Gilroy’s viewpoint: If wholesalers fail to innovate, there’s a huge risk they will be going backwards 

David Gilroy is the founder and managing director of Store Excel

To infinity and beyond!” The immortal words of Buzz Lightyear from the film Toy Story. Sitting behind these words is an inspiring journey of innovation and entrepreneurship. Released in 1995, Toy Story was created by Pixar and was the first computer-generated animation (CGA) feature film.

It went on to gross $373m at the box office worldwide and it changed the landscape of animation forever. Pixar had its origins in the 1970s with George Lucas and Lucasfilm. It continually struggled financially until becoming a separate company in 1986, when Steve Jobs invested $10m and took a seat on the board as chairman.

The company’s financial troubles weren’t over, however. By 1995, it had to do a deal the Walt Disney Company to help fund and release Toy Story. Disney recognised that Pixar, and in particular John Lasseter, their creative lead, had a skillset that they lacked and they wanted a piece of it. By 2006, The Walt Disney Company knew that CGA expertise was essential and it bought Pixar outright for $7.4bn. Disney treats Pixar as a separate standalone business unit and the merger is often quoted as one of the most successful in recent years. Pixar’s average box office gross per film is $350m compared with Disney’s at $324m. The innovative upstart has eclipsed the established incumbent.

Pixar’s connection to Steve Jobs is apposite. One of the great innovators of our time, he changed our world with Apple computers, the iPod and the iPhone. Most of us have on our person more computing power and connectivity than beyond anything we could imagine in the turn of this century.

Big-scale, adventurous innovation is exceptionally powerful. Jeff Bezos travelled a similar road with Amazon. He recognised early on the potential of the internet and, in 20 years, he completely revolutionised the way we shop.

To the extent that Amazon, starting from zero, is now pushing hard against Walmart to be the largest retailer in the world. Elon Musk, for me, is the greatest innovator of them all.

If you haven’t already, check out The Elon Musk Story on BBC iPlayer. This is a three-part lesson in how to innovate, survive and prevail against overwhelming odds. It should be on the school curriculum.

To create and scale Paypal is some achievement. To go on to found and build Tesla into a major-league vehicle maker worldwide is another level. At the same time, to successfully launch Space X and Starlink, eclipsing NASA technology, is beyond incredible.

Read more: Gilroy’s Viewpoint: Wholesalers need to be keeping pace with sustainability has it grows in importance

What is it that connects these people? Martin Zwilling, writing for Forbes, says: “The goal of innovation is positive change, to make someone or something better. Entrepreneurs need it to start and established companies need it to survive. The front end of innovation, or ‘ideating’, is the energising or glamorous part. The execution seems like behind-the-scenes dirty work.”

One of the most brilliant aspects of all of Amazon, Apple and Tesla is the applied operational excellence in scaling the product. To manufacture such high-quality leading-edge products and services in volume and in short timescales is seriously impressive. Elon Musk put himself right out there.

He took multimillions of dollars in payments from customers up front before he had built a single car. The pressure was then on to deliver. After much angst and turbulence, Musk positioned his desk on the factory floor and personally supervised production until he was satisfied that it was running effectively to achieve output targets. Ideas are the front part, but execution and scalability are vital for success. Jobs, Bezos and Musk were fully immersed in the detail of their respective projects until happy that they were operationally robust. The connecting thread is innovation driven by technology, operational excellence and a relentless focus on the customer.

Martha Lane Fox, who co-founded Last Minute during the dotcom boom at the turn of the century, says: “We ain’t seen nothing yet with tech.” She and other informed commentators seem to agree that digitising business needs to be the arena for innovation. Where are the innovation and digital opportunities for our industry?

Steve Jobs, launching the iPhone in 2007, declared: “Every once in a while, a revolutionary product comes along that changes everything.” ChatGPT is a language model developed by OpenAI. This technology is the latest innovation set to have a major impact on business. Hamish McRae, writing for the i newspaper, predicts ChatGPT will transform the service industries making them vastly more efficient.

Danny Forston, for The Sunday Times, writes: “Software appears to be taking a giant leap up the ladder of jobs that, until a few months ago, could only be done by humans.”

Taking the theme of digitising, ChatGPT seems to offer the pathway to massively improving efficiency and service in customer-facing roles. Apply it to telesales: voice recognition, order prompting, order taking, up-selling, cross-selling and substitution recommending. All at high speed and open 24/7. Apply it to the field sales force making it better informed, smarter and more effective: outlet reporting, information gathering, order placement, intelligence recording, competitor activity, unique customer requirements and feedback. This unlocks the real power of the human assets.

Here’s a few slightly controversial digital innovation thoughts on procurement and payment as inspired by Ilija Ugrinic at Proactis. Spurred on by the constraints of Covid-19, he states that more than 80% of major businesses are seeking to digitise their back office. This means junking the spreadsheets, opening up and giving suppliers direct access to the product files. There are manpower savings to be realised by providing suppliers access: to ensure that their own details are correct, terms of trade are accurate, product details updated, range changes queued, barcodes and product links up to date, promotions plotted and cost price increases granulated.

This could go as far as allowing remote order placement within an agreed set of parameters. Pushing the boat right out, how about an industry-wide framework of product categories and product abbreviations that, in turn, would regularise data analysis?

John Reay, of Rewrite Digital, writing in The Sunday Times, emphasises the need for businesses to innovate by looking outside of their sector. “B2B should be looking at B2C and what they’re doing because that will come next, so it will give you a better idea of what needs to change in your industry,” he suggests.

Let’s apply this thinking to many of the checkout operations and e-commerce platforms across our industry. Thinking about customers first, how do we give them a smoother experience? Payment at tills is a must. Eliminate cashpoints. Offer the full range of payment methods, including open banking at the point of payment. Install a self-scanning operation and extend this to personal mobile-device scanning.

Given that many wholesalers are broadening their customer bases, the e-commerce experience needs to be upgraded. Payment at the completion of the order is essential. Of course, the VAT element needs to be included and clear. People expect to be able to pay at the point of order. Therefore, a full understanding of product availability at the point of order is vital. By all means have the product on the view, but grey it out and restore it when it is back in stock. Include an expected in-stock date.

Innovation inspires, excites, scares and threatens in equal measure. It leads to change, which, in turn, stirs the blood. Strap yourself in. If you never innovate, you risk going backwards.

The final words are from Martha Lane Fox. She says: “Business models keep changing and companies need to keep innovating to survive – most acutely, those that are customer-facing. Look at the rapid flight of the younger demographic from Facebook to TikTok – the advertising dollars have followed.”

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Paul Hill is the Editor of Better Wholesaling. He can be found on Twitter at @BW_PaulHill, or contacted via and 07960935659.


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