A Hybrid Retail Model in the Distribution Sector

A Hybrid Retail Model in the Distribution Sector

           

Although the end of the pandemic is finally in plain sight, many of the changes it has set into motion will remain in effect long after its departure. The virus has accelerated digital adoption across many business sectors – and the distribution sector has been no exception. The steady growth of online marketplaces, such as Amazon Business, has shaken up traditional brick-and-mortar distribution establishments in an unprecedented fashion.     

                            

An Upsurge in the E-Commerce Market

In 2020, Amazon Business reported annual sales of $16 billion, surpassing Grainger – the number one company on Industrial Distribution’s 2020 Big 50 List – by $4.5 billion.[1] At the end of its first quarter of this year, Amazon Business had reached $25 billion in annual sales, with over $5 million sellers on its platform.[2]

According to a PwC survey, close to 70% of U.S. manufacturers and distributors agree that integrating e-commerce into their sales models over the next few years is a top priority.[3] E-commerce distribution models are thriving and the entire distribution sector is taking note of consumers’ interest in online retail. 

According to Digital Commerce 360, consumers in the US spent $861.12 billion on e-commerce in 2020, a remarkable 44% increase year-over-year.[4] Growth did not subside in 2021, as the e-commerce market reached an impressive $196.66 billion in its first quarter.[5] This translates to a 39% increase when compared with the same quarter of 2020. The e-commerce market has been growing steadily since the onset of the pandemic, and does not show evidence of slowing down any time soon.

Brick-and-Mortar Establishments Maintain their Relevance

The question is, where does the strong emphasis on e-commerce leave brick-and-mortar distributors? Fortunately, with vaccine programs well underway, there is still a place in the market for brick-and-mortar distribution centers. An informal survey carried out by Forbes suggests in-person shopping is high on many peoples' wish lists – a close second behind spending time with family and friends.[6]

As retail specialist, Motti Farag, puts it: "Retailers will continue to evolve and attempt to drive traffic to their brick-and-mortar stores as these locations continue to be vital for their customer connections and overall profit margins. There is a reason why brick-and-mortar locations continue to make sense. It is the place where retailers connect with their customers and offer best-in-class service to particular communities. These locations are still key, whether it be for in-store purchases or last-mile fulfillment."[7]

Although e-commerce is on the upswing, brick-and-mortar stores add value to consumers in their own right, and should not be forgotten altogether.

The Best of Both Worlds: A Hybrid Model

According to manufacturing experts, a hybrid model – where distributors sell materials in person as well as online – is the best option. A hybrid approach allows distributors to keep the value-added brick-and-mortar services that set them apart from fully digital distributors. At the same time, it allows them to embrace innovation and meet the needs of those who prefer shopping online. Consolidating online and in-person retail allows distributors to broaden their reach and increase sales; an e-commerce store can be viewed as an additional revenue stream.


Building A Robust E-Marketplace

Salesforce’s Commerce Cloud is the leading B2C and B2B e-commerce solution. The platform is a multi-tenant tool that empowers businesses to create intelligent, unified buying experiences across all digital channels, including web, mobile, store, and social platforms. Commerce Cloud offers a variety of developer tools, templates, and commerce application programming interfaces (APIs), to effortlessly build e-commerce websites – without requiring code. Commerce Cloud allows distributors to launch their websites in short order, so they can grow faster, and reach more contractors. 

Salesforce’s Commerce Cloud is the only solution powered by artificial intelligence. Distributors can deliver personalized shopping experiences across all channels — without a data expert.

By leveraging state-of-the-art Salesforce technology, distributors can build innovative customer experiences that drive sales and inspire customer loyalty. Additionally, Salesforce provides a robust set of capabilities, including marketing, content creation, fulfillment, promotions, and customer service. 

At Gerent, manufacturing is our largest area of focus. We deeply understand the challenges faced by the industry and how to help manufacturers get the most out of their Salesforce implementation. Our project completion rate is 40% faster than other Salesforce implementation partners, ensuring you see results and value for your business sooner.

To learn more about how we can help your company drive digital transformation with Salesforce, contact us today.


[1] https://www.inddist.com/e-commerce/blog/21198512/how-amazon-business-stacks-up-against-the-top-big-50-distributors

[2] https://www.inddist.com/earnings/blog/21330806/amazon-business-just-hit-25-billion-in-annual-sales

[3] https://www.pwc.com/us/en/industries/industrial-products/library/manufacturing-e-commerce.htm

[4] https://www.digitalcommerce360.com/article/us-ecommerce-sales/#:~:text=Consumers%20spent%20%24861.12%20billion%20online,the%2015.1%25%20jump%20in%202019

[5] https://www.digitalcommerce360.com/article/quarterly-online-sales/

[6] https://www.forbes.com/sites/calvinschnure/2021/03/18/brick-and-mortar-retail-is-bouncing-back/?sh=65895a15d0f4 Therefore, physical shopping centers are likely to see a rebound in sales throughout 2021.

[7] https://www.bizjournals.com/losangeles/news/2020/12/23/store-future-blend-in-store-e-commerce-shopping.html

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