Key Focus Areas for B2B Distributors in 2019

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Mihir Kittur, Co-founder and chief commercial officer at UgamMihir Kittur, Co-founder and chief commercial officer at Ugam

Disruption in B2B is not new. What's new though, is the echoing acknowledgment of this disruption and the realization that something needs to be done now. Last year, many distributors demonstrated early momentum in meeting the needs of the evolving buyer, preparing for digital commerce, and combatting fierce competition. However, to win this changing environment, distributors will need to accelerate these efforts, or even kickstart new initiatives to do more than just keep up the momentum.

Here are some of the likely customer-facing focus areas for B2B distributors in 2019:

1. Hiring the Right Talent

Hiring someone who has succeeded in similar disruption, or has driven digital transformation, and has built strong teams with digital capabilities will be important. Leading distributors have looked beyond B2B for such talent and have effectively hired from B2C companies. This will likely continue in 2019 as distributors embark on their digital journey.

2. Understanding the Buyer

Know thy customer is a commonly used expression we're all aware of. But today, with omnichannel becoming a reality, B2B distributors are struggling with understanding and engaging with customers along their buying journey. It will be important for distributors to invest in segmenting their buyers and understanding what they’re looking for. One of the top priorities for distributors this year will also be to retain and grow existing customers, in the face of tough competition.

3. Improving Customer Experience

B2B buyers are expecting more B2C-like experiences. Hence, many distributors have already taken steps to improve their e-commerce platforms and Product Information Management Systems (PIMs). This year will be about strengthening this experience to support better search and find across web and mobile. E-commerce leaders will invest in basic and enriched product information, giving buyers sufficient and relevant information to inform their purchase decisions.

4. Enabling Sales Associates

Today, B2B customers are connecting with sales associates much later in the buying cycle. When they do interact with them, they expect the sales associate to add value to their buying decision. Therefore, B2B leaders will invest in reorganizing their sales team structures as well as deploying tools that will help their associates collaborate better with their customers to create value.

5. Pricing Right

With new and nimble competition, price transparency increasing, the number of online SKUs growing and more recently, tariff hikes, it will be important for B2B distributors to have the right price for their customers. Unlike B2C, the purchase decision of a B2B customer is need-driven and therefore is not about having the lowest price or the largest assortment. This means distributors will need to turn to smarter ways of having the right inventory with the right prices at the right time. 2019 will see distributors deploying a data-driven pricing strategy to help them better understand competition, frequently modify prices using rule-based pricing and optimize pricing to maximize growth.

6. Growing Private Label

Private label helps distributors defend assortment and increase margin. However, in order to improve private label performance, distributors will most likely deploy data-driven ways to ensure their private label SKUs have sufficient, search-friendly product information, that shows up in relevant searches as alternates and is price competitive, despite the impact that tariffs might have on them.

This year, disruption will be the new normal. But before taking on any new initiatives or riding the wave of change, choices on where to invest and how to go about implementation will be key.

Mihir Kittur is co-founder and chief commercial officer at Ugam, a next generation data and analytics company.

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