Wholesale & Distribution
Assessment of Digital Maturity

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Synopsis

Of all the industry sectors Wholesale and Distribution are probably the most threatened by ecommerce. Manufacturers are beginning to sell directly to consumers or sell through mass market platforms such as Amazon or directly to retailers. The geographical territory of the wholesaler or distributor is increasingly becoming less relevant and the realm of the commission salesperson, the so called “middleman”, except for some specialized industries such as pharmaceuticals, is threatened to its very core. Although the jury is still out, the change to ecommerce is seen by some to be both a threat and an opportunity. Enter Digital Transformation.

For the Wholesale and Distribution industry, the digital transformative emphasis seems to have been, and so promoted by vendors in some cases, on technology and operational matters with too little a focus on commercial strategy and the needed digital reinvention of customer engagement. In the meanwhile, according to Forrester, a market research company, almost 40% of B2B buyers are now finishing their purchases on Amazon. The percentage of B2B buyers finishing their purchases on distributor sites has fallen from 30% in 2015 to 16% in 2017. Buyers prefer sites like Amazon that are easy to use, fast, with broad selection, limited login requirements, and built-in trust. Amazon is part-platform, part-marketplace, and part-reseller. By various estimates, Amazon currently sells one-third via digital e-commerce sales, one-third via reselling/white labeling, and one-third via third-party resellers.

That the B2B wholesalers and distributors are under threat is not in doubt. For example. In wiring connectors, Amazon Business has 77,764 listings compared to a Big-4 distributor’s 2,855. Amazon has products listed from 106 of the 120 manufacturers offered by a Big- 4 distributor. Even worse for distributors, 96 of these 120 distributors, or 80%, already sell directly on Amazon and prices on Amazon are often 25 to 30% less. Between Alibaba and Amazon Business there seems to remain very little space for survival. Compared to this existential threat, the degree and pace of any appropriate or commensurate digital response (Maturity), being mounted by the Wholesale & Disgtribution industry, can only be assessed to be on the low side and of the order of 10-15%.

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Digital Transformation Case Studies in Agribusiness compiled from publicly available sources
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Digital Transformation in Wholesale & Distribution - CASE STUDIES

How YIELD, an Australian company increases yields with Sensors and Analytics!

YieldThe Yield is an Australian agricultural technology company on a mission to transform food and farming practices by building secure, scalable digital technology to sense, analyse and predict on-farm growing conditions, and then deliver information in a usable format to help increase yield, reduce waste, mitigate the risk and cost associated with soil and weather and inputs. Partnering with Microsoft (Azure) and Bosch, Yield has received several innovation awards from Government and International organizations. Learn More..

Tire Company Transforms its Value Proposition from a Product only to a Product and a Service.
Toy Company digitally transforms its business model from toys to education, entertainment and technology incubator

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