Wholesale Distribution and Manufacturing businesses work with tangible products. The business buys raw materials or products and converts them, either through process, transportation, or both, into finished goods. Orders come in and go out to customers. This traditional process has not changed much in the last few decades, and it is still the primary value these companies bring to the market.
However technology has enabled many different potential channels to the customer. How do we interact with businesses today? We go online. We look at websites, or use a banking app, or pay the telecom bill online. We have transformed how we shop and conduct business.
That transformation has not changed manufacturing, but it has disrupted channels, creating opportunities and dangers that did not exist before. Following a dropship model, traditional wholesalers or retailers can avoid logistics altogether. Manufacturers can hire contract manufacturers for parts and products they do not create.
Manufacturers, wholesalers, and distributors need to see omnichannel as more than a checkbox in order to create an effective strategy.
In a field where anyone can sell anything, customer experience becomes the new mandate. How convenient is it for your customers to do business with you?
Technology has revolutionized the way that Wholesale Distributors and Manufacturers interact with customers. When data can be exchanged quickly and inexpensively, these interactions can become much more flexible and collaborative. This has broad implications for your business.
Products have always traveled different paths to reach the end customer, but the primary question was: Where would the purchase be made? Now, the question is not where, but how. There are many different platforms customers can use to make purchases, request support, track orders, and discuss/research products.
“Customer” is a loose term here. It is equally important to remember that in addition to the end consumer, you may have distributors or external sales reps. There may be other stakeholders in your ecosystem that need to pull information from you on a frequent basis. They need ways to interact with you that they would define as convenient, no matter their preferred platform/s, or they will buy from a competitor. Omnichannel is about opening these different pathways for your stakeholders to interact with you.
Many attempts to implement omnichannel fail because the business is unnecessarily ambitious in Phase 1. It can be very good to have a long-term roadmap which describes the ideal end-state. It will take significant investment of resources and time to achieve the end-state, however. Rolling out incremental improvements along the way is not only more efficient, this stair-step plan has been proven to increase the probability of achieving the project’s strategic goals.
We advise you start with implementing the most basic foundation for an omnichannel strategy at first.
We want to extract the maximum business value for the investment, so the next question to ask is what platforms and capabilities will deliver the most cost savings or profitability?
Return Merchandise Authorizations, or RMAs, can be onerous from a business process perspective. An RMA is most likely a supplemental business process because it does not drive performance. It might help improve customer support, or in some industries, like clothing, it might actually increase sales because the fear of returning an item is a significant concern. However, most industries will find more important areas of focus.
Making the customer journey easier during the purchase process can have profound implications on revenues and repeat business. This is a more typical starting point. An RMA might be a Phase 2 or Phase 3 item on the roadmap, but Phase 1 should be concerned with the most impactful items so that you can derive value quickly.
Many businesses are doing omnichannel without putting thought and planning into the strategy. Remember that omnichannel is not about operations. The focus needs to be on the customer and external parties. The plenitude of channel options makes it important for businesses to take the time to understand how their highest-value stakeholders want to engage, taking the customer into consideration before planning begins.
Think about how easy or difficult it is to do business with you, and be sure to consider each customer profile. Once you understand where these difficulties lie, then you can problem solve with the ability to unlock new pathways for purchases and services. In some industries, we see external sales agents using specific software or platforms. Part of an effective omnichannel strategy could be to integrate with key platforms.
By considering customers, the most basic foundation, and the core business, you will pare down the omnichannel initiative to the smallest investment required for the greatest impact.
Opening different channels for communication is difficult enough without impacting fundamental business processes. The initial goal for a digital transformation should not be to open these diverse pathways but to funnel them into one process. Some businesses try to duplicate or translate processes, but this approach can be costly. Imagine replicating a Return Merchandise Authorization (RMA) across different channels.
A better strategy is to funnel interactions into the current process within four walls. Instead of creating new RMAs, grant access to RMA process online. Give Customer Service Representatives (CSRs) access to the exact same tool. The main business logic can stay the same, but enable stakeholders to interact on a screen, in ways that are convenient for their process while conserving yours.
Digital transformation is about changing your organization through significant process improvement by giving your customers, vendors and stakeholders the greatest flexibility for interacting with your business.