dollar shave club

Dan Dare is on the surface of the red planet. It’s hostile. He’s isolated, alone and in trouble. A toxic dust cloud is fast approaching. He opens his wrist video communicator to the mothership commander and orders an unmanned flight rescue vehicle to get him out.

Of course, this extract from a 1960s Eagle comic is pure science fiction. It will never happen, right? Wrong! It already is happening. As Albert Einstein noted: “Imagination is more important than knowledge.”

Technology is changing every facet of our lives. Take the way we buy plane tickets, hotel rooms, gig tickets and taxis – totally transformed, with the matching of supply to demand and the optimisation of yield now powered by smart algorithms. In business, the pace of change is either scary or exhilarating, depending on your point of view. It has taken most retailers many decades of painstaking store acquisition to build their businesses. Amazon has become a e-retail behemoth in 22 years, fellow ecommerce giant Alibaba has achieved the same in 17 years; and through technology, both companies are now putting serious pressure on the world’s leading ‘bricks and mortar’ retailers.

Dollar Shave Club (DSC) is the epitome of just how seriously business – including the wholesale industry – needs to take the threat of disruptive technology. DSC connects directly to its target consumers of young men through social media, by advertising with humorous, almost ramshackle videos that encourage content-sharing on YouTube. Through executing great service, this five-year-old start-up company has seen its revenue soar to US$240m (£180m). In the process, it has taken significant share from male grooming market leader Gillette, and has just been purchased by Unilever for US$1bn (£760m).

The internet, smartphones and location technology make market entry and exponential growth highly possible, and it’s not a big leap to see how the DSC model could be applied to other categories. Owners of over-the-counter medicines, food supplements, female grooming, dental hygiene and petcare brands – to name but a few – have the scope to bypass retailers and get their products straight to the customer at lower cost. And this isn’t future-gazing – it’s a reality in the here and now.

At the recent Better Wholesaling Technology Summit, Josh McBain of global consumer trends agency Future Foundation, talked about how the path to purchase is changing. A visit to a bricks-and-mortar store is becoming more about the experience, and 43% of consumers now expect products to be brought to them.

This resonates with my recent experience in wholesale – there is a clamour for deliveries and an increasing openness to online ordering. Business customers want a slick web experience and same-day delivery; the desire to visit the cash & carry is diminishing.

So, should you be concerned about ‘creative destruction’? Too right you should be! Someone, somewhere is re-imagining how to run your business, and they don’t need an estate of warehouses to take a significant share. You need to be planning offensive defensive measures urgently.

The world’s most successful cab firm has no vehicles. The highest growth retailer has no shops. Could we soon see wholesalers with no warehouses?

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David Gilroy is the founder and managing director of Store Excel. He was previously the convenience retail lead at W2 Commercial and held operations director roles at Bestway Wholesale and Nurdin & Peacock.

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