Now is the time to get ahead, set new standards, innovate, experiment, test, invest, and use data to propel you forward. 

Innovators in distribution see EBITDA margin growth 2.6X above distributors that classify as Growth Performers and more than 8x higher than Underperformers. - McKinsey & Company, 2023

But change can be tough. In our last blog, we covered the 5 steps to manage innovation so you can future-proof your business without worrying about costly risks. These were: 

1.   Identify new trends
2.  Experiment with short-term sales and marketing strategies
3.  Invest in future-proofing your digital strategy
4.  Measure success
5.  Iterate & repeat

The first step to managing innovation effectively is identifying trends, and we’ve seen some significant patterns in the distribution industry leading us to where we are today. These patterns fuel the fire for growth and expansion, making innovation a priority for successful distributors.

So, what’s been going on in the industry that you need to keep an eye on? Here are seven new trends raising an eyebrow for innovators in 2024. 

A Frictionless Buying Experience

You used to be able to rely solely on tried and true methods to engage with and sell to your customers. But that’s not the case anymore. Today, your customers want to get in and out as fast as possible so they can return to work. 

That’s why a frictionless buying experience is key to keeping them satisfied. A frictionless experience is quick and convenient, with minimal barriers. A frictionless experience offers you many benefits, like increased customer satisfaction, higher conversion rates, reduced abandoned carts, and a stark competitive advantage. 

Provide customers with a frictionless experience by:

• Make placing orders seamless: Prioritize a quick order process. Offer multiple channels so customers don’t have to rely on the phone or come into the branch to reach you --- this way, they can send pictures of products and cut miscommunications that waste time. 
• Make your internal processes seamless: Invest in making your internal tasks efficient. If customers have to wait for you to find products, their order history, or finish up other projects, their experience will be slower and more frustrating. If your processes are seamless, your service is seamless.
• Prioritize Communication: Communication is key to efficient internal and external processes. Invest in easy-to-use business dedicated communication software so every conversation within your team or with customers is as simple as pressing a button. 

Get actionable tactics to optimize your frictionless buying experience

The Death of Slow and Steady

Quietly adapting and reacting to changes in the industry isn’t cutting it anymore. Because of busy lifestyles, tough economies, and incredible digital advancements, customers prioritize convenience and are much more selective with where they spend their dollars. 

This means you need to adapt faster and be proactive. By being proactive, you are the first to offer your customers a new experience. Having a proactive outlook allows you to mitigate risks, seize new opportunities, make more informed decisions, and maintain your competitive advantage. 

Build a proactive approach to business by:

• Understanding Your Industry: Study trends to understand where every shift comes from. If you’re well-informed, you’ll be able to identify patterns and predict challenges or changes in customer needs. 

• Setting Clear Goals: Set tangible Key Performance Indicators (KPIs) based on finances, sales and marketing performance, customer satisfaction, and more. This way, you can better understand your organization's status, monitor its progress throughout the process of change, and pinpoint opportunities for improvement. 

• Investing in Innovation: Encourage change, creativity, and learning from failure. By building a culture that sees the value in innovation, your team will be ready for any challenge you decide to take on. 

Get actionable tactics to innovate and speed up growth

The Next Step in Digitalization

Digitalization isn’t as much a buzzword as an expectation today. Successful distributors are taking it a step further & building a digital ecosystem or a network of interconnected software that communicates and exchanges information automatically. 

A digital ecosystem enables automation and faster service and fosters innovation within your business. They allow your information to be consistent across platforms, reduce errors, and enable your team to work more efficiently. 

Develop your digital ecosystem by:

• Selecting Platforms and Technologies: Choose the right software to connect and support your ecosystem. Consider which tools will power faster work and provide a frictionless experience for your customers.

• Integrating Your Technologies: Through Application Programming Interfaces (APIs), connect your technologies to communicate and transfer data within the ecosystem.

• Onboarding Team Members: Prioritize educating and supporting your team while you’re developing your ecosystem. This way, change will be seamless, and you’ll see the full benefits of this investment. 

Get actionable tactics to level up your digital strategy

The Year of Mergers & Acquisitions

From 2022 to 2023, there was a 53% (403 in total) increase in M&As in the distribution sector, and this upward trend is likely to continue. This has been caused by more access to capital (low-interest rates), private equity investment, changing customer demands, retirement & succession planning. 

Regardless of whether or not you want to be acquired, this means innovation is key for your business. For organizations looking to be acquired, you’ll need to drive growth and expansion to get the best price. And for those not looking to be acquired, you’ll need to keep up with these conglomerates.

