This is a part of the 2013 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.

2013 Distribution Trends Report

Data is big in business today. “Data is king right now. If you don’t have good data, you’re in trouble,” says Chester Collier, senior vice president, global distribution for manufacturer Walter Surface Technologies in Montreal. “You always hear ‘cash is king,’ but data is what helps to drive the cash in today’s market.”

Distributors in recent years have developed a greater appreciation for data’s role in helping them expand into new markets and better serve existing customers. “Data is the lifeblood of a distributor. Our teams are constantly analyzing data to determine the most effective ways to serve our customers from cost savings to logistics and synchronizing supply with demand,” says Dan Brailer, vice president, investor relations and corporate affairs for WESCO Distribution Inc., Pittsburgh, PA.

Data collected via the Reading, PA-based C.H. Briggs’ Inforce Everywhere software, which collects information from Salesforce as well as social media platforms in real time, helps the specialty building products distributor discover and rectify issues as they arise. Despite the project’s success, CEO Julia Klein doesn’t refer to it as big data. “It’s what we would call ‘little data,’” she says, since external information such as end-user preferences and behaviors isn’t included.

Chris Bursack, director of marketing for power transmission distributor ISC Companies, Plymouth, MN, says his company is working to better utilize the data that already exists in its ERP systems to uncover better pricing procedures, enable better quote follow-up and identify margin leakage. It’s more about “a bunch of little things that data can help us do better” than it is about big data, he says.

“The vast majority of distributors have got so far to go before tackling big data problems,” says Jonathan Bein of Real Results Marketing. Big data, as he defines it, is more discovery-oriented than basic analytics, looking for trends among huge volumes of data to find answers to questions companies didn’t even know they had. What’s more important for distributors right now, he says, is finding answers to the basic questions distributors have already identified, like how much it costs to serve each customer.

Before distributors can tackle big data, they must first overcome the challenges many say they are facing with basic analytics, like ensuring the accuracy and uniformity of data, finding the right people to analyze it and drawing conclusions from it. “Getting data is never a problem,” says David Parks, executive vice president of fluid power distributor Hydradyne in the Dallas-Fort Worth, TX, area. “Getting data in a useful form that you can make decisions from is always the challenge.”

When small and mid-sized distributors master little data, they can begin to explore the big data problems that larger companies have begun to tackle, Bein says. Until then, he says, big data is more of a fad than a useful tool for most distributors.  Some, though, are already looking ahead to where data can take them next. Klein, for example, imagines a software program that automatically tells the company what else it might be able to sell to a customer based on the purchasing patterns of past customers. “But we’re not there yet,” she says.