Posted November 29, 2017

Distributors risk losing sales to online competitors

A new white paper from Digital Channel Advisors suggests that distributors may need to revamp their existing business model or risk losing sales to online competitors.

The white paper, authored by consultants Scott Benfield, Steve Griffith, Skip Martin and George Yezbak, suggests that distributors have begun to lose sales online to more nimble competitors with business models more conducive to e-commerce.

The research-based paper suggests that despite perceived differences between retail sales and wholesale distribution, distributors will continue to see online sales erode much the way retailers such as Sears, J.C. Penney and others have lost sales to Amazon and other online sellers.

"To survive, and thrive, full-service wholesalers will need to realize that e-commerce is more than a means of laundering a transaction. It is a fundamental change in the way the firm goes to market and it changes the cost structure of the business by reducing redundant brick and mortar and sales support," the authors write.

The paper offers examples of distribution firms with successful online efforts and presents an outline for managing a major business transformation.

"Current research finds that the industry is losing the online battle. Like the department store, full-service distribution is struggling to find its online mojo. Time will tell if industry leaders adapt or suffer the fate of their retail counterparts," the paper concludes.

Click to read an executive summary of the white paper.

Click to download the complete white paper.