Driving Growth for Midsize Wholesale Distributors
Recent IDC research, commissioned by SAP, revealed insights into the top priorities of midsize wholesale distribution companies as they seek to drive growth. When it comes to the role of technology and digitalization propelling differentiation…
51% say leveraging networks that connect buyers and sellers to available services is an important way to drive growth
42% say increasing market share is their top business objective
41% say innovating with new products, services, and business models is their second-highest prioritized objective
36% say they will focus on better inventory broadly and buffers specifically
62% say they haven’t started or are in the early stages of digital transformation
So, what does driving growth for midsize wholesale distributors look like in today’s increasingly digital and competitive landscape?
GROW MARKET SHARE WITH INNOVATION
To better compete, midsize wholesale distributors are driving growth by evolving from a product-centric business model to one that seamlessly combines both products and value-added services. A priority is to take advantage of networks and/or industry associations that connect buyers and sellers to available services.
Leveraging existing and emerging networks within relevant business ecosystems is the most compelling opportunity to drive growth by making it easier for existing customers to identify necessary services and by exposing new customers to the breadth of available services.
Value-added services are vital sources of revenue. While both existing and new customers are seeking recommendations and personalization to help facilitate business challenges and opportunities, the ease with which they can access these services will determine where they go for solutions. Midsize wholesale distributors must enhance their ability to leverage modern technology to ensure that all revenue opportunities are captured. This means that for 62% of companies, digital transformation efforts must be accelerated.
Supply chain disruptions are a major drag on midsize wholesale distributors, and these companies continue to look for ways to create a more resilient supply chain. To have the right inventory across large numbers of products, distributors are focused on inventory health and buffers specifically to improve overall resiliency.
BUSINESS PRIORITIES AND DIGITAL TRANSFORMATION
In highly competitive markets, the ability to build customer loyalty with more personal service (41%), better employee productivity/efficiency (39%), and customer-centric employees (35%) were identified by midsize wholesale distributors as important differentiators. Midsize wholesale distributors must identify opportunities to increase their margins. That the digital transformation journey for wholesale distribution broadly lags behind other industries is a problem. Improving demand forecasting and linking it to inventory policy and working capital means investing in better, more modern tools. The capabilities that result from advancing digital transformation remain an opportunity for many midsize wholesale distribution companies given the relatively low number that say they are mature in their transformation efforts. Investment in new capabilities will materially improve their ability to either adapt to or adopt new business models.
CRESCENSE CAN HELP
Midsize wholesale distributors have opportunities to reach new customers across marketplace ecosystems and offer more personalized services. To do this optimally and at scale, they must invest in the necessary tools for process automation, employee efficiency, and supply chain resiliency. If your midsize organization is looking for SAP guidance in the wholesale distribution space, Crescense can help. Reach out to our team today.
This insight was provided by SAP for value-added resellers like Crescense. Contact our team for more information on SAP solutions for midsized wholesale distributors today.