Prioritize innovation so you can stay competitive by:

• Prioritize Sales & Marketing Strategies: Build a plan of short and long-term investments that drive sales and marketing to engage with customers through new avenues and chase every opportunity to score a profit.

• Embrace Technology: Constantly look for ways to automate facets of your business and prioritize building your digital ecosystem while you expand. 

• Take on an Iterative Mindset: Promote a culture that sees the value of innovation and embraces uncertainty. 
  

Get actionable tactics to stay competitive amidst evolving business requirements

Ready to innovate? Download our handbook!

Better Data Analytics

Successful distributors are leaning heavily on data analytics to drive growth. Data analytics is the process of analyzing, interpreting, and drawing insights from large volumes of data. This informs decision-making and helps you solve problems. 

Higher customer expectations and more competition have made data analytics essential. With strong data analytics, you can make informed decisions, assess risks, better understand your customers, and create market forecasts. 

Improve and optimize your data analytics by:

• Investing in Technology: Invest in data analytics tools, platforms, and technologies that align with your business’s needs. Look for tools with data visualization, statistical analysis, machine learning, and data integration capabilities.

• Collecting Relevant Data: Identify telling sources of data, both internal and external, that provide insight into your business operations, customers, and markets.

• Promoting Data Literacy: Train your team so they have the skills to understand and leverage data when they’re making decisions. 

Get actionable tactics to improve your data analytics

Even More AI

Like data analytics, successful distributors are using AI to power growth. Following an explosion of data, greater problems to solve, higher customer expectations, and the overall need for speed, AI emerged with the ability to revolutionize how distributors run and is quickly becoming essential to staying ahead. 

AI algorithms can analyze data, recognize patterns, automate repetitive tasks, and help you solve problems. 

Start incorporating AI by:

• Prioritizing Data Analytics: Strong data is crucial to leverage AI. Make sure you’re effectively collecting and analyzing data before you make AI an initiative. 

• Find the Right Technologies: Consider your needs and the complexity of the data you have. Start by looking at any tools you already use and see if they have AI capabilities. 

• Identify Use Cases: Identify specific use cases where AI can deliver tangible value. Start with smaller, well-defined projects that align with your goals and can give you quick wins and ROI.

Get actionable tactics to start implementing AI into your innovation strategy

The Rise of Automation

With more technology and higher expectations, you need more automation to keep things running smoothly. Today’s need for speed means distributors don’t have time for tedious, error-prone tasks. 

Automation allows you to be more productive, better manage your inventory, and provide your customers with a frictionless experience. 

Incorporate Automation into your business by:

• Identifying Opportunities: See what tasks you have the ability to automate. This could be automatically syncing contacts across platforms or sending out order updates based on certain triggers. 

• Setting Objectives: Define clear KPIs for automation initiatives. You can set goals around improving efficiency, reducing errors, lowering costs, enhancing customer service, and other business aspects. 

• Integrating Systems: Implement APIs to connect existing software and automate data flow across platforms or perform certain actions based on triggers within one program. 

Get actionable tactics to incorporate automation and streamline operations

Conclusion

These trends all tell you the same thing: innovation is key to success today. Innovation allows you to keep your business growing and always provide customers with new and improved experiences. 

And while you evolve, partner with technologies that will power your innovation and make change seamless and exciting. 

Prokeep - Driving Innovation for Distributors

Prokeep is a communication platform tailored to distributors that connects text, email, and fax into one easy-to-access workspace. With Prokeep, your team can connect with customers, answer inquiries, and make sales, all with the press of a button. 

Prokeep powers your innovation by:

• Building a frictionless experience: With multiple communication channels combined into one dashboard, your customers can reach you in whichever way is convenient in a matter of seconds.

• Fostering Digitalization: Prokeep enables you to market to customers, make sales, and collaborate with team members all within one digital platform. This way, you’re not relying on the phone to do business and can get work done in a fraction of the time. 

• More Customer Insights: Prokeep securely stores all conversations and customer records in its dashboard. This makes for better data analytics and allows you to draw customer insights.

• Seamless Automation: With its API capabilities, Prokeep seamlessly integrates with any system, allowing you to automate order updates, sync contacts, and more!

Prokeep empowers you to provide a frictionless experience, create a better workflow for employees, collect better data, and make more sales in a fraction of the time. Are you looking to innovate your business and stay competitive? Let’s get in touch!