Barbara Aichinger
Is a Principal Consultant at KUMAVISION and has many years of experience in the wholesale sector
Innovative technologies and unique shopping experiences – retail knows how to delight customers. This knowledge offers wholesalers many opportunities.
The increasing importance of online trading is breaking down the traditional relationships between producers, wholesalers, retailers and end customers. Existing sales channels become less relevant. Supply and demand meet directly on online platforms. Competitors with a start-up mentality are increasingly gaining market share. At the same time, a new generation of customers is growing up who not only uses digital information sources and shopping options, but also expects them from their business partners.
In order to survive in this dynamic competitive environment, companies must adapt and develop. Retailers reveal valuable insights to wholesalers. In this article, we explore how wholesalers can leverage B2C trading strategies and techniques to strengthen their relationships with existing business partners, reach new customer bases, and expand market share in an increasingly competitive environment.
The new generation of buyers is digital
Until recently, the field service was the linchpin of the purchasing process, but digital channels are now becoming increasingly important.
The buying process is currently undergoing a fundamental change, away from traditional field sales as the core and towards digital channels. This change is being driven largely by the younger generations, who are now gradually replacing the generation of buyers between the ages of mid-40s and late 50s. They completed their training without the Internet, email and online shops. In contrast, the next generation of buyers are growing up as digital natives. For them, the fax machine, like a rotary dial telephone or a tube television, is a relic of a bygone era. Even a web offer with PDF order forms doesn't go beyond the status of a VHS video cassette for this generation: It's funny that something like that still exists, but it's not practical. In the future, product and price research will primarily be done online, while personal contact with field sales will be greatly reduced. This development has serious consequences for what information and services buyers expect from a wholesaler.
What customers really want to know
Price research, product selection and purchase: The online shop plays a central role in the customer journey. This presents wholesalers with the task of consistently aligning their digital offerings with the requirements of the next generation of buyers. It is important, on the one hand, to integrate functions familiar from the B2C segment and, on the other hand, to meet the specific needs of B2B buyers.
Because there are clear differences: The ability to deliver is and remains, along with the price, the decisive criterion for buyers. You therefore expect transparent information about product availability and expected delivery times in the online shop. What's more interesting is that some functions such as reviews or additional product recommendations, which have become an integral part of B2C online retail, are less important for wholesale buyers. Instead, they place great value on a convenient search function, individually tailored prices and volume discounts. Click and collect, which is popular in retail, hardly plays a role.
Tip: Many B2B online shops imitate the shopping experiences from B2C shops and can therefore only partially meet the buyers' needs. However, a deeper understanding of the specific requirements of this target group, for example through regular customer surveys, enables targeted optimization of the online offering.
Offer the convenience of online ordering
A high-performance web shop is not only defined by the choice of shop software, but also largely by the seamless integration with the ERP system. This is the foundation for efficient e-commerce, as it enables the functions desired by buyers to be implemented and at the same time significantly reduces the effort required for data maintenance.
Thanks to the integration of the online shop with the ERP software, users benefit from the following advantages:
- Real-time display of current prices and available inventory
- Display delivery times for products that are currently unavailable or only available to a limited extent
- Overview of the shipping status of the goods through connection to logistics partners
- Information about returns received
- Electronic dispatch of invoices, delivery notes and other accompanying documents
- Possibility to set up individual shops with specific discount scales
A special feature is the possibility of giving individual user groups special rights. This allows, for example, different departments at a location to independently order consumables up to a set limit. The orders are calculated according to the company-specific discount scales and delivered directly to the ordering department.
The customer is the focus
Even if digital information and sales channels are becoming increasingly important, personal customer contact remains important. The coexistence of online and offline channels poses challenges for internal communication. For successful customer communication, it is crucial that sales employees not only know the contact details of a prospective customer or customer. You should also have a comprehensive overview of customer history: What products have you received information about in the past? Has specific information been downloaded online? Have there been any complications, complaints or complaints with past orders? Since this data is collected in different areas of the company, simple Excel lists are no longer appropriate. An advanced customer relationship management (CRM) system is therefore essential to gain a holistic view of all relevant information.
