STORIES FROM THE FRONT LINE:
The Cloud Addresses
Key Trends in Distribution
To the untrained eye, distribution may appear to be a
fairly straightforward industry—in all reality, however, it is
evolving more rapidly than ever before. From increased
competition and changing business models to a barrage
of new, innovative technologies, the way distributors do
business is starkly and fundamentally different than it was
even five years ago. In an age with such pronounced
structural change and competitive pressures, to risk not
changing is to risk failing.
There are five key trends distributors need to pay attention
to as they adapt and innovate to the changing industry:
1. The modern consumer is always online – commerce is
key for continued success.
2. Competition is everywhere, and they are more
innovative and tech-savvy than ever before.
3. Business models are rapidly changing as distributors
explore new ways of going to market.
4. Investing in technology is critical for the success of every
type of business, not just the Amazons of the world.
5. Enabling employee productivity—particularly among
millennials—is critical for achieving long-term goals.
If distributors thought the advances in business
technology, increased prevalence of online buying and
changing business models were not a factor, then they
need to think again, and think again fast. Given these
key trends impacting the industry, investing in the
appropriate technologies to address them effectively
is absolutely critical for continued success. By learning
about the trends, the businesses thriving in the midst
of them and the technology available to address the
trends, distributors are arming themselves with the
knowledge they need to remain competitive.
#1. Your Target Market is Online,
and You Should Be Too
#2. Competition is Everywhere and They are
Leaner, Meaner and More Tech-savvy Than Ever
#3. Business Models are Rapidly Changing
#4. Investing in Tech is Not Just for the
Amazons of the World
#5. Employee Productivity—Particularly in
the Millennial Generation—is Critical for Success
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
Customer Spotlight: Becker Safety & Supply
#1. YOUR TARGET MARKET
IS ONLINE, AND YOU
SHOULD BE TOO
The modern consumer, across every part of the
supply chain, turns to the internet as their source
of knowledge for purchase decisions—that said,
a strong online presence is crucial for continued
business success, both in the world of B2B and B2C
commerce. Ecommerce continues to be a key trend
and distributors need to be ahead of it if they want to
remain relevant and fresh in the face of major industry
changes. No longer is seeking an ideal customer
experience restricted to the online shopper—business
buyers and online shoppers alike look for the kind of
omnichannel experience that gives them flexibility and
power in their purchasing. As a business, capitalizing
on this customer experience means catering to both
your direct buyers and shoppers with an ecommerce
tool that can provide functionality for each market.
HEAR IT FROM THE BUSINESSES LIVING IT
Becker Safety & Supply is a perfect example of a
company experiencing growth in ecommerce and
new B2B markets by capitalizing on new commerce
technology. Using NetSuite’s cloud ERP, Becker’s sales
reps seamlessly interact with leads and customers via
the CRM. Additionally, a new ecommerce site based
on NetSuite’s SuiteCommerce Advanced, linked to
Becker’s instance of NetSuite Inventory and Order
Management, will expand geographic reach and meet
customer demand for 24/7 online self-service. By using
this new technology linking commerce, sales, inventory
and order management, Becker has greater agility to
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
Customer Spotlight: Tacoma Screw Products
Demo: NetSuite Ecommerce
withstand volatility in its core oil and gas market and
grow the business well beyond its current reaches.
HEAR IT FROM THE BUSINESSES LIVING IT
Tacoma Screw Products is another example of a company
extending its reach with NetSuite’s SuiteCommerce in B2B
and B2C markets. By opening an ecommerce channel,
Tacoma Screw complements its outside sales force and
16 brick-and-mortar stores in Washington, Oregon and
Idaho and has captured new B2B and B2C business
across all 50 states, with some international orders. The
ease and efficiency of online ordering across 45,000
SKUs improves cost efficiency for both Tacoma Screw
and its customers. It has also enhanced its omnichannel
experience by offering buy online/pickup in store service,
which is particularly popular among contractors needing
to stock up for the next day’s job. In combination with the
SuiteCommerce Customer Center, which provides B2B
buyers with robust self-service purchasing power including
full account management, visibility into order status and
history, and role-based purchase approvals, Tacoma Screw
Products is using its commerce technology to cater an
omnichannel experience both to its direct end shoppers
and business buyers.
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
#2. COMPETITION IS
EVERYWHERE AND THEY
ARE LEANER, MEANER
AND MORE TECH-SAVVY
THAN EVER
In today’s distribution landscape, it is only getting
harder to differentiate. With the ever growing number of
competitors, how do distributors position themselves as
unique and stay a step ahead? What trends are affecting
the industry, and how can distributors capitalize on them?
Assessing and reassessing these questions on a regular
basis is absolutely essential for continued success in
the constantly evolving world of distribution. Businesses
need to remain agile and poised for change at the drop
of a hat in order to compete against the fast-moving,
innovative competition. If a distributor wants to quickly
add a new product line, onboard a new supplier for a
same day order or get their product to the end buyer as
quickly as possible, then they, without a doubt, need the
technologies in place to cater to rapid pivots. There is
no leniency to allow for the costly time associated with
manual entry, disparate systems and dated technology.
