Why Midsize Distributors Are Due For A Great Comeback

Magnus Meier

As the old saying goes, everyone loves a great comeback story. From our favorite sports teams and movie characters to news about everyday people, we enjoy celebrating moments of overcoming adversity, achieving impossible dreams, and experiencing the redemptive power of personal transformation.

The same could be said for midsize wholesale distributors. For over a decade, a few digital retail giants overwhelmed the once-stable business-to-consumer marketplace. Most industry experts believed (and feared) that these nontraditional players were setting the foundation for a massive takeover of the wholesale distribution industry. But the reality of this impending threat is deescalating as smart players begin to adopt data-driven insights and intelligent technologies.

According to the IDC InfoBrief, “Becoming a Best-Run Midsize Wholesale Distributor: Intelligent Capabilities Drive Differentiation,” data intelligence is empowering best-run midsize distributors to replace a traditional paradigm that prioritized operational control above anything else. Now, they are beginning to balance cost-efficiency with sustainable growth and profitability to deliver experiences that meet, or even exceed, customer expectations.

Finding a new edge with data intelligence

Although not a cure-all on their own, large volumes of data are clearing the way to a renaissance of competitive advantage for midsize distributors. This growing business intelligence, as indicated in the IDC report, is helping best-run players achieve four fundamental goals: improve customer services, create new revenue streams, access market and competitive insights, and drive product innovation.

how does data support the goals of best-run midsize wholesale distributors

Source:Becoming a Best-Run Midsize Wholesale Distributor: Intelligent Capabilities Drive Differentiation,” IDC, sponsored by SAP, 2019.

These capabilities allow best-run midsize distributors to offer customer-specific services at a scale that can out-compete their largest competitors. Such value-added offerings include, for example, proactive fulfillment with secure logistics and always-on supply chain collaboration. Furthermore, each step in the ordering process can be streamlined and automated, so the business can add more incremental value to customers – from the initial transaction to delivery at the customer’s doorstep.

One prime example of a growing distributor on the cusp of this trend is Reliance Communications. Knowing that on-time delivery is critical to its customers’ success, the one-stop solution provider for the world’s leading wireless carriers and device manufacturers works hard to ensure a launch is never missed or products never go stale. This requirement called for an effective distribution system that goes beyond just moving boxes. Instead, the company needed a fast, efficient, and uncomplicated operation to deliver a precise and transparent customer experience.

By replacing a disconnected landscape of multiple applications with an integrated 2-D bar-coding and warehouse solution, Reliance is running a highly efficient distribution model with a controlled system of financials, operational processes, and reporting. The company immediately receives, picks, packs, and ships a high volume of orders for serialized smartphones with minimal error (less than 0.1%). Plus, efficient product tracking and inventory controls provide real-time visibility into stock levels and locations, empowering resources to focus on the right opportunities for growth.

More importantly, Reliance is becoming a critical asset to its customers’ success. The new distribution model and expedited availability of order-specific information provide the visibility customers need to respond better to an increasingly dynamic marketplace of technology evolution and high demand.

Driving growth with a customer-centric mindset

For growing wholesale distributors, the hallmark of their future success is meeting and exceeding customer expectations in a highly differentiated valuable, and impactful way. Some may choose to hold safety stock for key customers. Others may decide to assemble and customize parts for a specific machine. And a few may offer personalized packaging to deliver on the requirements of a single customer.

No matter the business model and offering, moving toward a service-oriented path is a significant opportunity for midsize distributors. It’s clear that they can deliver product-related services that nontraditional competitors cannot provide. And in my opinion, this is the perfect setup for a good comeback story of recaptured customer loyalty, long-term profitability, and market-disruptive leadership.

Discover how best-run midsize wholesale distributors are driving revenue, empowering employees, and responding to customer needs with groundbreaking, more-efficient strategies. Check out the SAP-sponsored IDC InfoBrief “Becoming a Best-Run Midsize Wholesale Distributor: Intelligent Capabilities Drive Differentiation.

This article originally appeared in Forbes SAP BrandVoice.

Magnus Meier

About Magnus Meier

Magnus Meier is the Global Head of the Wholesale Distribution Industry Business Unit. Representing the industry inside and outside of SAP, he works to provide industry thought leadership, portfolio direction and the global go to market strategy. During his career, he acquired many years of extensive industry, solutions, services and support knowledge. In his last role as Customer Engagement Advisor, Magnus worked with Market Units in North America to develop customer specific programs that would allow them to accelerate the adoption of S/4HANA based on demonstrable proof points.