How omnichannel is offering wholesalers and retailers new partnering opportunities
Through a special arrangement, presented here for discussion is a summary of a current article from the IMS Results Count blog.
In many ways, the role of wholesale distributors has been historically defined as the warehousing of products and shipping of bulk quantities to retailers. While distributors are still the bridge between manufacturers and many retailers, omnichannel consumer behaviors are creating new opportunities for these companies.
In a very real sense, omnichannel is requiring both retailers and distributors to think in terms of “mass distribution” customized for single products to individual consumers.
Retailers do not have the infrastructure, systems or resources to do it all. They need strategic partnership from distributors, who can offer solutions beyond just holding inventory or shipping pallets to stores. Omnichannel can be the perfect storm of distributor opportunities.
Omni-retailers are searching for partners in at least five key areas:
- Drop shipments – Retailers are looking for partners to help with rapid fulfillment of long tail online SKU offerings without dramatically increasing inventory.
- Rapid replenishment for “click and collect” – All stores have limited back stock so they require rapid replenishment for volumes generated by online purchases and in store pickup. Real time inventory tracking is also a key click and collect requirement.
- Precision delivery in time slots – It’s not just about speed of delivery, but customers requiring delivery at specific times, like when they are home.
- Click and collect at lockers – Delivery to pickup lockers helps solve timing as well as convenience issues for commuters.
- Returns, reverse logistics – Increasingly, consumers are purchasing online but returning to stores. Retailers need assistance with controls and reverse logistics.
With its volumes, Amazon.com can afford to build its own distribution system and logistics all the way from China’s manufacturing plants to the local consumer, whether that consumer purchases from Amazon or a Marketplace retailer. Traditional retailers are realizing that they don’t have the infrastructure, resources and omnichannel capabilities to compete.
This creates a “perfect storm” of opportunity for distributors to play a strategic role in helping retailers to increase assortments, responsiveness and fulfillment of the “last mile” all the way to the customer’s door when they choose not to come to the store.
More dialog and research will be required. But, in the words of Jeff Bezos at Amazon, “Tomorrow is day one.”
- 5 Key distributor opportunities in an omnichannel world – IMS Results Count
- Retail Wars – Is Amazon the death star or rebel alliance? – IMS Results Count
- 2017 Tech Retail Trends – Omnichannel Transformation – CONTEXT
DISCUSSION QUESTIONS: Do you see the role of third-party distributors greatly expanding to support the “anytime, anywhere” nature of omnichannel retailing? In which areas will retailers be better served by third-party distributors versus developing such resources themselves?