How Can COVID-19 Change Distribution for the Better?

Future-focused distributors are embracing the market upheaval brought on by the coronavirus to strengthen their brands, step up communication with customers and suppliers and put themselves in a position of strength to thrive in the coming post-pandemic economy. Consultant Mark Dancer during Fridays MDM Live webcast shared several ways distributors can show leadership now.
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Now past the initial shock of the coronavirus shutdown, distributors are quickly pivoting to make the most out of today’s business environment. A recurring theme during Friday’s MDM Live webcast was that distributors are in the position to lead both customers and suppliers to the new normal.

Mark Dancer, NAW Fellow and founder of the Network for Business Innovation, shared several ways to be forward-looking in this environment.

  • Innovation is not possible without foresight. Lead by sharing your version of the new normal in conversations with customers and suppliers.  “We have to make sure, as we’re working on surviving and moving our businesses forward, that we make time for conversations,” said Dancer, adding that social media is a natural conduit for this type of conversation. “In a crisis, over-communication is essential.”
  • In any crisis, initial reports are never accurate. Look around the corner to find the practices that will take hold. But avoid group think in the process, Dancer cautioned. Consider:
    • Online ordering versus augmented reality. Can we replace human efforts and connect human collaborations? Be intentional about how you direct your sales team. “How can I create new human interactions as things migrate digitally?” he said. Find more higher value-add activities to focus on for these efforts.
    • Work at home versus work among partners. Lower costs, offer convenience to employees and create spontaneous solutions. Consider, when on-location work returns, asking to “borrow a desk for a day” at the customer and/or supplier location, Dancer said. “It gives you a chance to be involved in the informal, spontaneous conversations and social interactions,” he added.
    • Strong getting stronger versus blindsided by gamechangers. Success is a trap. Customers can shift on a dime. “Find people who are reacting to the crisis differently than you are. Look for the little ideas that might be big ideas and game changers over time,” Dancer said.

Also see: “7 Predictions for Distributors on Near-Term COVID-19 Economic Consequences.”

  • Every crisis creates the opportunity to change. Push your business model in new directions. “What are the activities that the sales person performs that are migrating away, how much time is spent on those, and how much value does the customers place on those activities? … Think about what value I can add to customers now and going forward,” Dancer said.
    • Supply chain: Shape the narrative, from products sourced afar to value created locally — where customers work. Distribution is a $6-billion-dollar industry but not currently part of the conversation about the evolution of the supply chain, Dancer noted.
    • Human sales: Customers are no longer reaching out to sales reps for all of their needs, but rather using technology to find some answers. Dancer recommended unbundling services, then expand the value created for customers by freeing up sales to perform other value-rich activities enabled with data, analytics and AI.
    • Valued services: From distributing products to creating goods for customers and communities. For example, make annual customer review meetings forward-looking and predictive, rather than backward looking.
  • Consensus kills, curiosity thrills. Challenge your mindset. If you’re looking for best practices in a period of crisis, remember that crisis means both change and opportunity. “Don’t accept what everybody is saying the ‘new normal is’ too fast. That’s consensus. It’s too early to drive for consensus,” Dancer said. “We should be curious about what’s working and what’s not.”

“This is a time to make or break your brand,” Dancer said. “Distribution, relative to other industries, doesn’t spend a lot of time on sophisticated brand development. Because of the disruptive thereat of digital transformation, distributors who don’t respond that they’re here to help can actually do damage to their brand. … This is a really good chance to start building your brand and moving it in new directions.”

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