

1. Sales reps begin to rethink their role

A few days ago, we were shopping for a new refrigerator. We walked into a local electronics store and got a hold of a shop assistant who was less than thrilled to assist. She managed to answer virtually all our questions with some obscure guesses and a suggestion to research online. Needless to say, this money-for-nothing business model did not inspire us to purchase the appliance immediately. Additionally, after completing our research, we discovered that the two only decision factors for selecting a vendor were price and delivery conditions.

Admittedly this is a B2C example. But at a recent wholesale distribution forum, several presenters discussed the changing role of the sales rep in the industry as well. Customers, B2B and B2C alike, expect added value from a salesperson: advice, consulting, and information. Just being social and handing over a contract to sign will not satisfy customer requirements any longer.

2. Data is a critical part of creating lasting customer relationships

We have seen a lot of publications about data being the new oil, fueling business models of the future. With empowered and knowledgeable customers, I just outlined that the role of sales and their relationship with customers need to change. It’s all about the money, of course. But to get there, it is most importantly about building deep, lasting relationships and partnerships.

Some fundamental virtues are still critical or gaining importance, such as using insight and knowledge to fuel the ability to give good advice. But in an omnichannel business environment, the challenge is to spread such knowledge across your entire operations and ensure that everyone can use it. To achieve this, knowledge needs to be digitized. Then, we can apply advanced logic to drive more value, find new insights, and create new revenue streams.

3. Communication continues to evolve

While I was annoying my parents by keeping our telephone line busy for hours talking to friends, much of today’s communication has shifted to texting. While asynchronous by design, the expectation is still focused on speedy replies. It’s basically impossible to go out with friends or colleagues without half of them checking their messages and chatting with parties currently not present and ignoring the ones that are.

How is this new communication style changing expectations for business exchanges? And what opportunities are possible?

Technology advancements in chatbots and digital assistants have made huge leaps, both in written and direct voice communications. In many cases, it is becoming difficult to tell, whether you are talking to a human or a machine. So much so, that these virtual personas are frequently asked on dates and get marriage proposals. And really, as long as you get the right answers even quicker and don’t have to wait on hold, does it matter that you are talking to an artificial assistant? On the operational side, it means that your service teams can focus on cases that are more complex instead of answering the 50th routine question.

4. Robots enter a wider range of use cases

Like digital assistants and chatbots, robotic technology has made huge leaps in this field as well. Check out this cool video, to get a feel for just how revolutionary some of these breakthroughs are.

Robots and drones are becoming common in warehouse operations and will expand into other areas of logistics quickly, such as driverless vehicles or drone delivery. But we’ll also see them take over new roles in service, maintenance, and customer interaction. With some of these new capabilities, I think it is not too farfetched to be concerned about specific roles and jobs. And while I believe that not everyone’s a winner in this technological (r)evolution, I do think that, in many cases, there will be a symbiosis between human and machine. It will allow human employees to focus on tasks and situations where they can make a difference without being bogged down in routine operations.

My last word for 2018

While I am not as convinced that SkyNet is just science fiction as it was in 1984, the line between progress and threat is only the width of a spider’s web. Technology can take us either way, but I look forward to seeing it all unfold.

So before I let you celebrate or enjoy the final days of 2018, I would like to wish you peaceful and silent days and nights between now and throughout 2019. Have a happy, healthy, and prosperous year and let’s continue making the world a better place!

About Werner Baumbach

Werner Baumbach is a solution manager for the SAP Global Wholesale Distribution Industry Business Unit at SAP. Werner has over 20 years of experience in different roles in software and consumer industries. He has a passion for innovative and future technologies and solutions in Wholesale and Retail.