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Seeing into the Future at Promat 2023: Three Trends Transforming Distribution

50,000 manufacturing and supply chain professionals attended Promat 2023 in Chicago in March, where attendees got a glimpse into the future of distribution. Here, we continue the theme of what’s trending in the distribution industry.

April 18, 2023

Cloud-based ERP is giving distribution businesses unprecedented visibility, with empowered leaders making data-driven decisions. From the Epicor vantage point, we’re seeing distributors apply that intelligence by shifting the way they operate to improve results.

As they migrate to cloud-based ERP, distributors are more flexible, efficient, and adaptable. And they’re quickly seizing on  opportunities to create growth and diversification, doing business in ways that make them more competitive.

These three trends are driving change in the distribution industry:

1. Distro-Facturing/Distro-Retailing

Distro-facturing/distro-retailing is an emerging trend at small and midsize businesses (SMBs) where distributors diversify and expand their businesses to incorporate light manufacturing and retail sales to meet customer needs.

Moving to cloud-based ERP helps them transform in ways that make them more competitive with large enterprises. In fact, an Epicor survey found that 78% of 1,350 IT decision makers shifted their business model over the last year to better compete, while 56% of distributors surveyed said they offer direct-to-customer sales.

The emerging distro-facturing/distro-retailing trend suggests that more sophisticated cloud ERP software is motivating companies who have been in business for decades to shift operations quickly and cost-efficiently. They’re implementing delivery capabilities, eCommerce, configure-price-quote, and light manufacturing and retail, helping them thrive while managing ongoing supply chain challenges.

“Distribution companies should consistently evaluate their business strategy and adjust or expand offerings,” says John Carrico, vice president of Product Management at Epicor. “They’re able to shift to distro-facturing initiatives more easily with highly flexible cloud-based solutions,” he explains. “And careful planning with a technology partner that offers a solid implementation process and strategy can take them further in their efforts.”

2. Full Throttle eCommerce

Because eCommerce is vital in business, more distributors are creating experiences that align to the way their customers want to do business—virtually—with an intuitive, easy, online process built on their websites or customer portals. To help achieve this goal, businesses need software that has the functionality and integrations required for eCommerce success.

As younger generations move into business roles, they have expectations that B2B works like B2C, i.e., Amazon. They expect significantly more than just a way to buy on the web. They want an experience that’s tailored to their buying journey with personalization, educational content, and resources that support the full scope of their needs, instead of going through traditional channels. They want self-service.

“With ongoing supply chain issues and lingering effects from the pandemic, new expectations from customers and end users, especially for eCommerce capabilities, are now commonplace,” says Frank Heenan, Epicor group vice president - Americas. That includes buying directly from manufacturers—hence the need for distribution businesses to innovate.

Heenan describes the capabilities that distributors want, including:

  • Website management capabilities like designed templates that allow them to add content quickly and easily. They also need the ability to categorize content logically, optimize SEO, and provide multi-lingual/multi-currency/multi-storefront functionality.
  • Advanced search and navigation that makes it easy for buyers to find product and services content built into the website experience (vs. downloading cumbersome PDF catalogs).
  • Integrations, payment gateways, and pass-throughs to social media, shipping providers, and other selling platforms.

Distributors can also build customer trust and loyalty with online features. Heenan says that includes consistent branding, quality content and design, and ease of payment/refund/return processes. “Aging sites reflect on the perception of the business and can impact employee recruitment and potential new customers,” Heenan says. “Overall, eCommerce, especially when integrated with an ERP system, can create new revenue streams, automate workflows, and offer competitive pricing and delivery options that set you apart from competitors.”

3. Automating Customer Service

More advanced technology is also bringing personalization options for customers while driving efficiency for distribution businesses—a win-win. Distributors that automate supply chain processes can focus on activities that have more impact on the business.  

Here are examples of automation opportunities:

  • Add customer self-service management content/capabilities that lift non-revenue generating work from your customer service teams, such as account and order information.
  • Automate manual work order processes including work order generation and billing.
  • Create a portal for customers and vendors that offers self-service capabilities including service order status, new service requests, and the ability to capture work performed.

Learn more now about Epicor ERP solutions made for distribution. We can help you track toward the future and elevate your business performance today.