Relentless focus on customer needs has never been so important, and the channels through which distributors and wholesalers access, market to, and covert these customers have proliferated. It is a trend that increased at pace through the pandemic and one which appears to be here to stay.
In this piece Georgia Hartley-Brewer highlights why distribution and wholesale businesses are moving to utilise retail talent to create competitive advantage.
With an emergence of multichannel access points comes a need for price transparency, and arguably, price equity. It requires seamless integration into the category and buying processes; it opens the low-cost option of supplier APIs, and it makes any catalogue channel the seasonal stalwart for many distributors. Clunky at best, and commercially fraught with risk at worst.
However, the deep, often exclusive customer relationships nurtured by B2B specialist distributors are very different to those that are fostered on the high street or in our retail parks. Specialist product knowledge needs dispensing through depots and trade counters, perhaps making the digital channel a nice-to-have shop window that opens the B2C opportunity and facilitates a handful of marketing emails. Would a business want retail-based digital expertise to deliver such a low priority project?
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Specialist services
It turns out, yes, they do. Not because distributors are hiring the wrong skills, but because retail experts supporting big ticket item sales (such as furnishings and sports kit) understand the power of optimising multichannel in an assisted selling environment. For a bathroom retailer that might be visualising your new suite on your laptop screen; for a carpet retailer it might be ordering swatches; for a golf retailer it might be booking a fitting. Regardless, the website isn’t just a direct selling channel, nor is it just a shop window either. It is a digital gateway to the full product assortment, to specialist advice, and to moving one stage along the customer journey. Creating a digital gateway requires experience in technology implementation and in digitising customer services. The latter admittedly can come from the Consumer Banking industry, but the parallels between retail and distribution are more plentiful, as distributors and wholesalers are realising.
Product & Buying
Another area garnering interest from distribution organisations is product and buying. Some of these businesses with north of 100,000 SKUs, have little clarity on category strategy, assortment planning, own brand or better buying. Add the current economic climate, and these merchants are facing a real need to diversify their product offering. Again, something that is business as usual for retailers.
Sam Tyrer, Chief Executive Officer at DD Group, agrees how valuable retail expertise is in areas such as product and buying strategies, supply chain optimisation and even in M&A. Stating, “Retail interims bring insight into optimising multichannel strategies, and enhancing customer experience, ultimately driving financial impact though improved gross margins, profit and efficiency gains in inventory and distribution. As the digital landscape continues to evolve, the demand for retail skill sets in distribution and wholesale remains high – presenting exciting opportunities for collaboration and innovation across sectors.”
Supply Chain & Net Profit
More c-suite are looking for Retail Interims to deliver quick wins of enormous financial impact, on gross margin and on profit thanks to the downstream impacts on inventory and distribution costs.
Supply chain, demand planning and inventory are all specialism many retailers have mastered well. Some Interims have come up through a combination of merchandising roles and supply chain/demand planning positions, making them uniquely aware of the benefits of a transformation project on every function it touched. One in particular, explains how it made her more able to “sell it” by collaborating with her stakeholders.
Mergers & Acquisitions
The number of M&A deals in the UK targeting retailers has risen by 30% since before the pandemic. Companies that manage to sustain good cash flow through a downturn, like the one that emerged in late 2022, can acquire competitors that aren’t able to stay afloat. With challenging commercial conditions across distribution and wholesale, and with private equity sitting on a lot of dry powder, interim retail expertise in M&A, be that an HRD, or a Programme Director, could be hugely helpful in the Boardroom.
Discover more about our Interim Management Services, or if you’d like to speak to one of our consultants, please contact us.