Success in the distribution business is dependent on few core factors like ensuring increased market coverage, targeted promotion, right market information, offering advantageous financials, and many more. As distributors are known as value-added resellers, it’s important to understand - What pandemic has brought for distributors to thrive in new normal?
There are huge changes observed in the way consumers behaved during the onset of Covid-19, they stocked up the products as they bought whatever was available. The brand was not at all a choice, and the retailer’s mantra of providing the ‘right product to the right consumer at right time’ shifted to ‘making goods available’. And because of the same, businesses struggled a lot in resolving the unique challenges faced by distributors and markets during the unprecedented times.
Amid pandemic, businesses have experienced irregular demand for their products. On one hand, there is an explosion in demand for safety products, entertainment, delivery apps, canned food, made the distributors struggle to meet customers’ demands, and on the other hand, there is a decrease in demand for certain categories because of government guidelines, which made businesses alter their models or work in partnerships.
Distributors have not only survived but thrived during the pandemic. Various timely actions have given important lessons like, to survive in such crucial time ‘adaptability’ is the key, understand the humanitarian crisis before acting, it’s important to take care of each other, provide uninterrupted services, making each employee strong will make the business strong.
Distributors have made customer acquisition simpler for businesses by the simple mantra ‘goods are available as per customer’s need’. Though, where a pandemic has given a setback to many sectors, opened up opportunities for many too like food tech, health tech, OTT, fintech, and many more. There is a growth seen in Indian startups of $9.4 billion across 881 deals from around 1,476 active investors in the ecosystem and they are acting as the promoter in reviving the country’s economy at this time.
Many Indian startups have made their way in this crisis by delivering the best services to their customers, like Meatigo, IndiaLends, Shiprocket, Talentedge, FreshToHome, and more.
Amar Nagaram, CEO, Myntra also expressed the importance of being ‘people-centric’ be it your employees, customers, or eco-system.
Identifying Pillars of Strength
The last year has taught one thing to all businesses that it’s time to evaluate the challenges faced and find out the best practices to be followed, to achieve healthy recovery growth.
When the majority of customers shifted to online purchases or were completely dependent upon neighborhood stores, distributors were able to manage their supply to avoid critical shortages even during supply disruption too. The inventory was managed during these unstable times, keeping current and future inventory differences in mind. It’s not only the retailers who shifted their businesses to online and have made themselves accustomed to technology. Distributors have also monitored their performance in terms of managing customers, products, and their market segments.
Beyond technology, personal engagement by distributors in understanding customer needs and making salesforce effective to meet the changing projections made the Retail industry live.
Ashish Jhina, Jumbotail also mentioned, “Data is the key to manage the supply to small stores and to figure out how the entire ecosystem is ordering digitally. This helps us work better with brands to supply the right product. The government has done a great job in ensuring that supplies continue. It is going to open up production from smaller brands in phases.”
To maintain the relationship with all stakeholders, social collaboration tools are helping businesses transforming supply chain models. Communities like Avalability+ or 2 Degrees are facilitating communication and knowledge sharing in managing the supply chain with the social supply chain management model.
Here Lies the Future
Disciplined long-term planning has always made businesses perform better. Many changes like megamergers, reducing suppliers within a specific supply market, online commerce, companies joining hands with the distribution market have already brought huge challenges. And in 2020, the turbulence brought by the pandemic has made the distributors rework their supply chain systems to reimagine the future of retail.
Raj Saxena, Founder, LogisticsNow expressed his views like, “The industry needs to get brands, warehouse companies, small stores, and e-commerce companies to share a common platform to build this logistics stack”.
IBEF added that the actual worry is not the market opportunity worth $160 billion, it is how to collate the real-time data on consumption to sail through such disruptions in the future too.
It has become important to accumulate, analyze and blend the data through a centrally located real-time information center to understand the buying patterns and behavior of the customer. This system will not only help in optimizing the cost spend on all segments but will also ensure stability after the crisis will end. Looking at the changes in the demand pattern, distributors have to ensure the availability of the right inventory through enabling digital systems.
Amazon is one such leading company that is earning benefits from investing in digital channels. Amazon has treasure troves of transaction data which helps in anticipating customer needs and making distributors achieve higher value by aligning offers with customer willingness to pay.
As today’s customer is looking forward to a seamless omnichannel experience, digital self-service will be able to provide better customer insight. Thus, in this new retail, distributors have to ensure the dynamic data, go-to-market model and take advantage of inside and outside selling teams to adapt the sales process.