HEAR IT FROM THE BUSINESSES LIVING IT
Action Health wanted to take its business to the next
level to blow out the competition, but the reality was
that the system it was running wasn’t going to support
the goals and plans the company had. When the CEO
posed the question “What’s the risk involved in changing
the system we are using to run our entire business?”,
Sean Cwynar and Phil Negri, the President and CFO
respectively, turned it around and asked “What’s the risk
in not changing?”. If they had stayed the same for much
Watch the Action Health customer story
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
longer, they knew they would become obsolete—which
is why they turned to NetSuite’s single, cloud ERP to run
everything from financials and CRM to inventory and order
management. After adopting a new system and positioning
themselves for success in the modern world of distribution,
Action Health has achieved double digit growth in the
health care market.
#3. BUSINESS MODELS
ARE RAPIDLY CHANGING
With companies like Lyft, Netflix, Spotify and Airbnb
disrupting business models and changing the way
consumers operate day-to-day, it’s not surprising that
distributors are exploring new ways of going to market
and pivoting their business models to capitalize on new
markets. Between the internet’s pervasiveness among
modern consumers and the constant flood of technological
advances in the business world, companies have to
change the way they operate at their core to hold up
against their competitors. How businesses sell, source and
create their products is constantly evolving—implementing
these rapid changes requires business systems that can
stand up to these rapid pivots. For this reason, more and
more businesses are turning to cloud-based technologies
Customer Spotlight: PACT | ORGANIC
to run their front- and back-end business processes. With
a cloud solution, businesses are always running the most
up-to-date version of the product and accessing real-
time information about their business—which is hugely
important for a modern distributor trying to stay agile.
HEAR IT FROM THE BUSINESSES LIVING IT
PACT | ORGANIC started out selling through its B2C
website and through retail partners, like Whole Foods
and Target, but it had set its sights on bigger things—
leadership wanted to pursue a more expansive go-to-
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
market strategy. PACT is refocusing its retail presence on
larger B2B retail partners and is working on expanded
ecommerce initiatives to improve offers and retargeting,
all the while further enhancing business intelligence
with more detailed analysis. PACT turned to NetSuite’s
cloud ERP to manage its fair trade-certified supply chain
and to oversee complex financial relationships and
inventory at every step, from organic cotton procured by
manufacturing partners in India to finished goods at 3PL
locations, to ensure visibility across the supply chain.
PACT also uses NetSuite to manage growth and to
amplify its footprint across its ecommerce channel and
international markets, while simultaneously minimizing
waste through a true Just-in-Time (JIT) inventory model.
#4. INVESTING IN TECH
IS NOT JUST FOR THE
AMAZONS OF THE WORLD
In order to remain competitive, distributors need to
continue upgrading their work environments and stay
on the cutting edge of technology. Gone are the days
of paper pushing, Excel spreadsheets and manual
processes—tablets, warehouse scanners, B2B portals
and cloud systems are changing the game and making
Hear more from PACT | ORGANIC
the modern distributor warehouse sleeker, cleaner
and more efficient. Based on where we are today,
simply thinking about making these changes is no
longer an advantage; rather, it is imperative for survival.
When your competitors are constantly evolving, to be
complacent is to risk failure.
HEAR IT FROM THE BUSINESSES LIVING IT
Choosing a unified, modern cloud platform over
SAP Business ByDesign and Microsoft Dynamics GP
cleared Big Agnes’ path to innovation and growth.
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
The company was swayed by NetSuite’s flexibility and
scalability; in the aftermath, Big Agnes has doubled
productivity in order and inventory management,
fulfillment, and accounting, freed up staff resources
while avoiding hiring additional people, gained real-
time visibility into the business and improved customer
support quality. With this new technology at its
fingertips, Big Agnes is able to power the processing
of orders from Big Agnes’ retail partners and its
consumer-facing website, while NetSuite partner
Oz Development’s OzLINK shipping solution further
accelerates fulfillment. At the same time, investing in
NetSuite’s scalable cloud ERP has Big Agnes ready for
expansion into 20 countries.
HEAR IT FROM THE BUSINESSES LIVING IT
By moving to NetSuite’s cloud ERP, Philz Coffee made
the switch to a system powering accounting/finance,
inventory and warehousing, order management,
procurement and sales, and ecommerce—all in one
place. Since investing in a cloud ERP solution in May
2010, Philz’s revenue has soared 400 percent with
rapid growth to 13 coffee shops in the Bay Area and a
vision for hundreds in California and beyond. NetSuite
Watch the Big Agnes customer story
has helped Philz streamline and grow its wholesale
distribution channel to more than 100 buyers, including
Whole Foods, Virgin America, LinkedIn, Yelp, Facebook
and Google. Leveraging efficiencies gained in the cloud,
Philz is disrupting the Bay Area coffee industry and
improving its competitive position over much larger rivals
such as Starbucks and Peet’s. Philz has also invested in
NetSuite SuiteCommerce, which it uses for web sales of
30+ custom coffee blends to B2C customers in the U.S.
and internationally, with integrated order management
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
for efficient processing and fulfillment. At the same time,
NetSuite Inventory Management gives Philz real-time
visibility into stock in-stores and its 20,000 square foot
Bay Area warehouse, and gives store managers the
power to reorder as needed. The real-time capabilities
of NetSuite provides Philz management on-demand
visibility into key metrics such as margin, customer count,
average ticket, sales by store, labor costs and more, with
drill-down detail so that they are equipped to make the
best business decisions possible.
