I spotted a new book the other day, The Great Acceleration, and I thought how aptly that described the staggering pace of change and technological innovation that’s reshaping the business world today. Not only that, there’s no sign of the speed or diversity of either abating. Add to this the interconnection of many elements and it all becomes a labyrinth of change that can be difficult to understand. Yet wholesalers must take advantage of relevant developments if they are to thrive going forward.
So, here’s my attempt to simplify it all – in no particular order, my top five hot technology trends:
1. Internet of Things (IoT)
The concept is becoming increasingly broad, but at a basic level, it’s pretty simple. It’s about connecting physical objects or devices over the internet, allowing them to ‘talk’ to us, and each other; a network of connected ‘things’ that potentially comprises anything with an on/off switch, each embedded with a sensor to gather data and take action across a network. It could be a smart fridge in a restaurant kitchen that texts the chef when items are after their use-by date or depleted, so that the chef can reorder from their wholesaler; an energy-efficient warehouse with automatic control of lighting and heating; or demand-aware warehouse fulfilment, where warehouse automation and robotics are driven by real-time online, depot and store demand, thereby improving stock management and service levels.
Analyst Gartner predicts that there will be more than 26bn connected devices by 2020, but others are estimating 50‑100bn – staggering! It could be the most important business change since the arrival of the PC, as it transforms the world of business from one in which items and customers are disconnected points in the supply chain to one where they are tightly integrated, persistently providing data and feedback to businesses willing to listen. It’s all about digitalisation, connectivity and collaboration – to make life and work easier and more efficient.
Wholesalers are already investing heavily in the IoT and transforming their business processes. Benefits range from highly efficient stock management, better customer insight and just-in-time distribution, to real-time customised sales experiences that grow sales and loyalty. It’s generally believed that over time, the IoT will touch most aspects of wholesale operations and customer engagement, with one vision of the future being a warehouse no longer organised by aisle and shelves or slots, but an open space where automated pallets self-organise, based on real-time demand.
2. Big Data
Digitalisation and the IoT create not only a lot more data, but also new kinds of data. Properly captured, managed and analysed, this can provide new insights and opportunities, improve customer experiences and the depth of customer engagement, optimise use of the workforce, and improve process and operational efficiency, as well as driving significant cost savings.
Wholesale distributors are now looking for ways to drive growth from data on the multitude of connected devices on their networks, to help answer questions about customer profitability, sales staff’s contribution to profitability, cost-cutting by working with suppliers, and so on. There’s the rub – the data comes at a cost, namely, the cost of capture and analysis. It’s all about being selective in regards to what data is retained, effective analysis of combined data from multiple sources, and useable reporting to make effective decisions. For wholesalers, that means investing in real-time business intelligence tools and/or integrated business systems, which can provide actionable information.
3. E-commerce
People still tend to immediately think of ecommerce in a B2C context – Amazon, Tesco and the like. But it’s now just as important in the B2B world. Wholesalers are having to address the challenges associated with creating an effective ecommerce strategy. This means implementing an online system with the sophistication, ease of use and features of everyday B2C sites, but also the specialist functionality required for the B2B sector, including complex pricing and promotions as well as account management – a true ecommerce solution rather than a basic online ordering system. The requirement is made more pressing by the mobile revolution creating an on-the-go, ‘always on’ culture, demanding service anytime, everywhere. Recent research by analyst Forrester predicts that in just three years’ time, wholesalers and manufacturers will outstrip retailers in ecommerce technology investment.
4. Changing supply chains
The internet, mobile technology and the emergence of multichannel have created a new breed of ‘phygital’ customer with higher expectations in terms of choice, speed, convenience and a seamless buying experience across all channels. Wholesalers’ customers are now not just looking for a bulk-delivered or cash & carry service, but are also buying online or direct from a manufacturer – when and where it’s convenient for them, with flexible delivery, collection and returns.
The repercussions for the supply chain will continue to be drastic. There’s a need for a much more complex, flexible and interconnected supply chain; a whole new level of transparency, collaboration and real-time stock information at every touchpoint; and robust, agile warehouse procedures and flexible stock movement to meet new order demands.
Wholesalers are realising that it’s not enough to have an impressive ecommerce front-end – the back-end stock and warehouse operations and management systems are just as critical. A strong back-end has the ability to streamline operations by providing detailed real-time information, as well as the flexibility to allocate stock from diverse locations to specific orders, thus ensuring that customers receive their orders without any complications.
Added to that, there’s a trend to use more integrated systems to provide the uniform platform and transparency that underpin success. Distributors are already embracing mobile technology to improve accessibility and efficiency – a trend which can only be expected to continue. Growth of the IoT will also help improve visibility across the whole supply chain, to the benefit of all participants.
5. Smarter world
There’s a gamut of things that fall under this umbrella, from smart energy and water technologies, to artificial intelligence, smarter robots, wearable technologies, smarter printing, driverless vehicles and drones. While some of these innovations are still just hype, others are already having an impact: 3D-printing is a reality in the here and now, significantly altering the supply chain, and moving ever closer to a scenario where it’s used for mass, rather than order-specific production. Wearable technologies, like Google Glass, are now finding a niche in the logistics industry: US supply chain firm Exel is testing them for ‘vision picking’. Increased automation and robots are making inroads in manufacturing and warehousing, while solutions to cut costs in the notoriously tricky and expensive last leg of delivery are high on the development agenda – autonomous robots and drones are already being deployed or trialled by the likes of Amazon and UPS, and driverless vehicles are tipped to have a major impact over the next 10 years.
Takeaway message
So, those are my top five technology trends. I believe these and other emerging technologies will help to reshape the wholesale sector and the wider supply network in which it operates over the coming years, enabling the development of new and more effective business models, and boosting efficiency and profitability. Wholesalers that embrace change will grow faster and more successfully than their competitors – and that’s a fact!
