Changing Distribution Channels
Distribution Management is the whole process of delivering a product/ service from the manufacturer of the end customers. Manufacturers create a distribution channel to get the product UT out of the factory,onto the physical location,put a price tag on it and on the shelf,read for the customer to reach for it. The distribution channels do not just affect the price but they also influence other marketing decisions.
The Major two channels are
The seller/ supplier directly sells the product to the customer in a direct channel.
There is a need of adding a specialised intermediary because of their market contacts, experience and scale of ops. These can be further subdivided in to two popular models of Distributors/Brokers and Wholesalers/ Retailers
In recent years, we saw a big change/additions in distribution channels. This was due to e-commerce. E-commerce completely changed the game of distribution for reasons. E-commerce companies had a model of seeing themselves as the manufacturer, wholesaler or retailer. They make the products available for a large customer base and geography. High use of technology of big data, predictive analytics, AI and machine learning.
With changing times and now the pandemic, there is a need for every industry to work aggressively on the below key areas for the future. These value additions look like the important developments which need to be considered and worked upon.
Omni Channel Retailing
Omnichannel retailing is an expansion of multichannel retailing. Each company needs to ensure more development on the digital platform to reach the customer. Customers going forward would prefer shopping through digital platforms due to changed consumer behaviours post pandemic. It is very important that the customer experience has to be the same in Omnichannel shopping. Shoppers should get a unified experience either shopping online or offline.This needs a detailed study and action plan going forward. It is said that companies are able to retain 89% of their customers from channel to channel. Few of the companies which have successfully come on the omni channel platform are Apple,Starbucks,John Lewis, Harrods,Amazon,Walmart,Alibaba, The Future Group & Alibaba and many more.
Emarket places are generally a b2b online platform where buyers and sellers can register themselves to conduct business to business transactions. This is the future. More and more companies have to work on this and not to be left behind. It is so important that the Government of India has its own emarket place in the name of “GeM”. This is a great initiative by the government.
“ Amazon has well passed any expectations of its ability to change distribution and marketing”- Eric Schmidt
Digitisation & Automation 4.0
Industry 4.0 has been there for quite sometime now. The business drivers for Industry 4.0 were focused on productivity,cost reduction,faster time to market,competitive advantage,sustainability and innovation.However I look for Automation 4.0 more importantly to be focused. Establishments have to seriously get this going as post pandemic Automation 4.0 including Blockchain is the most important thing to be incorporated in the distribution process. Companies will have to look for working on Demand for high-speed WANs, Remote High-Performance computing,Enterprise Resource planning(ERP), Customer Relationship Management(ERP),Remote monitoring aided by IOT for monitoring manufacturing, Automated Guided Vehicles, Digitalisation of logistics and Automated Warehousing solutions. Blockchain helps you record and transfer data in a transparent, safe auditable and resistant to outages.
“ The secret to growth in this new era of disruptive technologies is being willing to ‘ Learn and Relearn’ even if what you knew previously brought your success”-NickyVerd
Healthy environment & Carbon footprints
The transformation to every process and activity in the distribution is in a safe, hygienic, sanitised environment. The companies will have to ensure proper stacking, social distancing and proper manpower ( avoid crowded workplace) in the warehouses and entire distribution channel. It is also the need for focusing on green supply chains,carbon footprint and working on doing something to save the environment.
Technologies that are emerging today will soon be shaping the world tomorrow and will into the future-with impacts to economies and to society at large.Now that we are well into the Fourth Industrial Revolution, its critical that we discuss and ensure that humanity is served with new innovations so that we can continue to prosper”- Mriette Dichristina
This pandemic has forced us to do changes for good and make the distribution system more robust ,agile and efficient for facing the challenges of the coming days. The earlier the companies adopt to change for tomorrow, is what is going to help them survive