Distributors entered 2022 amidst a bullish and relatively rosy outlook. Having weathered many of the economic and supply chain crises brought on by the COVID-19 pandemic, most signs point to opportunities for companies to recover and thrive in the new year. (Fourth-quarter financial results from 2021 suggest that recovering and thriving is already well underway.) Success, however, won’t be handed to distributors. As our podcast guests from the first two-plus months of 2022 have suggested, companies will have to combine new and old ways of thinking; they’ll also have to leverage analytics and new technology options to operate efficiently in an ever-changing business climate.
This is a recap of the major thoughts and points guests have offered during MDM podcasts so far in 2022. Click on the headlines to read more, or listen to each episode in the embedded players included below.
- The “guru of financial performance benchmarking” tells MDM there are several ways smaller distributors can gain competitive edges over larger competitors as high-touch customer opportunities continue to develop. Larger distributors tend to have an advantage in tech because of deeper resources, but Bates says the more tech-driven the industry becomes, the more it creates an opportunity into a significant share of the market (millennials and older customers). Bates also talks about how current metrics used for customer and item profitability are pushing larger companies to “jettison unprofitable customers,” allowing more flexible and entrepreneurial distributors chances to pursue growth.
Jan. 12: Andrew Walker, Shift7 Digital CEO
- If distributors are looking to embark on digital transformation efforts in 2022, they initially must rethink the “product-first” focus of their websites, Walker tells MDM. Walker encourages digital-minded distributors to think like content storytellers by engaging visitors and eliciting emotions or actions from customers. Each distributor may want to use a different approach, but the overarching goal is to introduce human elements into what can sometimes be a mere mundane listing of products and services that might not speak to specific customers’ needs.
Jan. 18: Keith Williams, Factrees CEO
- By now you’ve probably read the phrase “LinkedIn meets a dating app.” That’s how Williams describes Factrees, an AI-powered platform seeking to digitally transform the distribution sector. Factrees, which emerged late last year, is a B2B networking platform that focuses on company profiles instead of individual users. Factrees uses a complex algorithm to match reps, manufacturers and distributors with best-suited partners. As distributors continue to wrestle with pandemic-caused complexities, Williams says the platform offers a single-visit location for companies looking to make connections and mitigate supply issues.
- In 2022, smart mixes of profitable products and agile procurement can strengthen distributors’ competitive position, says Carrieres. As companies continue to adjust to challenges brought on by COVID-19, distributors can review operations or rethink current partnerships to get ahead of the next industrywide issue, whatever it may be. Distributors in 2022 also should understand that managing a mix of inventory needs with budgetary responsibility has become vital for operations, Carrieres says. The year ahead should be a strong one, but managing an optimized and budget-friendly mix will be an important task.
Feb. 1: Larry Davis, AgoNow CEO
- Distribution customers continue to move toward digital offerings for their procurement processes, Davis tells MDM. Because of this, it has become critical for distributors to have engaging digital content. This keeps customers from fleeing to another resource because they’re unable to get the product information they need. In 2022, personal relationships and salespeople will have continued importance, says Davis, but as a hybrid model. Today, distributors still need to scout out new opportunities through conversations and in-person visits, but they also must look for evidence that they are creating value for partners, Davis says.
- Breaux shares details about Motion Industries’ $1.3 billion deal to acquire Kaman Distribution Group, an agreement that was announced last December. Breaux talks about how long look it took to finalize the deal, and he outlines how the newly combined fluid power and automation businesses will work as one. “So, it’s a win for all of us,” he tells MDM.
Feb. 16: Tony Pericle, ProfitOptics CEO
- Pericle believes distributors can use analytics and technology to make better decisions. He tells MDM that prescriptive analytics, AI, workflow automation and profit optimization are among the ways distributors can leverage data for growth in 2022. Pericle says smaller distributors can outmaneuver larger competitors by correctly applying relevant analytics, while many industry leaders continue to face challenges in hiring analytics-focused talent. Whether it’s a single data quarterback or a team of analysts, focusing more on analytics is a must for companies seeking to thrive or stay competitive.
- The year ahead is likely to shape how executive teams manage inventory, pricing, margin expansion and digital efforts. Gunderson says. Perhaps chief among those aspects is inventory, he tells MDM: “I think the inventory issues are going to straighten out a little bit this year.” As aspects such as inventory begin to realign, they will go back to more of what Gunderson calls “normal distribution dynamics,” where companies need to have inventory but also need to have it priced correctly. Gunderson also believes relationship selling will still be important in 2022.
March 2: Barry Litwin, Global Industrial CEO
- Litwin tells MDM about the company’s prior-year financial performance and outlines strategic initiatives it will undertake to continue its transformation process. Global Industrial is investing in key strategic initiatives in sales, marketing, private brand, digital transformation and distribution to drive sales in 2022, Litwin says. And with a positive economic outlook for U.S. markets, Global Industrial plans to add to its sales team, he says.