Three factors that are driving the best wholesalers this year

    wholesalers

    “What is driving the wholesaling sector in 2014?” I was recently asked. The first three factors that came to mind were: insight, partnerships and technology.

    Who’s getting it right in wholesale?
    • Booker: Driving the own-label category with brands such as Family Shopper.
    • JJ Food service: The company’s Foodit package is giving its customers websites, online ordering and social media.
    • GoKart: The mobile app by Anx Patel is bringing unique products to market with direct ordering by smartphone.

    These are three themes around which we have pinned this year’s IGD Wholesaling conference, with the programme giving plenty of coverage to each. 

    In my role at the food and grocery research charity IGD, I am privileged to get an inside look at many parts of the channel: wholesalers, retailers and manufacturers, too. 

    I can see these three factors at work everywhere in the sector, not just in the obvious ‘in your face’ initiatives but in more subtle ways too. What’s best of all is when they overlap and work together to create a virtuous circle to reinforce each other.

    Which comes first then? What’s the trigger among this holy trinity for doing things better? Well, as an analyst, I would always say insight!

    Insight: The trigger for doing things better

    While a lot of people might object that the wholesale channel does not do ‘big insight’ (masses of data), I would contend it’s more knowledge-rich than any other sector of food and grocery. In fact, I’d say that people in wholesale know more about their sector than others do about their ­markets.

    From personal experience, I know that talking to those in the sector about insight into the wholesale channel is not easy – but the great thing is that I always come away from a meeting knowing more than when I went in.

    Of course, there’s always been a wealth of insight in the channel, but now people are more motivated, and able to unlock it and then use it. And it’s this that’s making the difference.

    The critical aspect of business insight is to identify what can be done to make a business fit to compete. One dimension of this is to know what best practice should look like in order to get you into the ball game; the other is to see what should be done differently to ensure a competitive edge and put you ahead.

    So with insight as the trigger, it’s then the technology and partnerships that make it all happen.

    We’ve seen plenty of best practice use of insight in recent years. Improving ranging, implementing promotions, focusing on value and improving store standards are all critical in bringing the right products and services to consumers. This insight is being cascaded through the chain, with increasing levels of alignment between supplier, wholesaler and retailer. It’s now clearly accepted that this is how things must be done and it’s being done.

    But what’s really great to see as well is the growing insight into and implementation of what should be done differently. That’s because this differentiation puts the channel on the front foot compared to its main competitors among multiples.

    The inspiration for this differentiation comes from many avenues. It could be Boost Drinks only supplying the wholesale channel with a certain brand or an individual retailer hunting down a range of products to target a specific community or ex-pat group in its area. This demonstrates they recognise the value of differentiation and the urgency to supply it.

    No laggards themselves, wholesalers are grabbing the opportunity to add something unique, building the own-­label category and pushing it hard. Now we see block merchandising of own-label products in independent stores and there’s even a predominantly own-label symbol focus in Booker’s Family Shopper.

    Partnerships: An essential mechanism

    We all know that wholesaling is about relationships – it’s a small world. Customers know the wholesalers and wholesalers know the customers, with trust and respect on both sides.  Building on these foundations, partnerships are the logical next step and there’s a lot of them about. Symbol groups and retail clubs bind retailers, wholesalers and suppliers together for mutual ­benefit.

    As these partnerships become more effective, the better they become as an interchange for insight and for the implementation of ideas. The sense of people working together in the channel has never been more prevalent.

    Along with the implementation of trading activity, the role of symbol groups as a channel of communication is really coming to the fore, with retailer forums, for example, becoming a burgeoning part of the sector. Passing insight up and down the chain, offering ideas and inspiration, is bringing the players in the supply chain closer together.

    Technology: Bringing everything together

    This is the sort of thing that the internet was made for, so technology is also a massive enabler in all this. The young generation of independent traders have grown up with social media and this comes naturally to them, while many of the older generation are also keen to catch up, so as not to be left out.  

    And it’s not just industry-sponsored networks that are thriving. Sites such as LinkedIn and the groups it hosts also offer wide ‘unregulated’ scope for ideas to flow.

    As well as democratising the flow of ideas, modern media are also capable of driving differentiation in action. The portal provided by GoKart, the mobile B2B platform launched by Anx Patel, offers a ready-made solution to bring independent traders and small suppliers together, enabling many unique and local products to find a route to market as never before. Offering direct ordering through any smartphone, the GoKart app makes this all so easy!

    Of course, when we talk of technology in wholesaling it’s so often JJ Food Service that stands out. Reviewing 2014, it’s clear that it continues to lead the line. The launch of Foodit, established by tech guru Rifat Kiamil, looks to be another inspired pointer to the future. Offering a total online marketing solution to the independent restaurateur and fast-food operator, Foodit gives the JJ customer a website, online ordering, social media engagement and management – all in a single package.

    People looking at the independent foodservice channel have often commented that the segment lacks the support structures seen in independent retail, such as symbol groups. Well, obviously, independent caterers are a highly diverse bunch, so it’s not easy to mesh into group trading practices and ­identities.

    However, with the sort of ‘behind the scenes’ support that Foodit can provide, it’s starting to look like a mechanism that can really bring these independent traders together in a way never seen ­before.

    Not only does it tie technology and partnerships together in a brilliant
    virtuous loop, Foodit also has scope to bring new insight to the equation through the data it can capture.

    Insight, partnerships and technology – long may they thrive! I rest my case. 

    For more information on IGD’s wholesaling and foodservice research, visit: www.igd.com/wholesaling

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