2020 is here, and we’re still hearing some rumbling of an economic slowdown. Some might consider holding back on new investments until the economic future is more certain. And yet, thriving amid disruption is a differentiator in today’s market. Put another way: Disruption creates opportunity.
Lots of distribution companies will pull back into their shells as the economy begins to change, but this only encourages them to become acquisition targets. And the companies that are truly playing the game are often reluctant to share their game plans for fear of leaking their competitive advantage.
Let’s take a different tact: Let’s create some visibility around what’s working for distributors to address economic shifts. Distributors need to do different things entirely — not just do the same things differently.
Much of this approach can be classified into three categories: technology, talent and tenacity. In a recent webcast, MDM Editor Tom Gale and I discussed these themes and how distributors can put new ways of thinking into play this year.
The Rise of Technology
Today, distributors have access to more data than ever. They can analyze it more readily and make adjustments more efficiently. ERP software is much more plug and play, allowing distributors to customize their systems and put in place what they need. And this new technology isn’t just for the biggest players. Small, innovative companies are getting in on the game, too.
The digital transformation is happening. Machine leaning and AI are becoming a part of our day to day. The rise of new technology has resulted in a far more connected global network. And yet, distributors are learning that success is about much more than just selling on the web. Especially in B2B, field salespeople – and that human touch – are still important. But think strategically about how you can meet your customers where they are.
The Importance of Talent
When it comes to the human element, pay attention to workforce shifts taking place. From 1994 to 2017, the percentage of baby boomers in the workplace fell from 50% to 25%. Millennials, on the other hand, now represent 35% of the workforce. This tells us that buyer needs are changing. Buyers are much younger, and they are fluent in modern technology.
Small, cross-functional, flexible teams within an organization can often adapt more quickly than traditional business hierarchies. This is one way innovation can take place with distribution talent. Allow people to experiment, to collaborate – and to fail. It all starts with leadership.
The Value of Tenacity
An economic slowdown is no time to withdraw. Rather, it’s time for strategic action, perseverance and smart planning.
When the market starts to soften, strategically reduce inventory and consider a temporary reduction in hiring. Make sure to keep listening to customers’ needs, and determine how you can continue driving customer engagement. You might make strategic use of both talent and technology by creating engaging training videos around your products, and identify new ways to reach customers through an omni-channel approach. Focusing on your value proposition and service differentiators will keep those customer relationships strong.
This year, don’t sit around and worry that market is getting softer. Strong performance takes ability and willingness. Embrace technology, and maximize your workforce talent. There’s a lot of opportunity in 2020, if you’re willing to go after it.