Data and analytics, customer experience among top wholesale distribution trends for 2023
This Lunar New Year, we celebrate the return of the rabbit, considered the luckiest of the 12 creatures comprising the Chinese Zodiac. In Chinese culture, the rabbit symbolizes agility, longevity and prosperity. Distributors who lack the right tools, data and strategies and are still dependent on manual processes will not be agile enough to survive — much less thrive and prosper — in 2023 and beyond.
Don’t go down the rabbit hole
You’re in a business of razor-thin margins. Increasing your margins while outmaneuvering your competitors with limited resources is the name of the game. That can be easier said than done with all the distractions and challenges you’re facing in these post-pandemic days, including:
- Supply chain disruptions
- Product and labor shortages
- Inflation and rising prices
- Manufacturers selling direct
To flourish in 2023 and beyond, I recommend you focus on 6 critical priority areas:
- Customer experience
- Removing slow, antiquated systems
- Data and analytics
- Effective rebate strategies
- Digital transformation
- Profitable growth
Get on the good foot with customer experience
It’s no surprise that today’s customers demand much. You must be more competitive and agile to offer your customers the best products, services and solutions. Distributors who focus on the wrong things will be left behind.
The rabbit is known for its ability to create and maintain harmonious relationships. You must understand the value you provide and effectively communicate this to your customers.
Even in today’s digital environment, some distributors manually enter data invoices, much to their detriment. Distributors who can capture and analyze massive volumes of customer data are better positioned to:
- Deliver positive customer experiences
- Ensure customer loyalty
- Boost business productivity, performance and compliance
- Improve decision-making, business performance and efficiencies across the business
Be the hare, not the tortoise: remove slow, antiquated systems
Distributors using basic, outdated accounting systems and customer relationship management (CRM) platforms can’t process orders and handle transactions fast enough. This leaves operations and sales teams spending too much time updating spreadsheets instead of processing orders.
You’d be better served by a single, user-friendly system that automates tedious processes and centrally stores all your data.
Get a jump on your business with data and analytics
Successful distributors focus on analysis and insights to drive their business — everything from how frequently customers order products to the type of products they prefer and changes in their routine.
With accurate, timely and relevant analytics, wholesale distributors can make data work for them to:
- Create sales forecasts
- Anticipate demand
- Reevaluate processes
- Make confident decisions
- Drive operational efficiencies
Data and analytics tell you what you’re doing right or wrong and provide insight into vital improvement steps. You must understand your data and exploit it to further your business goals.
Effective rebate strategies — the carrot, not the stick
To be more creative with your financial and operational plans, you must develop and implement effective rebate strategies that account for rapidly changing market conditions and align with your business goals. Outcome-based rebates go beyond typical promotions like discounts.
Benefits of rebates:
- Provide the incentive to sell particular products
- Deliver performance metrics like sales volume
- Forge productive long-term relationships by providing mutual financial benefits
All ears for digital transformation
Digital is no longer optional for your business — it’s mandatory. You’ll be rewarded with reliable customers if you offer convenient, multi-channel experiences. You won’t need to chase after customers who cherry-pick your business for your best prices and then go on to buy from your competition.
Why continue to use manual tools like spreadsheets for rebate management when this can lead to mistakes and inefficiencies? Digital transformation isn’t just necessary for visibility and rebate management — it’s also vital to attract and retain customers. You need to offer customers omnichannel experiences (in-store engagement, mobile apps, websites and more) and online ordering, tracking and inventory management.
Competition from large online retailers makes it increasingly difficult for you to earn and retain customer loyalty. To survive, you must turn to digital transformation to offer your customers personalized services, real-time information and transparency.
Grow like rabbits, profitably
Profitable growth is more critical than ever. Distributors who grew faster with holistic growth blueprints and higher aspirations delivered 2.3x more returns to shareholders and achieved higher multiples than their peers. As a distributor, you’ll be in much higher demand if you generate that type of return.
Overcoming supply chain disruptions and labor issues will continue to be a priority in 2023 as it represents a risk to sales and profits. Improving your relationships and communications with customers, suppliers and partners is always a good idea.
Pull a rabbit out of your hat in 2023
Now is the time to reevaluate your changing needs, customers and prospects so you can overcome obstacles and achieve greatness. Focusing on the 6 critical priority areas for 2023 can help nurture and maintain healthier relationships and experiences with your customers for years to come.
FOR MORE INFORMATION ON DIGITAL TRANSFORMATION, READ OUR EBOOK: “GOING FROM DIGITAL LAGGARD TO DIGITAL LEADER”