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Challenges in the wholesale business

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What wholesalers now need to keep in mind

According to a study by Roland Berger, 54 % of the wholesales who were queried feared a hazard to their current business model from digitization. In response, 67 % are expanding their digital sales channels so that they will remain successful in the future as well.

This shows that digitization brings opportunities and risks in equal measure for wholesalers. Add to this a change in buying behavior, different expectations on the part of customers, and unexpected market dynamics across all sectors.

This is then the overall pattern that the classical wholesale business finds itself in. While their position as the interface between the production companies and businesses was unchallenged for many years, wholesalers now have to face up to new challenges. But what exactly is this all about, and what do the strategies for solutions look like? Here are a few examples!

Omnichannel strategy instead of a linear sales chain

The sales sequence was clear for many decades: The producer sells to the wholesaler, who in turn sells the goods to companies that do business, such as tradesmen or service providers. Contacts usually followed the time-proven channels, and a catalog or a simple flyer was sufficient for marketing.

Today, the customer journeys to wholesalers are much more complex. Digital solutions have multiplied the potential touchpoints, both in marketing and sales. For that reason, wholesalers need an omnichannel strategy so that customers can continue to beat a path to their door. This applies in particular against the background of competitors doing the exact same thing and thus the products can be compared to the maximum extent. Digital service offers additionally make it possible to address new target groups or even open up international markets.

How can software help here? A contemporary software solution such as SAP S/4HANA makes it possible to manage all the channels of a wholesaler from just one platform. This includes items such as online shops or marketplaces, but also affiliates, classical sales or Field Service Management, which can even be integrated in a mobile way by means of Cloud solutions. In the best case, various price functions or also cross selling can be controlled in a uniform way with just such an application.

Optimize readiness to supply for more customer satisfaction

If wholesalers wish to be more transparent and thus more comparable, then the ability to deliver is as important as the properties of the products themselves. Who wants to wait a long time today?

It is expected that it is possible to be reached and to deliver round the clock; the readiness to supply must in addition be guaranteed at any time. For that reason it is a matter of properly functioning logistics and well thought out supply chain management. The prerequisite for this is modern software, that, for example, networks shippers, suppliers and one’s own company, and at various locations. In the best case, this makes possible uniform inventory and logistics management with the best possible overview.

Flexibility and agility – but only with a modern IT landscape

Comparability and extreme demands on logistics intensify the competitive pressure on the wholesaler. For that reason, wholesalers need two specific properties at their core so as to remain successful in a dynamically changing environment: agility and flexibility.

Being agile and flexible means leaving the tried and true methods and quickly making decisions on alternatives when it comes to your own success. Solutions in the form of a Cloud deployment, such as SAP S/4HANA Cloud, are especially helpful in the digital age. This Cloud-based ERP system works convincingly thanks to SAP Fiori and not only because of modern usability, but also because it is highly scalable. The ERP functions can be expanded or cut back, depending on the business situation; additional Cloud services can easily be acquired.

Don’t worry about the Cloud!

Many people in responsible positions hesitate to make a change to the Cloud. Here the typical concerns are unfounded and are often based on prejudices. In particular, the shift from on-premise to the Cloud has become very feasible in the meantime, as shown by SAP S4/HANA. A service package of their own for a successful migration is available for companies in the form of RISE with SAP. In addition, decision makers can markedly relieve the workload on their IT department by using Managed Services for Cloud solutions.

Where will things go in wholesaling?

Wholesale companies that wish to be successful in the market in future have no option but to make use of digital solutions. The most important thing of all here is a modern ERP system that can be used as a starting point for further digitization projects. Once the ERP has been updated, additional areas such as Procurement or Finance , for example, can be made fit for the future through the use of digital solutions.

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