5 Trends in the Wholesale Sector in 2021

The wholesale distribution sector has had to grapple with a lot of questions in the last five years. How do wholesalers stand out amidst greater competition? How do they maintain profitability in a high volume yet thin margin sector? How do they meet the rapidly changing demands of their customers? 

The prolonged disruption to the supply chain in 2020 forced wholesalers to adapt and innovate. But it has also accelerated the need for technical solutions to these sector-wide problems. 

2021 is expected to bring even more challenges. In order for wholesalers to meet these challenges, what disruptive trends should they look for, and seek to take advantage of?

Brexit

The regulatory impact of Brexit will set the roadmap for wholesalers in 2021. With the agreement of a trade deal, distributors will need to adapt in order to comply with any new rules that might impact supply, logistics and more, as well as staying on top of costs incurred.  For instance, there will be new factors to consider: 

  • Imports and exports to and from the UK require formal transaction declarations and documentation,
  • There will be labelling certifications,
  • Import tax and tariffs in trade with EU countries,
  • and of course more sector specific standards, such as food and drink standards. 

Because of wholesale distribution’s traditionally thin margins, wholesalers can not afford uncertainty in the supply chain. Now, with the regulatory demands of Brexit, effective democratisation of critical business information, such as transactions, traceability, taxes, and task management will be vital to success in this industry in 2021. A digital solution that standardised this information, and that integrates supply, finance, logistics, and labour will be crucial to smooth operations and maintaining a competitive advantage.


Hybridisation

Wholesalers are adapting to an increasingly competitive market. In recent years, incursions by large players such as Amazon in the B2B space and their ability to leverage their digital expertise and faster to-market advantage over traditional wholesalers has driven distributors to widen their services. 

We can expect this trend to continue. The need for reliability, speed, personalisation, low prices has put immense pressure on wholesalers. As such, we’ve seen various diversification efforts, including new routes to market, new services, and complete evolution of business models. We expect the lines between manufacturing, retail, and traditional wholesale continue to narrow in 2021. 

The hybridisation of these fundamentally different business functions necessitates greater connectivity and communication across the organisation. Accordingly, we will see more and more turn to technical solutions in order to achieve this. 


A Consumer-based Approach


Hybridisation over the course of 2020 drove more and more wholesalers to leverage eCommerce and embrace a direct-to-consumer approach. As well as this, continuing shifts in consumer engagement and the exponential growth of technology usage: mobile apps, social media, cloud technology, have driven customer expectations to all time high, which wholesalers continue to adapt to. 

Distributors are increasingly focused on delivering a service that prioritises user-centric convenience. Omnichannel marketing (which means to provide to the customer a seamless, flexible, and integrated buyer journey) will become pivotal as more traditional methods of marketing become obsolete overtime. 

Ecommerce continues to reshape the entire economic model of retail and wholesale. Wholesalers are offering more and more services to differentiate themselves, including technical services, warranty services, new rich features and functionalities, all of which are in turn being enabled by the digitisation of business. 

Digital solutions are also driving major improvements to CRM, Sales Management platforms, and more facilitate multi-channel sales, leading to improved revenues from improved customer satisfaction, cost effectively serving multiple customers, and offering value-added services.

Automation


Wholesalers are increasingly recognising the importance of Enterprise Resource Planning systems that are not only integrating their core business functions, but also maximising efficiency across their processes.

For instance, Operational Procurement is made easier by the automation of end-to-end procurement processes that extend to the entire business ecosystem, including partners, suppliers, and customers.  For other key priorities for wholesalers, such as: 

  • quotes to cash, administrative costs are reduced by automating transactional processes,
  • warehouse management, times to-market are reduced thanks to improved shipping accuracy, and increased productivity, less paperwork.
  • finance, reconciliation capabilities are centralised, data accuracy is improved, offline processes are removed, avoiding the potential for errors.

Overall, wholesalers are innovating, driving more productive work, improving logistics, resource recruiting and retention, process automation, and removing redundant process steps. 


The Growth of Business Intelligence 

In addition to automation, wholesalers are leveraging predictive business intelligence and analytics to optimise their business processes, and acting on recommendations by these technological solutions. Leading analytics platforms are enabling wholesale distribution, by democratising insights across organisations, allowing wholesalers insights on data from anywhere within a business. 

In Procurement, distributors are taking advantage of special buying and load-building opportunities by applying analytics to purchasing decisions, reducing costs of goods sold, and increasing buyer productivity and enabling informed decisions. 

Predictive analytics empower finance by giving unique enterprise insights on financial planning and budgeting, accounts receivable and more. 

In supply chain management, Business Intelligence also gives detailed forecasts by leveraging demand sensing and advanced statistical methods, advancing supply chain planning, and inventory management. Reporting becomes a cinch, and acting on the immediate and long-term needs of the sector becomes all the more easier, unlocking the true potential of the organisation..


Final Thoughts

The challenges facing wholesale distribution are at their core, the same as they’ve always been. Staying competitive, improving time-to-market,  raising profitability, contending with thin margins and answering consumer demands remain fundamental goals for the sector. However the solutions and models continue to change and develop according to regulatory changes, consumer tastes, and perhaps most crucially, technology. 

There’s no question that digitalisation will continue to drive innovation in the sector, but with so many solutions available today, what is the best for your organisation? 

The best technological solution is time and cost-effective, with short implementation times. Clarivos’s Insight for Wholesale Distribution is an out-of-the-box solution that offers not only all the benefits of enterprise resource planning, but also business intelligence capabilities. And, it’s ready for wholesalers, no matter the sector, to get value from and to navigate the complex and competitive road ahead in 2021.