The 2020 Mid-Year Economic Update_long

COVID-19’s Impact on Distribution Is Here to Stay 

The pandemic caused real change. Now we have the opportunity to push digital transformation further and faster into the distribution industry. That’s a long-term win, says proton.ai's Benj Cohen.
Older mature female online store small business owner, manager, stock worker, entrepreneur wearing face mask and gloves standing with arms crossed at workplace in warehouse looking through window.

Now that COVID-19 vaccines are rolling out across the nation, you might think we’re on the verge of “returning to normal.” However, instead of returning to life as it was, some of the changes brought on by the pandemic will likely stick. It’s time for distributors to embrace this next stage and accept the lasting impact of COVID-19 on the market.

Changes to distribution aren’t going away, and neither is COVID-19. According to public health officials and scientists, unfortunately, even when most citizens are vaccinated, we will not be rid of COVID-19. With variants of the virus popping up in New York City and around the world, the ease of transmission of this virus and vaccination rates lagging in other countries, many experts believe COVID-19 will join other endemic diseases such as HIV, the flu and measles. They don’t go away, but we learn to co-exist. What does this mean for distributors?

I see two impacts of COVID-19 that I believe distributors should accept.

Supply chain disruptions 

While COVID-19 revealed weaknesses in our supply chains, it’s not an isolated event. Whether it’s this coronavirus causing regions to randomly go into lockdown or other events such as natural disasters, another pandemic or political unrest, distributors need to expect and plan for supply chain disruptions.

The resulting backorders will continue, resulting in more customer service calls, increased shipping expense and a higher return rate. Perhaps the highest cost of extended lead times is the frustration to your customer and the potential loss of their business when they go to another distributor.

Artificial intelligence can help your sales and customer service team navigate backorders. For example, suppose the PPE the customer usually orders is backordered. In that case, AI can identify an alternative product and even proactively automate communication to the sales reps regarding the item. While a good sales rep might do this for regular customers, AI allows your company to provide that same level of service at scale.

New ways of engaging customers require a new toolkit

When COVID-19 lockdowns made face-to-face meetings impossible for a time, distributors pivoted and found new ways of connecting with customers. Distributors expanded inside sales teams, adopted digital in “a massive way,” and embraced social media and Zoom to stay in front of customers.

Companies had to go digital to survive, but COVID-19 accelerated that adoption. Now that distributors and customers rely on multiple sales channels, there’s no going back. To thrive, companies should consider expanding their toolkit to help sales reps be just as good working with a customer remotely as they are in person. AI provides the tools to look inside a distributor’s supply closet (purchase history, appropriate complementary products, etc.). A sales rep needs to be successful even when they aren’t onsite. The upside of that is that sales reps who spend less time traveling to see customers in person can reach more customers every day. COVID-19 might have hastened the transition to sales reps working with customers remotely, but it will be AI that helps those reps provide the best customer experience.

Keep moving forward

As the world reopens, the transformations that were accelerated in response to COVID-19 will remain. As Nobel Prize-winner for Economics Milton Friedman said, “Only a crisis, real or perceived, produces real change.” The pandemic caused real change. Now we have the opportunity to push digital transformation further and faster into the distribution industry. I believe that’s a long-term win.

Related Posts

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.