What does digital transformation mean in wholesale?
It has been said over and over again: buying behaviour has changed. Buyers across all sectors are tech-savvy, avoid face-to-face interactions and want product data at their fingertips.
Digital transformation does not have to mean selling online for wholesale distributors (although, we recommend you keep that in mind), but it definitely means changing to serve the digital-first customer.
What does digital transformation mean in wholesale?
Digital transformation in wholesale means serving customers, and possibly consumers, digitally. Think online product guides, electronic catalogues and automated reordering. It also means being able to leverage unified data to gain insights into internal operations and processes. Digital transformation gives companies access to the information they need to get to know their customer requirements and segmentation, drives more effective marketing campaigns, and allows business leaders to make data-driven decisions.
Why should wholesale distributors think about digital transformation?
The industries that many wholesale distributors serve (pharma, food, tech, automotive and fashion) have switched to digital-first strategies. As those B2B companies are adopting more technologies, they are expecting their suppliers to evolve as well.
Wholesale companies that want to gain a competitive edge need to leverage technology in order to best serve their customers and consumers. As industries move to meet the needs of the modern buyer, business models will need to change and transform. The traditional wholesale customer relationship has become more driven by end consumer needs and demands, as well as an overall change in buying behaviour. In-person sales are fast becoming an ineffective sales model and are unable to sustain the needs of today’s markets.
How does digital transformation happen in wholesale?
Make sure your company is ready for change
According to an article by Digitalist Magazine, there are three critical steps that an organization should take before attempting to digitally transform to make sure their organization is ready to accept the changes needed to be successful.
- Work to improve your core business to better differentiate your company.
- Work to remove human bias and errors and leverage data to drive smarter business decisions.
- Work to truly understand the current and emerging behaviours of customers to generate new business models and processes.
By going through these exercises, a company can gauge their appetite and readiness for digital transformation.
Adopting the right tools and attitudes
From there, wholesale distributors must adopt the following:
- Digitize the supply chain — Connect business elements using digital technologies and innovative processes to automate production and logistics. Unified data can help improve operational efficiency and the ability to deal with unforeseen supply, demand, or manufacturing issues.
- Personalize the user journey — With unified data, it becomes possible to capture customer requirements effectively and drive mass personalization at scale. Accounts linked to specialized prices lists, unique customer portals and direct sales are all possibilities.
- Embrace a consumer-centric mentality — Even though the organization may never serve the public, the B2B buyers that they do serve are learning to expect a consumer-like buying experience. Digital catalogues, with in-depth product information and possible online purchasing, are going to give wholesale distributors an edge.
- Adopt new business models — Developing a strategy to uncover and embrace new business models and revenue streams, such as combined product and data-centric service offerings, can increase life-cycle customer touchpoints and improve long-term margin opportunities.
What does it take to digitally transform?
Organizations that are tossing around the idea of digital transformation need to have this single, fundamental fact in mind: Digital transformation is not simple, fast, easy or cheap. A single application or platform change honestly won’t cut it. It requires a complete change in the overall DNA of their business. That may look like:
- Current employees working in new roles.
- New tech-savvy talent that drives change.
- A culture of continuous innovation that embraces change.
- Properly leveraged technology and data to drive better business outcomes.
“The innovation challenge exists because digital transformation cannot be solved with technology alone.” - Futurum, Accelerating Digital Transformation In The Wholesale Distribution Industry
The digital transformation of a wholesaler will allow a company to compete with large, multi-national competitors.
But, it requires a willingness to explore both open and closed-lab approaches that involve all employees; a readiness to embrace a fast failure mentality that focuses on the rapid testing of ideas; and a desire to leverage partnerships and successful innovators to focus and drive efforts.
If your organization is ready to think about digital transformation, apply for a free digital readiness assessment by our team of digital transformation experts.