How Distributors Can Ride the Wave of Change

According to David Houle, author of The Shift Age, the past couple of decades have pushed us ever faster into what he calls the “Shift Age,” in which change seems to be happening at an increasingly rapid pace. “We feel it every day,” Houle said. It feels like the ground is moving under our feet.

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Houle spoke this week at the National Association of Wholesaler-Distributors’ 2012 Executive Summit in Washington D.C. Houle said everything has moved faster since the mid-1980s, the meaning of “network” has shifted, there has been an explosion of choice with the consumer gaining greater control, and the West has met the East, with the expansion of capitalism globally.

Here’s a summary of his key points and how distributors can react to the change that is going on all around us:

• The rise of social media is growing as a tool to communicate, network and market. Houle made a good point on whether you should consider a more formal strategy to incorporate social media in your business plan: “If you ever got business from word of mouth, all social media is is word of mouth in a virtual reality. If you care about word of mouth, care about social media.”
• Cell phone usage is the new normal – the number of users has grown at an increasingly fast pace over the past decade – faster than most people expected. This was an example of how connected we are, all the time. (Listen to John Sonnhalter’s take on the role of mobile in marketing in MDM’s latest Executive Briefing.)
• More options exist for companies of all sizes to invest in technology. When faced with a new technology, ask yourself: “What is behind this new technology that will give you more power as a business executive?” Houle said.
• More and more, the consumer or end-user can buy products in different ways. He used the term disintermediation – a scary term for distributors, Houle said, but you are at greatest risk if all you are doing in the channel is marking up the cost of the product and passing it onto the end-user. Because of all the choices consumers now have, the idea that distributors have to add value to stay relevant and to gain share in the long run is more important than ever.
• As technology advances, people can connect more frequently in more ways than ever with your company. The interesting thing about this? As technology advances, people desire what he called “high touch” – when you do interact with your customer in person, that time becomes even more valuable than it used to be.

The bottom line: Distributors need to adapt. A recommendation from Houle: Don’t define your business by how you’ve always done things – an example he provided was construction firms that adapted to the changing environment by diversifying their end-markets rather than give in to the poor economy.  View your company as a net: Continue to hold onto your values and structure, but have the flexibility to adapt to unexpected changes in your markets or shifts in your organization.