Must-Read Blog Series
Go to this link for an article on MSC Industrial and Crescent Electric:
Pay attention to the specific features, benefits and design guidelines that are reported. Consider doing the same for the reviews for: Essendant’s (8/9); Hajoca’s (8/28); Cardinal Health’s (8/31); Univar’s (7/30); and Blair Candy (7/25: small-firm story!)
Note that MSC, Crescent, and others involved key customers in co-creating customer-centric solutions. Customer-friendliness helps them better retain customers, and steal some sales from traditional competitors with less effective sites.
But, how will their sites compete against digital startup discounters like Amazon Business? Or mesh with some suppliers’ new, direct-selling (for some SKUs) Omnichannel solutions for end-users? Won’t distributors’ static, legacy, service-cost bundles, and pricing – struggle?
The next two cases illustrate new digital scenarios that will require legacy-model changes.
Same Blog Series: Two Model-Shaking Cases
Case #1: Farmers Business Network (8/23). FBN has, for years, provided farmers with data to help them run their businesses. With new capital, it’s now providing farmers an online portal for purchasing private-label commodities at low, discount prices, because:
- FBN’s “from-scratch” fulfillment-cost model is less expensive than legacy players’.
- FBN hasn’t accumulated unprofitable SKUs or customers that must be cross-subsidized with higher prices on shoppable commodities.
- Outside and inside rep costs are negligible.
FBN is a digital deep-discounter (similar to Aldi stores). And, next-generation buyers are increasingly “web-rooming” legacy distributor prices, whenever possible.
Case #2: (June 11th) Read how three manufacturers are inventing full product-discovery journeys for end-users (including selling them directly if practical and desired by the customer). The idea that a manufacturer’s full-line should be – 100% sold to and through distributors, 100% of the time – is not end-customer centric within the emerging cloud ecommerce world. How will legacy distributors and their suppliers co-create Omnichannel buying scenarios by 2021 that are seamless, digital journeys in which all parties win?
Analytics For Rethinking Channels
Distributors with cost-to-serve models at the Line-Item level have P&L’s for every SKU and vendor. They can identify solutions to reduce vulnerable, profit/loss cross-subsidies that exist amongst both customers and SKUs. And, If they share their new math with vendors, solutions for triple-win, omnichannel scenarios emerge.
For how-to’s for these challenges check out: www.merrifieldseminar.com