Competition is fierce for distributors. However, embracing the experiential economy might be just what they need to remain competitive.
August 5, 2019
By: Kerrie Jordan, director of product management, cloud at Epicor
All distributors are experiencing competitive pressure. The biggest and most disruptive driver of this are often online marketplaces that continue to push the bounds of the “experiential economy,” evolving the act of shopping itself into a commodity for shoppers. A recent report by NPR and Marist found that 44% of consumers now start their online shopping journey on Amazon. Not only has the “experiential economy” shifted consumer expectations with the purchasing process and the expectations they have about delivery services, but buyers now expect to be able to view their packages at every stage in the distribution process, from collection in the warehouse to delivery at their doorstep.
The “experiential economy” has put even more pressure on distributors, to create a seamless experience from order to delivery. This pushes distributors, particularly those that are mid-tier, to stay ahead of the competitive curve while maintaining margins. Distribution organizations have the power to take a stand and hold onto their share of the market, if not grow it, while enhancing customer experiences.
How can distributors embrace the “experiential economy” to meet consumer expectations and remain competitive? One of the best ways to keep up with competition and remain relevant in today’s digitized world is to move legacy ERP solutions to the cloud or adopt cloud-based ERP solutions because of their inherent flexibility and readiness for innovation. Here are three recommendations for distributors looking to leverage cloud-based ERP solutions to provide optimal service and enhance revenue in today’s rapidly evolving marketplace.
Employing the latest and greatest ERP technology, without disruption
Moving to a cloud-based ERP solution or selecting a cloud-based ERP partner enables distributors to easily access valuable data to help track inventory, monitor warehouses and map global supply chains at any point in time, from anywhere. This also means access to the latest technology and solutions.
The “experiential economy” is constantly changing as new technologies spark new experiences. Artificial intelligence is now used to simplify interactions with an ERP system and reduce lead time. Nimble distributors are leveraging an integrated cloud-based eCommerce website to challenge industry competitors. Partnering with a cloud-based ERP vendor provides distributors with a platform to quickly evaluate and maximize the business value of such innovations, instead of spending resources managing the complex technology behind them.
LH Industrial Supplies recently made the move to the cloud and saw immediate benefits. Its president, Kregg Cheek, said moving to the cloud has minimized the “cost and burden of maintaining servers and allows us to fully focus on the business.” They have access to their ERP system from any location, which makes it easier for employees and enables productivity.
Diving further into the business values realized with cloud-based solutions, moving to the cloud enables distributors to quickly upgrade their ERP systems, without the need for operational downtime that comes with other legacy counterparts. This allows for easy upgrades and system add-ons as the business evolves and expands, such as increasing IoT connectivity and employing virtual agents. Adopting a cloud-based solution also enables distributors to easily turn system features on and off without disrupting the business, as new Industry 4.0 initiatives are tested and deployed by minimizing the time and man-power needed to install the upgrades or updates.
Understand your customers’ needs
Industry 4.0 is changing the way organizations do business, by enabling real-time insights and agile business decisions. This trend toward digitization, along with the “experiential economy”, is triggering a fundamental shift for businesses around the globe, regardless of size and scope.
Distributors must identify the specialized services customers need for their own Industry 4.0 initiatives and empower those customers by offering those services. Take, for example, a customer looking to implement a technology-enabled, friction-free supply reordering experience for their end user. By empowering distribution customers with cloud-based ERP, those customers can enhance end users’ productivity while minimizing friction between the order placement and the distribution processes by connecting devices and data systems directly in the cloud.
By understanding what customers are looking for and need, distributors can invest in solutions that will yield the highest return-on-investment for themselves and their clients, without investing in technology simply for technology’s sake. This understanding of customer needs enables the “experiential economy” with delivery that’s fast and convenient and on their terms; visibility throughout the supply chain with tracking; self-service capability to order, cancel and pay; and product comparisons and reviews – resulting in a seamless, convenient and pleasant process for customers.
Think safety and security first
Beyond hardhats on the warehouse floor, safety for distributors is a must and includes their data and the systems leveraging that data. Consumer data is often targeted by hackers or malicious agents and one breach can seriously impact a business’s reputation, as well as its bottom line. Plus, there can also be legal consequences if data is exposed due to human error with the advent of GDPR and the California Consumer Privacy Act.
Cloud-enabled ERP solutions help mitigate these threats by enabling regular testing and verification of the solution, network and those accessing it. Distributors must protect their data – as well as the data of those who use their services. This means distributors must look to trusted cloud providers to host their systems and data.
Beyond safety of data, in the event of a natural disaster near a warehouse or along a distribution route, cloud-enabled solutions allow distributors to easily access their data and systems, away from the impacted area. This allows them to appropriately reroute orders and update customers of changes immediately.
Competition is fierce across the distribution sector. However, distributors can enhance their services and the security around them, positively impact their bottom lines, and remain nimble to stay competitive by leveraging cloud-based ERP solutions, while delivering on consumer expectations.
About Kerrie Jordan:
Kerrie Jordan is the Director of Cloud Product Management and Product Marketing at Epicor Software. An accomplished product strategist and marketing professional, Jordan provides deep experience in Software as a Service (SaaS), Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Product Lifecycle Management (PLM) and eCommerce business software solutions in her role at Epicor.