The commercial benefits of online ordering are clear, but for social media it still remains to be quantified, writes PATRICK MITCHELL-FOX
Wholesalers are rapidly embracing the digital age and the changes it brings, but in many areas the long-term outcomes and impacts are still far from clear. Certainly online ordering is charging ahead as a developing commercial necessity, but then what of the much-vaunted social media?
The progress of online ordering can be readily measured: £700m+ of Booker online sales (growing at 11%) shows the eagerness with which many of its customers have adopted the internet as a transactional platform. Other wholesalers, such as Bestway and Palmer & Harvey, also talk of high rates of growth.
Online ordering, above all, is changing operating models – accelerating the shift in service towards delivery in cash & carry, while alternatives such as ‘click and collect’ are now also gaining ground. Both Booker and Bestway offer ‘click & collect’ and Blakemore Wholesale has followed, launching its service across seven depots.
Some dedicated cash & carry players such as Dhamecha and Parfetts remain resistant to online ordering for the moment, but it can only be a matter of time. For these operators, seeking to retain their traditional low-cost operating advantages, the success of developing ‘click & collect’ will be paramount to sustaining their pricing advantage over their delivered counterparts once they do get online.
Figures from Bestway show that its online orders split 60:40 between delivered and ‘click & collect’, suggesting that online customers will favour delivery where it’s available, adding greater cost to the wholesaler.
Therefore, it is critical for cash & carry operators drive the uptake of ‘click & collect’. Here the example of trailblazer JJ Foodservice may offer the model for success, providing differential pricing for variant service
options, making ‘click & collect’ appreciably cheaper than delivery.
Benefits need to be quantified
In contrast, when it comes to measuring the success and impact of social media on the wholesale sector things are far less clear, and the commercial benefits are very hard to quantify.
Nevertheless, surely in a sector where relationship selling is paramount, the social media are a natural fit for businesses keen to build and maintain personal links with customers?
For a smaller business especially, social media offer a means to gain an equal presence with larger competitors. Take, for example, MJ Baker Foodservice, an exclusively regional operator in the South-West. With over 900 Twitter followers it has as many as the national foodservice giant Brakes (the subject of some good natured ribbing on the Brakes feed).
However, while many UK wholesalers now have a corporate presence on both Facebook and Twitter, even some of the biggest operators, such as Bestway, 3663 and Landmark, are yet to engage with them.
Certainly no one could claim that the audience for social media in wholesale has actually exploded just yet.
One of the wholesalers with the biggest following on Twitter is Booker, with 3,056 followers (at the time of publication). As the core Booker business has almost half a million customers its Twitter following at most represents around 0.6% of its customer base.
Of course some followers (such as industry-watchers like me) will not be customers, though many certainly are, and the Booker feed clearly does offer an active platform for interaction both with customers and with other interested parties like journalists and investors.
Overall it seems that we may be some way from social media re-shaping the UK wholesale sector. That said no one can doubt that the broader role the internet can play in building forums and interest groups will definitely play a critical role in the future of wholesaler customer engagement.
Perhaps in the long-term the social media platforms will lack the focus that the wholesalers require. While Facebook and Twitter are potentially useful for attracting new customers, it seems investment in exclusive, in-house forums, enabling closer targeting of registered users, may be a better vehicle for wholesale.
Patrick Mitchell-Fox is a senior analyst for the grocery research charity IGD