Like many sectors, wholesalers and distributors have been hit hard this year. The landscape in which businesses are operating has had to evolve rapidly as down-stream retail outlets have been forced to close either temporarily or permanently, and primary retail opportunities to sell reduced by lower footfall but increased demand for online services.
Five trends that are influencing this sector and the ability to return to growth next year and beyond are:
1. DTC and Online
Direct to consumer (DTC) and online B2B sales have been fast-tracked in many businesses to carve out new customers in the pursuit of growth. This does result in new challenges not seen in this space before - DTC customers buy differently, potentially greater variety in their basket, smaller order values and individual returns. A business set up with a multi-platform offering will have the greatest chance of success to service both ends of the customer profile - occasional, low volume individual customers to high volume business customers. Businesses success in embracing this trend will have a significant impact on turnover and customer acquisition.
2. A switch to self-serve
Hand in hand with the above point, there is also a switch from account managed relationships with a high cost to serve, to a self-serve offering. This is especially relevant for the lower value customers where a high service cost is not profitable. However, it is important that these self-serve customers aren’t neglected and are communicated to appropriately demonstrating both the buying stage and needs to optimise their value to your business.
3. Added value expectations
When individuals are purchasing online for their business, it is akin to a familiar online shopping environment, and with it comes the expectations as to how they are communicated with. The shopping experience is important, and testing content and language in marketing and fulfilment messages can have a significant impact on sentiment and likely return rate.
4. The Millennial takeover
Millennials are now leading in jobs where the digital expectation is much greater than historically seen in this sector, as they are choosing to engage and spend money with the brands who meet their expectations. Developing digital offerings that meet the expectations of the new decision-makers will help drive growth amongst new audiences.
5. Using technology to grow customer value
Keeping abreast of changes in technology to secure and retain customers - a lot of the tech that is spoken about tends to be inventory management. We would also advocate staying abreast of the customer management tech to put the customer at the heart of the processes which is hugely important in growing customer value.
Working with a wholesaler we observed how approaching growth with a data mindset could identify hidden opportunities not previously identified by our B2B client. Some of the learnings and why they are relevant to this sector are explained below.
Identifying macro opportunities
Quantifying the sales funnel to identify gaps and opportunities for growth enabled the wholesaler to prioritise their focus areas from filling the top of the funnel, to re-engaging lapsed customers. Understanding the numbers behind each stage of the funnel is incredibly valuable and can allow you to start looking at different scenarios e.g. if we increased investment in acquisition activity by X, the downstream impact would be Y.
Leveraging customer insight
By understanding the customer composition (firmographics, value to the business, purchase behaviours etc) the wholesaler was able to determine who needed greater support, who was likely to buy again and in which product lines to drive account managed services, personalised and relevant email campaigns and dynamic content online. This taps into the buyer’s expectations and the customer experience your brand is able to deliver.
Generating efficiencies
As mentioned above, tech focus in wholesalers tends to be on inventory management. Implementing a consolidated data landscape to provide a single and complete customer view provides the ability to query and support customers more efficiently. Implementing a combined CRM + Marketing Automation platform delivered further efficiencies as all members of the business were then drawing on one version of the truth and could ensure the best experience was delivered to the customer without hours of manual processing.
If you are looking to pursue growth and are unsure how to get the best out of the data in your business, do get in touch via www.wearemojo.co.uk for a free discovery call. We are confident that we can give you at least one idea on how to use data in your business to drive growth.