Delivering for Best-in-Class Wholesaler-Distributors
June 27, 2019  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow

In our research for NAW’s next Facing the Forces of Change® report, which will be published in November (sign up here to be notified when you can preorder it), we reveal that distributors are responding to the threat of disruption by offering more and more services to customers and suppliers. As they do so, distributors are adding new capabilities that go to creating powerful and innovative customer experiences. Gone are the days when a distributor was primarily defined by its ability to manage a warehouse of products to efficiently service demand. Rather than offering a market basket of products, distributors are offering a collection of services, for free and for fee, and redefining their purpose and brand in the process.

I was reminded of the emerging future for distributors as providers of services as I reviewed an article and recorded roundtable discussion titled, “Distribution Roundtable: Don’t Call Us Distributors Anymore” published by CRN on April 14, 2019. The article and video have essential insights for all distributors in every line of trade. It’s worth a read and a watch. Moreover, the roundtable discussion could easily serve as input for an innovation brainstorming work session following the approach recommended in a post I wrote for the NAW Blog Distributing Ideas called, 3 Steps to Help You Brainstorm for Breakthrough Innovations.

Here are three questions you can use to organize your next brainstorming work session. Each question includes context from our work for Facing the Forces of Change around “connecting the dots” between the forces of change and distributor innovations:

  1. How will your customers transform the way they work, learn and source for the digital age? Just as every distributor is working to fend off disruption, digitally transform their business and chart a course to the future, so is every customer. By working with your customers to help them redesign their business, you can build your brand as a company that is “here to help.” Virtual marketplaces are many things, but as disruptors, they do not have the tradition or inclination to do whatever it takes to partner with customers and help them to succeed.
  2. What services can you offer to help your customers transform? Innovation is about thinking wide before narrow. If you really understand the full range of opportunities and challenges faced by your customers, you can consider and design previously unimagined services to help them. Many of these services require you to change your  business model, but by doing so, you will be designing a business that is needed and valued by your customers.
  3. Can you reimagine your suppliers as customers? This question is especially important as you migrate to a business model that is all about services and has the potential to reinvent your partnerships with your suppliers. Two of my earlier blog posts dealt with this new reality for distributors: Are Suppliers Your Most Important Customers? and Why Manufacturing-as-a-Service Is an Opportunity for Distributors. The three questions above should be explored for your suppliers as well as for your traditional customers. Selling and implementing new services require that you create relationships with individuals at suppliers who have a vested interest in your services. Most channel management organizations are focused on maintaining current distributor partnerships to drive short-term sales. The bigger goal should be to build strategic relationships with supplier leaders if you are looking to drive real change.

Renaming “distribution” to something other than a term for distributors is a difficult, but perhaps necessary, task. Rebranding your business as a “provider of services” is a significant opportunity that you can start immediately.

If you decide to conduct an innovation brainstorming work session, I’d be interested to hear about your results. If you reach out to me before your work session, I’d be happy to provide other insights and ideas from my work on Facing the Forces of Change. As always, if you read this post and have different experiences or ideas, please reach out to share your takeaways with me at mark.dancer@network4channelinnovation.com.

NAW’s next Facing the Forces of Change study will be published in November. If you’d like to be among the first to preorder it, submit this form.

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Channel Innovation to drive awareness, advocacy and excellence for channel innovation, and to enable an exchange of ideas between channel leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve channel excellence across a wide range of industries in developed and emerging markets.

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