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A rising tide lifts all boats?

Positive growth within the economy is a benefit to the distribution industry, but only distributors that take action will succeed

By André Lacy -- Industrial Distribution, 5/1/2004

There's a current of optimism in the air. After some tough times, the economy is starting to move in the right direction. Every day, we hear more good news—positive figures on growth and employment. This recovery will unleash pent-up demand for goods of all kinds, from business supplies to consumer products. It's a great opportunity, of course, for our wholesale distribution industry.

There's an old saying, "A rising tide lifts all boats." Having said that, I'm not so sure it's true. It's hard to take full advantage of a rising tide unless you know how to sail. It's true that the recovery will help many of us. But some will work to tread water, while others will go under. Quite simply, success is predicated on taking action and taking risks based on the circumstances we're given. Those who are aggressive will succeed; those who coast in neutral will likely fail.

Business in the early 21st century will center on rediscovering the customer. That sounds basic, but with little inflation and an increasingly global economy, it is very much a level playing field. There's no tilt in your favor or to any other player.

On that field will be winners and losers. Finding new ways to connect with customers is the "X" factor, and it will separate winners from losers. So with this "rising tide," which are you going to be: winner or loser? Sink or swim?

To help us answer this question, we in the wholesale distribution business have an advantage that many industries don't: an energized, engaged trade association, NAW, which is working hard to provide us with all of the tools we need to seize the day. If we take advantage of the planning that NAW has undertaken, we'll all have a leg up.

Remember, an economic recovery doesn't guarantee success. We are continually concerned with existing competition and the perceived bigger threat of direct sellers and alternate channels entering over the next five years, because anyone can play on the field. The biggest threat I see to the wholesale distribution industry is complacency—satisfaction with being "good enough."

Ask yourself, "If I keep doing things the way I've always done them, how can I expect the outcome to be any different?"

And to me, all of these "different ways of doing things" should add to a single goal—adding value to our customers.

More than ever, we must get close to the customer. I see the customer becoming more knowledgeable. Think about it: You go into the automobile dealership and you know what the price of the car should be. You've got enough information to make the car salesman squirm.

His only hope, and your only hope as a leader in wholesale distribution, is to find out what the customer wants, and then deliver it. That's hard work, but it's the only way to be good enough at what we do to fend off the competition.


Author Information
André Lacy is chairman/CEO of LDI Ltd. Contact him at ablacy@ldiltd.com. Excerpted from NAW Executive Summit chairman's address, Jan. 27, 2004.

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