A shift in strategy
The commonly held belief is that industrial companies lag behind their B2C counterparts in digital capabilities, despite their customers still having the same expectations.
But the latest findings from Epicor’s Annual Insights Survey firmly lay this misconception to bed and demonstrate that businesses of all sizes are competing in new ways, and the good news is, it's working.
The seismic shifts of the past two years have turned industries upside down, and businesses of all sizes are adopting innovative supply chains, moving into previously inaccessible markets, and competing in new ways. This wave of change is ushering in a newfound confidence and a priority of business growth. 56% of all survey respondents are prioritizing growth – and the outlook is most optimistic for distributors, 63%, and retailers, 59%.
The pandemic has had a strong influence on recent large company evolution, and SMBs rose to the challenge as well; a staggering three quarters (78%) of those surveyed – exclusively across manufacturing, distribution, building supply, automotive and retail industries – shared that they changed their core business models over the last year to better compete. 44% shared they added new strategies:
• Direct-to-customer sales and delivery (47%)
• E-commerce via online ordering (40%)
• Configure-Price-Quote solutions (39%)
But the story of disruption is not all about what they added, but also rationalization and streamlining of business initiatives, with 34% citing that they evaluated their approach and pulled back on certain strategies. As a result of all this change, 85% boasted that they saw growth by diversifying their offerings.
The rise of ‘distro-facturing’
Given the choice of in-person, remote, and e-commerce channels, purchasers show they want them all. Over half (56%) of distributors in the survey shared they began offering direct-to-customer-sales, signifying the emergence of a new breed of hybrid businesses that are being dubbed ‘distro-facturers.’
Naturally, digital transformation has been cited as critical for diversifying services. 86% claim they changed their technologies to adjust for their expanded capabilities. Specifically, 85% chose to diversify their supply chain, and 84% diversified to ecommerce. As a results, the majority (54%) are confident their business is on the right path and almost all respondents (95%) believe the right-fit technology will accelerate growth. This means technology solution providers must be ready to adapt to these expanding needs and offer businesses tailor-made solutions to meet them - a statement that is supported by the report’s findings: while 95% cited right-fit technology will accelerate growth, 92% want to partner with providers who have ‘specialist industry knowledge.’
The survey data underscores that businesses do not intend to stand still. Midsize companies who are looking to compete are consistently evaluating their business strategies, adjusting them to expand their offerings and leaning into highly flexible cloud-based technologies to drive agility and performance. While it may be tempting to act rapidly out of fear of being left behind, careful planning, the right integration partner and a solid implementation strategy will carry the day.
Survey Methodology
PSB conducted an online survey among 1,350 IT decision-makers in the U.S., U.K., Australia, and New Zealand, all operating exclusively in the manufacturing, distribution, building supply, automotive and retail industries The interviews were conducted in English from April 1 to 22, 2022. The margin of error for the total sample is +/-2.76 ppts, and larger for sub-groups.
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Joyce Lansdale and Vallen. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and David Kahle, as well as interviews with numerous product and distribution industry experts.
