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Looking Ahead: Distributor’s Post Pandemic Technology Investment Plans

There is no denying the effects the pandemic has had on business of all sizes and across all industries. The impacts were devastating to some businesses and unfortunately many are still recovering.

The pandemic forced all distributors — no matter their vertical, geography or end customer profile — to rethink their existing and planned technologies. It made them reassess how they have traditionally served customers and how they should do so moving forward.

Our partner, Infor, teamed up with MDM to understand how distributors will invest in technology post-pandemic. In May 2021, they surveyed more than 200 distributors and manufacturers who sell through distribution and service providers. Here we will break down the findings to help you make strategic decisions for your unique business.

Understanding Current Technology

It is important to understand the goals of the current technology distributors have in place. When surveyed during the height of the pandemic, it was clear that customer service was the biggest priority, even higher than profitability. The study found that 37.9% of respondents use their current technology investment to provide additional value or service to customers while 31.3% said they use it to improve overall customer experience. The survey also found that 15.9% of respondents use technology to improve profitability while 8.4% use it to improve internal communication and cooperation.

This goes to show that the customer truly does go first and in order to survive post-pandemic, it is crucial to meet their needs.

Effects on E-Commerce

Distributors that were able to pivot to e-commerce rushed to the front as customers put safety first and looked for ways to reduce their interactions with salespeople or walking into branches. The savviest of distributors, who had an e-commerce solution in place pre-COVID, were ready and able to keep their business going. Those who did not have an e-commerce solution in place quickly put systems in place in order to keep their business afloat.

Distributors saw a higher percentage of their sales come from e-commerce during the last 12 months compared to pre-pandemic, and they expect those percentages to rise in the next 12 months as B2B buyers continue to seek online shopping and purchasing based on habits developed during COVID.

Pre-pandemic, 16.3% of respondents said 11%-25% of sales came through e-commerce. That number grew only slightly, to 17.3%, for distributors during the pandemic. But that percentage spikes to 28.1% of survey respondents after the pandemic.

Distributors know their customers are shopping online and understand they need to be online to meet their needs. They either need to begin their journey now or hone in and advance their e-commerce solution.

The Importance of Customer Service and Customer Experience

Customer service and customer experience are always important to a business. During the pandemic though, this took a whole new meaning as the person-to-person interactions diminished and things went virtual.

Customer experience means different things to different distributors. For some, it meant offering touchless or curbside pickup during the pandemic. But for others — for those who deemed it essential to think about the future viability of their business, it meant adding online tools that enable easier shopping and purchasing from a distributor.

The survey found that 70.9% of respondents felt self-service shopping experience will be the most important tool in the next 12 months. Mobile shopping experience came in second at 56.9% followed by email at 55.9%. Close behind was chat on website was at 45.3% and self-service configurator or guided selling at 43.6%.

As you begin to plan for the upcoming year, be sure to keep these findings in mind.

Mobile and Cloud Adoption

Before the pandemic, mobile adoption was on the rise for many distribution companies. COVID-19, however, pushed mobile to the forefront and the survey looked at how this will affect distributors in the coming months. Almost three-fourths of respondents, 73.5%, said they would use their mobile devices for sales. More than half, 54.8%, selected inventory tracking (respondents could select more than one option), while nearly half answered with executive dashboards (46.9%), proof of delivery (46.3%) and field service (42.4%).

When it comes to cloud adoption, it is interesting to see how distributors are using cloud solutions. More than three-fourths of companies, 77%, have comprehensive cloud adoption for business solutions such as email, payroll, Zoom and other tools. However, that number drops to 65.7% — still decent but could grow — when it comes to cloud adoption for strategic solutions such as CRM (customer relationship management), BI (business intelligence), HCM (human capital management), WMS (warehouse management system) and others. And only 43.3% of survey respondents said they have attained cloud adoption for their ERP (enterprise resource planning).

The good news is only 9% of companies listed “none,” meaning cloud is on the radar of companies even if they have some work to do before reaching full adoption.

How Does This Effect You?

So, what does this all mean for your business? These findings serve as a guide for planning your technology investments in the coming year. Understanding how businesses like yours allows you to be strategic.

At NSA, we are here to help your unique distribution business catapult into the future. Let us help you make the right technology investments that will increase your efficiency and profits. Count on the NSA Touch to help you with your e-commerce strategy, mobile adoption, and cloud solutions so that you can break away from your competition. Contact us today to learn more.

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