COVID-19 has wreaked havoc on our personal and business lives since March, but wholesale distribution — like other industries — found ways to navigate this disruption. In this year’s Market Trends survey, we asked how companies responded to the crisis, what (if any) positives emerged and how it affects their outlook. Here’s what they said.
This year’s Market Trends survey has a different feel to it, of course, because the world is a vastly different place than it was the last time we asked the industry to share what’s happening with their businesses and in their end markets.
Yes, many of the same issues remain for distributors, from e-commerce to ERP, technology to tariffs, talent acquisition to talent retention. But there is a new context that surrounds those concerns, an overarching theme that has dominated headlines since February, a once-in-a-lifetime economic event that rendered most other problems as secondary at best.
The impact of COVID-19 and how to navigate its ongoing disruption has been top of mind for every distributor for the last six months. And it doesn’t seem to be going away anytime soon.
In this latest iteration of our Market Trends survey, we asked how companies were handling this crisis and how it impacted their plans moving forward. We heard from distributors (59%), manufacturers (29.5%), services providers (8.7%) and others about how the pandemic negatively affected their workforce (e.g., they had to enact layoffs or furloughs), positively impacted their business (e.g., they were able to streamline their operations or become closer with customers) and everything in between.
Our first question was around layoffs and furloughs, with more than half — about 100 respondents — saying they didn’t need to let anyone go, even temporarily. Of those that did, there was a mix of layoffs and furloughs, ranging from one or two employees to 80% of the workforce, with many in the 5% to 10% range. Some respondents also cited payroll protection plan (PPP) loans as a reason for maintaining their staff.
Let’s look at some responses to a few of our COVID-specific questions:
In what ways has COVID-19 altered the way your business operates?
From socially distanced workspaces to curbside pickup at branches to Zoom meetings to selling PPE and JanSan products, distributors found new ways to respond to the pandemic. Below are some of the responses to our first question — about how your company altered the way it does business in light of COVID-19.
- “Remote working has greatly changed pretty much every process for office staff.”
- “Not much change. Implemented PPE and reconfigured workspace on the production floor.”
- “Far more phone and screen communications. Many more supplier considerations and options considered.”
- “Everything moved online and from home, except for the production staff and shipping, who have been split into two shifts for worker spacing purposes, as well as not having to shut all production down if someone tests positive.”
- “We have adjusted our policies with respect to safety, restrict and monitor visitors much more vigilantly, enacted cleanliness/sanitizing policies, and adjusted some work schedules to reduce density in our facility.”
- “Inside sales, supply chain, and other office-related jobs are working from home. Warehouse employees are to observe all social distancing and mask guidelines while working in the warehouse. We have put social distancing measures in place for walk-in customers.”
- “We were deemed essential and received permission to continue to operate in-house, at full staff. However, many of our vendors and manufacturers were working split shifts and/or at home creating tremendous customer service issues.”
What positive changes has your business gone through since COVID-19 emerged?
Distributors are resilient. Many looked for the silver lining of this pandemic and found ways to better serve their customers, adapt new technologies (or even existing technologies not previously explored) and reduce unnecessary expenses that probably won’t return to the budget. Here are a few examples of the positives that emerged from the COVID-19 crisis.
- “Work from home is working well. The sales team pivoted to online meetings and remote demonstrations. Our bookings are up >12% for the first half, and the use of our CRM tools and pipeline management are really helping.”
- “Accelerated some product development and identified new communications channels to customers.”
- “Home-office is possible and can be a cost-saving initiative; E-commerce boost forced [us to accelerate] some plans.”
- “We were able to clean out a lot of deadwood, eliminate duplicate positions, and consolidate facilities and operations under the cover of all this mess without the usual issues that go along with doing those things.”
- “Not a whole lot of positives at this point. I guess the one positive is we now know that we can operate our business, with the exception of our distribution centers, remotely.”
- “We’ve had time to restructure, add great partners and skills and redefine a marketing plan that we don’t usually have the time/focus to complete.”
- “We opened a new facility in the middle of this — from a deal we closed in February! — We’ve had people step into new roles in an extraordinary time and it’s been great to see that growth.”
- “Brought our staff closer together; they have developed their skills on video conferencing and working remote, our business has grown and we have been able to hire quality new associates.”
How are you planning to build revenue over the next 12 months?
Growing revenue from existing customers (68.7%), improving e-commerce capabilities (61.5%) and adding new products or product categories (54.4%) were the top three ways that distributors said they plan to build revenue in the next 12 months.
How are you planning to cut costs over the next 12 months?
Improving employee productivity (68.1%), streamlining/automating processes (62.1%) and reducing overhead (38.5%) were the top three ways that distributors plan to cut costs over the next 12 months.
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