A wake-up call for distributors

The distribution market has been disrupted by a huge new player. Specialists Greg O’Loan and Tony Corley talk to Ainsleigh Oates about being competitive in the online world.

The online auction and shopping website eBay has been around for a while, Gumtree has made its mark in Australia and scores of online retail stores pop up every day.

However, none of these entities have been able to match the high standards of a newcomer to Australia – Amazon.

Of course, Amazon was already well established in several other countries, so it was no huge shock when it finally arrived, but it has caused some commotion.

Large international distributors with the potential for market disruption make local distributors nervous. Competing with such established companies is no mean feat, but there are ways of easing the transition.

Distribution technology specialists Greg O’Loan and Tony Corley of Epicor Software say that staying ahead of the game is a matter of being prepared for change and open to its possibilities.

“Distributors need to understand that change happens and they already have the tools for scaling up the business,” Greg says.

“It’s a matter of using those tools to the best of their ability.”

Distributors are generally low-margin businesses, which means they must operate efficiently or very quickly lose money.

“Automation, digital technology, mobility – these things are real and available for distributors to adopt. They are no longer ‘cutting edge’ but a lot more mainstream.

“To stay ahead of the competition distributors must be ready. If they’re not, change happens around them and they’re not aware of it.

“It’s a big risk to the business that someone can and will service the customers better. If people have their minds open then the risk can be realised and avoided relatively quickly.”

Tony says it all comes down to the customer experience. If the business can provide customers with what they need in addition to what they want, it will build a strong relationship and they will keep coming back.

“People think of Amazon as just online shopping, but it’s really more than that,” he says.

“What Amazon has done is a really good job of understanding its customers and improving the customer experience.

“Other distributors need to look at what Amazon has done in the past, because many distributors have been competing with it unknowingly. So it’s good to look at this large organisation and understand what it has done right so they can improve their game.”

Greg and Tony agree that to compete at the same level as Amazon, distributors should be ready to do whatever it takes.

Amazon includes features such as Prime, a paid subscription service that offers access to services that would otherwise be unavailable, or would cost extra. It includes free two-day delivery (one-day in some areas), rapid delivery for a fee through Prime Now, streaming music and video, and other benefits.

These features are readily available for any distribution business, but many operators don’t know how to go about it.

“At Epicor we provide a range of distribution solutions to fit every need,” Tony says.

“The core three words around our Prophet 21 distribution software are fit, ease and growth.

“Our product is fit for purpose for wholesale distributors. We make sure that everything we do is easy for our customers, so we use the term ‘ease of everything’ which could be how you implement or how you train.

“We’ve adjusted all our training content to be short videos, so when customers need specific information they don’t have to wade through a long training session.

“And growth refers to the value in wholesale distributors adopting the software. They’re not going to do it for its own sake. There has to be a benefit to their business, there has to be foreseeable growth.”

The aim of Prophet 21 is to keep distributors healthy and thriving, even as the competition heats up. It does this through:

  • customer relationship management;
  • e-commerce solutions;
  • enterprise content management;
  • business intelligence and analytics;
  • sales management;
  • supply chain management; and
  • service and maintenance.

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Reference: Connected Home