Innovation Tips Distribution Leaders | Innovation Tips | OH IN KY
Fellow and author for the National Association of Wholesale-Distributors and CEO of the Network for Business Innovation, Mark Dancer, recently led a thought-provoking webinar for regional distribution industry leaders where he gave his perspective on why innovation is critical for distributors today – and for success tomorrow and beyond.
Dancer’s insights and poll question results can be distilled to 18 distinct tips that can guide you on your innovation journey in this fast-changing industry.
Distribution Industry Tip #1
71% of webinar attendees said that innovation/digital transformation at their company is a top priority, but not the most important, while 12% said it was the most important priority.
Distribution Industry Tip #2
Most distributor innovations during the pandemic were implemented to keep customers operating without disruption.
Distribution Industry Tip #3
Implementing best practices is simply catching up. True innovation requires leapfrogging ahead – or fundamental changes to the business model.
Distribution Industry Tip #4
Elements of the Business Model: Innovation requires a business model change in one or more of these elements (elements from Strategyzer)
Dancer adds another element to this list: customer experience.
Distribution Industry Tip #5
Here’s how distributors are innovating:
Distribution Industry Tip #6
A key theme for innovation in distribution: Transforming the concept of distribution from “products in the warehouse” to “customer experience in the real world.”
Distribution Industry Tip #7
The path to innovation can be summarized in these four steps:
Distribution Industry Tip #8
Customer relationship management (CRM) = change management (it’s not just flipping the switch on new software). Document your sales process before implementing CRM.
Distribution Industry Tip #9
During the session, an attendee asked: “should distributors sell direct to consumers via e-commerce?”
According to Dancer, there isn’t just one answer to this question, and he suggests the following considerations:
If the answer to that last question is yes, then selling directly to the customer’s customer will likely strengthen the relationship with the distributor’s customer.
E-commerce could strengthen customer relationships if you solve your customer’s customers’ problems.
Distribution Industry Tip #10
An audience poll asked about plans or progress for innovating or digitally transforming their business. 70% responded that they were either actively driving business innovation/digital transformation or that they must modernize to do business with next-generation customers.
Distribution Industry Tip #11
Key innovation concepts to keep in mind:
Distribution Industry Tip #12
Another attendee poll question asked what participants see as their greatest advantage for innovating or digitally transforming their business. Responses were fairly evenly split between:
Distribution Industry Tip #13
A great resource for a closer look? Mini e-book “Distribution Leans In,” summarizing Mark Dancer’s February 2021 interviews with distributors. It’s available here from the National Association of Wholesalers.
Here are some COVID-related changes distributors reported making:
Distribution Industry Tip #14
Looking for real-world examples? Here are a few from “Distribution Leans In.”
Distribution Industry Tip #15
Another poll question asked distributors what their most significant barrier to innovation is. The top responses? People/culture and digital capabilities. Note: cashflow wasn’t one of the options, but Mark noted it can also be a significant barrier.
Distribution Industry Tip #16
How to increase customer focus? Visit them. Ask customers what changes they’ve implemented since the start of the pandemic. This provides intel and allows the distributor to determine how to respond to changes customers have made and their impact on the distributor.
Distribution Industry Tip #17
When asked via poll what innovations are underway now or soon will be at their company, attendees’ top three answers were:
Distribution Industry Tip #18
Distributors reported that the most important support they need to innovate and/or digitally transform their business are:
In Summary
The ideas, insights, and observations Mark Dancer shared provide distributors with an expert’s perspective on why innovation is critical in the industry today – and what it means for tomorrow’s success. Ideas are a place to start to build an innovation plan that works with the specific factors of each segment of the distribution landscape. Ultimately, the execution of the plan will determine which companies will lead in the decades ahead.
Get your distribution business on the right track
Have a question about sparking innovation for your distribution business or what the financial impact could be? Get in touch with one of our distribution industry pros. You can also watch Mark Dancer’s presentation on-demand and download the slides.