When the coronavirus pandemic went global earlier this year, the leadership team at RS Components knew that the firm would feel the impact on several fronts. A distributor of more than 500,000 industrial and electronic products, it sources from 2,500 suppliers and serves about 1 million customers.
Not only would RS Components’ operations feel the effects of COVID-19, but so would many of its customers and suppliers. Suroor Anwar, vice president – Asia Pacific, strategy and commercial, says the company’s first reaction was to put competition on the backburner. “Serving our customers is primary,” says Anwar. “If we don’t have customers at the end of this, there won’t be anything to compete over, anyway.”
Build a Stronger Market
Anwar shared his thoughts on how distribution can come together and what all distributors can do to emerge even stronger in the post-COVID-19 world.
MDM: How do you envision distributors working together toward a greater cause during this time of crisis?
Anwar: We all need to come together and form an ecosystem whereby we can actually move the customer sentiment toward specialization in distribution. So, where there’s always going to be a role for the ‘big guys’ to play — namely, volume sales — this pause that we’re all dealing with is a chance to create more value for our customers and suppliers. At the same time, we’ll be creating value for the distribution sector as a whole, and particularly in the less mature markets.
MDM: With social distancing rules and other constraints in place, how important is e-commerce for wholesale distributors right now?
Anwar: At the end of the day, your customer channels are defined by your customers. I just saw some research reporting that digital B2B business has grown by 85% worldwide during this crisis. If that indeed is the case, then we’re going to see a shift to all digital within the next five (for the U.S.) to 10 years (for countries like China). That’s the direction that everything was going in already, and COVID-19 has accelerated it. For distributors, this means that at some point we’re all going to have to figure out how to increase our digital reach to the customer.
MDM: What does a distributor need to do to get there?
Anwar: Either they can build their own digital platforms, which can be expensive and difficult to maintain for a company where that’s not their core competency. Or, they can partner with a company that’s already strong in digital. There are a lot of platforms and marketplaces out there that are already built and fairly easy to hook into. My advice to distributors would be to start digitalizing now because that’s how your customer is choosing to transact.
MDM: What other advice would you offer a distributor that’s prepping for a post-COVID-19 business environment right now?
Anwar: When customers come out of this ordeal, many of them will have seen significant revenue drops over the prior four to five months (or so). At the same time, they’ve spent a lot of money maintaining their assets and keeping their business running. As a result, they’ll all be looking for efficiency gains made possible by data, digitalization, and automation — all of which can be supported by a distributor that’s put the time, money and effort into digitalization.