Recognize and meet needs
Nowadays, interested parties and customers expect a personalized approach and tailored content that offers them real added value - across all communication channels. To meet these expectations, companies must know exactly what their customers want. Artificial intelligence (AI) can play an important role here: for example, by analyzing the most successful sales strategies and deriving best practices from them. Or by predicting future developments in demand based on historical data. In this way, wholesalers can, for example, stock up on high-demand products in advance, align their business activities accordingly and invest in the right measures. To realize such data-driven insights and predictions, solutions like Microsoft Dynamics 365 to advanced technologies from Microsoft Azure, including machine learning.
It's no longer just the price that decides
An excellent B2B online shop alone is not enough to compete with big players and agile newcomers. It is just a beginning on the path to a digital future in which wholesalers no longer only stand out from the competition through price, but above all through the added value they offer their customers. As in B2C trading, the same applies to business customers: solve problems instead of just selling products! Opening up new markets brings with it an additional advantage: wholesalers reduce their dependence on traditional sales channels.
Here are some approaches you can use to provide this value to your customers:
- Renting is an attractive option for customers who only need machines for a limited period of time - be it for a specific project or to accommodate seasonal peaks. Processing can be optimized by using IoT sensors that monitor usage and location, for example, as well as AI for automatic damage recording.
- Pay-per-use is interesting for companies that shy away from a high initial investment. The costs only arise from the actual use of the machine. Sensors record the transit time or the output and transmit the data to the wholesaler’s IT system. Billing takes place there fully automatically. This variant can also be combined with rental.
- In principle, billing for consumables works like pay-per-use. Here too, the customer pays nothing for the machine or only pays a significantly reduced price. However, he undertakes to purchase the consumables - for example for a packaging machine - from the wholesaler. The machine is financed through the margin. No use of IoT sensors is required for this.
Higher customer loyalty, more sales
In addition to new business models, wholesalers can create additional unique selling points with expanded services and thus increase customer loyalty. The Internet of Things (IoT) plays a key role here, offering a wide range of options for service optimization:
- Predictive maintenance: By using IoT sensors to monitor critical operating parameters such as temperature and vibrations, potential malfunctions in devices and machines can be identified and eliminated at an early stage. This prevents costly failures and eliminates the need for fixed maintenance intervals. This reduces costs and increases customer satisfaction.
- The use of apps also offers real added value and increases customer loyalty. For example, if you can report damage or reorder consumables at the push of a button, you will clearly notice the difference compared to waiting on the telephone or having to spend time on written communication.
- C-parts management: IoT sensors on the container automatically report when consumables fall below the minimum quantity and trigger a reorder. At the end of the month, all orders are automatically combined into one invoice.
- By automating processes such as backorder clearance and inventory management, wholesalers can reduce capital tied up in the warehouse and thus save costs. At the same time, efficient logistical processes, for example through mobile data capture, lead to shorter delivery times and higher customer satisfaction.
The possibilities for developing and implementing new services are almost unlimited, provided the technical framework conditions are in place. To support wholesale companies in implementing new business models and services, Microsoft offers numerous preconfigured AI and IoT solutions as well as the Azure IoT platform. This enables the real-time transmission of device-related data via IoT sensors to ERP and CRM systems, forming the basis for digital services.
The answer to current and future challenges
It is now important to set the right course for a successful future. Regardless of whether it is about implementing an online shop, introducing pay-per-use models or optimizing processes - an essential key is modern industry software that brings together and controls all company processes on a single data platform. Because it is the transitions between two software systems where errors creep into the master data, information is lost and processes are slowed down.
Microsoft Dynamics 365 offers the appropriate technological foundation. The powerful and integrated business software opens up the latest technologies for medium-sized businesses and at the same time supports company growth. It goes far beyond the functions of a conventional ERP system. It provides companies with a globally unique platform that covers everything from the operating system to databases to applications and Cloud-Services intelligently link all relevant business solutions together. KUMAVISION's ERP industry solution for wholesale is based on this leading technology. It was specially developed to optimally meet the requirements of wholesalers and offers a variety of best practice processes directly in the standard. This eliminates the need for complex adjustments and lengthy implementation projects, saving time and money.
Any questions? We would be happy to take the time to talk to you about your goals and requirements. Arrange an appointment with Kristina Gräbner now online or at T +49 7544 966-200.
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