It’s time for distributors to change their way of thinking about perceived threats in the industry. Rather than try to fight off or even cower from the threats, distributors should embrace the business models that threaten them, according to a post on the Harvard Business Review blog.
One example the author provides is Walmart vs. Amazon. In response to Amazon’s online dominance, Walmart dove in, blending its network of stores and distribution with an online presence that allows it to drop-ship same-day to local stores for quick pick-up.
It’s similar to Grainger’s approach in recent years. Grainger took a brick-and-mortar sales network and supplemented it with an extensive e-commerce strategy and platform, which brought in 30 percent of $9 billion in 2012 sales. But Grainger did not drop its brick-and-mortar and sales-driven business entirely to focus on e-commerce. It chose a blended approach that better served the customers it was trying to reach, arguably giving it an edge over Amazon and later AmazonSupply.
Rather than trying to decide how to beat new business models, Grainger and other distributors big and small have figured out how to make what’s new work for them. That doesn’t mean that the latest greatest thing is right for every company, as the author says. The right skills are required to merge new ideas with your current business approach, and it’s possible another solution is a better way to respond to new market pressures and may even provide an edge.
But rather than hide from new types of competitors or new technologies, distributors need to think about how they can adopt or adapt what makes those competitors or technologies tick to their advantage.
We wrote about the new competitive threats in the wholesale distribution industry in the recent Special Report: The Shifting Competitive Landscape in Distribution.