Read more from the Philz Coffee CEO.
#5. EMPLOYEE
PRODUCTIVITY—
PARTICULARLY IN THE
MILLENNIAL GENERATION—
IS CRITICAL FOR SUCCESS
Tech upgrades—although very important—are useless
without the employees to act on the efficiencies they
bring. Employee productivity for the modern distributor
is key to long term success, and much of that
productivity can be facilitated with new technologies.
Customer Spotlight: Philz Coffee
Warehouse automation, CRM, ecommerce, pricing
and analytics are just some of the updates modern
distributors implement to streamline their processes while
increasing employee productivity to improve the output
of their operations and free up their employee time to
focus on improving the business versus performing
manual processes. With more and more millennials now
holding B2B purchasing roles, the way B2B purchasing
is done is starkly different from previous generations.
Although some distributors may be slower to hire the
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
next generation, the reality is that their customers are
not. That said, equipping millennials with the technology
that they are comfortable with to be successful is key
for achieving the most productive work environment
possible and to sell most effectively.
HEAR IT FROM THE BUSINESSES LIVING IT
When Sourcingpartner selected NetSuite over Epicor,
it selected a solution that not only was up and running
on time and under budget in 95 days, but also was
ready for business from Day 1. On the new solution,
executives are able to easily monitor automated, mobile
inventory management practices on prebuilt dashboards
to reduce errors and streamline processes without
having to request complex Excel reports that could
take hours of employee time to generate. Customers
are also able to access real-time order and account
information through a secure, self-service portal, freeing
up employee time once dedicated to manual entry.
HEAR IT FROM THE BUSINESSES LIVING IT
Another example of a company simplifying operations
and increased employee efficiency is Advantage Sign
Supply. By switching to NetSuite’s cloud ERP, it has
streamlined their operations, empowering its workers
Customer Spotlight: Sourcingpartner
Customer Spotlight: Advantage Sign Supply
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
to shift their attention beyond manual tasks and taxing
processes. By allowing Advantage Sign Supply to do
business on the web and unify customer touchpoints
through linked CRM, ERP and ecommerce, NetSuite
has helped Advantage Sign Supply to:
• Cut order processing time by 66 percent.
• Decrease monthly inventory on hand by more than 15
percent ($500,000+ in inventory).
• Save $1,000 per month with electronic invoicing.
• Attract 50+ customers per month, accounting for 11
percent of revenues, with the new website.
• Cut time required to update pricing from two hours to
10 minutes for 500+ items.
HEAR IT FROM THE BUSINESSES LIVING IT
Acquisitions can also lead to bogged down business
processes and decreased employee productivity—for
instance, iAutomation charted an aggressive acquisition
strategy that came with a cost: the company was saddled
with siloed applications running in a fragmented IT
environment that provided little visibility. Productivity
suffered as staff had to manually access, import and
export data across multiple systems, while a lack of real-
Customer Spotlight: iAutomation
Hear more from iAutomation
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
time client information was causing needless delays
and lost opportunities for sales and customer service.
iAutomation’s 2008 acquisition of established NetSuite
customer, Integrated Motion, led it to the cloud platform.
When iAutomation decided to extend Integrated Motion’s
NetSuite environment to the whole business, the change
spurred double-digit revenue gains and significant
customer service improvements. iAutomation now enjoys
real-time data access across 11 offices, a streamlined
supply chain, optimized stocking and newly automated
sales and purchase order processes for increased
employee productivity overall.
CONCLUSION
Five things may not sound like much, but they are
completely altering the face of the distribution industry
and changing the way businesses operate, as you can
see from the real life company examples highlighted
here. Even just a year down the line, distributors may still
look different. With that in mind, it begs the question—if
change is imminent, then what are you waiting for?
For more on how NetSuite can help wholesale
distributors, click here to request a free product tour.
If change is imminent, then
what are you waiting for?
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Stories from the Front Line: The Cloud Addresses Key Trends in Distribution
www.netsuite.com/wd
[email protected]
877-638-7848
The Cloud Addresses Key Trends in Distribution
To the untrained eye, distribution may appear to be a fairly  straightforward industry—in all reality, however, it is evolving more rapidly than ever before. There are five key trends distributors need to pay attention to as they adapt and innovate to the changing industry.
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