Delivering for Best-in-Class Wholesaler-Distributors
February 12, 2018  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow
Are Craft and Artisanal Channels on Your Radar?

You may be aware of the emergence of craft beer and the local craft breweries that serve up a unique customer experience. You may have noticed other craft businesses, some of which are positioned as artisanal. Examples include craft or artisanal coffee shops, bakers, distilleries, healthy food restaurants, vintage barbershops and even hardware stores. Combined, these businesses represent an emerging channel: One that offers an experience that combines craft or artisanal products and services in a space that is often meant to be a gathering place.

This new channel serves customers and its community. It offers a counterpoint to other channels that are disruptive, global and technology-driven. It’s new and it incorporates many evolving business and consumer values. Most importantly, this channel of craft and artisanal entrepreneurs has lessons for all distributors, including those that might serve them and sell to them. Others may incorporate parts of the craft way of doing business into their own business culture.

When asked, some distributors are aware of this channel and others aren’t. Almost nobody recognized it as an example of channel innovation, let alone a signpost of life and work experiences that a distributor’s own employees may seek. Many craft and artisanal businesses are founded by millennials. While many leaders ask what they can do to acknowledge millennial work styles in a distributor’s business, it may be possible to achieve even better learning by examining the entrepreneurial spirit and customer experiences that millennials foster when they create their own businesses.

Here’s how the experiences of craft and artisanal business owners may be helpful in innovating a distributor’s channel and for shaping a distributor’s business culture:

  • Community contributions. Many owners of craft and artisanal businesses seek to make a contribution to their community. Examples range from contributing their products and spaces to help charitable causes, to the belief that offering work experience in an artisanal environment gives employees important values that they can carry forward. In The Key Word for 2018 Is Community blog post, you can read about a call to reinvent your reputation for offering local service in a way that counters easy online sourcing from disruptors. Amazon can be many things, but it struggles to be a local, community-based business.
  • Work/life integration. In some cities, large and small businesses are beginning to establish offices and facilities in neighborhoods rich with craft and artisanal businesses. The immediate reason is that many employees value the product and services offered by these businesses. It may also be true that by relocating, companies hope that the culture of entrepreneurship, commitment to unique and quality products and customer experiences, and the sense of community-focused service rub off on their own employees. In Distributor Leaders: Who Do You Keep Up at Night? distributor leaders are asked whether they are stewards or entrepreneurs. This is a question that can also be asked of a distributor’s employees.
  • Innovation incubators. In response to disruption, channels like retailers and grocers are searching for customer experiences that can only be offered by humans within a brick-and-mortar space. Craft and artisanal businesses are on the cutting-edge of human-centric channel innovation and may serve as business incubators for retail and grocery channels and the distributors that would seek to serve them. Moreover, it is a characteristic of many local, community-based entrepreneurs to have a side hustle—a business or organization operated in parallel to one’s primary work. The primary ingredient of a successful craft and artisanal business is a passion for products and services, and many are started by aspiring innovators in a garage or kitchen or basement.
  • Conscious capitalism. This term is about “doing good by doing business.” In a sense, it is nothing new, since capitalism has been a powerful force for improving living standards for many years. Going further, some successful business people seek to give back near the end of their careers by donating accumulated wealth and their own effort to a worthy cause. But why wait? Craft and artisanal businesses provide examples of how commitment and creativity can make an impact now and may offer lessons for distributor leaders seeking to make a difference in new ways, and for providing opportunities for employees to do the same.
  • Economic development. While many distributors are putting up webstores that can theoretically sell to any company anywhere, much of a distributor’s business remains local. As the local economy grows, a distributor’s business grows. Distributors can “give back” to the local economy by helping other businesses grow. Craft and artisanal businesses’ main contribution to economic development is not so much about bringing in large amounts of outside cash or investment into a local community, but rather is about improving the quality of life and improving the attractiveness to companies that might open new operations. Their economic contribution is indirect, but important and worthy of support by local distributors.

In CEO Insights on Innovating the Distributor for the Digital Age, you’ll learn that distributor leaders must develop a new mindset, one that is opportunity seeking. Part of doing so is to develop a learned skill that is essential for innovation and it’s known as foresight. Foresight is the ability of innovators to tell a story about where their industry and our economy are headed. It’s a story that is interesting and engaging, and can be shared with customers, suppliers and employees. Incorporating the story of the new and emerging craft and artisanal channel into your foresight can demonstrate that you have a broad knowledge of channels and insights that go to where we are all headed as a community of workers, customers, community members and citizens. If distributors are to become masters of channel strategy and design for their own businesses, then understanding the business of the emerging craft and artisanal channel might be needed core knowledge.

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, President of Channelvation, Inc., is a channel strategist and leading authority on digital transformation. He is also an NAW Institute for Distribution Excellence Fellow. You may reach Mark at mark.dancer@channelvation.com.
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