Ivan Durkin asks what wholesalers can learn from the retail sector’s trial and error with IT.
We might think it’s tough in wholesale. But it’s even tougher for retailers – they’re trying to woo and retain whimsical, critical, trend-following customers in a savagely competitive marketplace.
It’s no surprise, then, that they’ve experimented more than wholesalers have with cutting-edge applications of information technology in a bid to improve efficiency, entice and engage customers, and optimise profits.
Inevitably, the results experienced by these ‘early adopters’ have been mixed, but many IT systems have now been proven in a commercial environment to help increase sales and customer loyalty, improve productivity and control overheads.
Now, as the traditional lines between retail and wholesale become ever more blurred, it’s time for wholesalers to benefit from retailers’ hard-learned lessons. So what works?
IT is convenient: Nurture customers’ ‘lazy loyalty’
Retailers have long understood that ‘lazy loyalty’ is one of the most profitable customer relationships a business can nurture. By making your operation the easiest from which to keep ordering, busy customers are less likely to want to seek an alternative.
Web ordering: No matter how long their wholesalers are open, some caterers or retailers struggle to conduct a stock-take and make an order in time. The cost of a 24/7 telesales service is unjustifiable for most wholesalers. More affordable is an online ordering service, which allows customers to make orders whenever – and from wherever – it suits them.
Setting up an online ordering system also creates a flexible, cost-effective online catalogue. Making stock information readily accessible reduces the time staff spend handling customer enquiries; there’s no postage, and prices and availability can be edited at no cost.
Critically, web-based promotions target customers when they’re in ‘purchasing mode’. The increased effectiveness of special offers alone can pay for a new system.
Click & collect: Fulfilment by delivery can see profits significantly undermined by staff and fuel prices, and it might not suit customers, such as mobile caterers.
An alternative successfully tested by the likes of Asda, Sainsbury’s, Tesco and Boots is click & collect. Here, the order is picked by the wholesaler within a set time – typically three hours, although Boots is trialling ‘next day’ – and made available for speedy collection at the customer’s convenience.
The reason for its uptake is clear: the retailers’ picking teams are doing the shopping, so aisles are less congested and queues shorter – something that growing wholesalers will particularly appreciate, as it can remove the need for additional depot space.
IT fulfils faster: From shelves to delivery
Of course, the full benefit of these systems can only be realised if you minimise the cost of laying on picking and delivery services.
Hands-free picking: Radio frequency (RF) systems can help. Although a full RF network is not cheap, prices are falling quickly and the returns are impressive.
Take a look at foodservice operator L&F Jones. Its picking team saved a day a week using a wrist-mounted RF system. This cut the downtime necessitated by collection of paper-based orders. It also enabled them to make live stock enquiries, note order status, and immediately rectify errors – increasing productivity while reducing inaccuracies.
Route planning: Route planning systems help wholesalers such as Venus Wine Spirit Merchants to set up default lorry, driver and routes for each day of the week, and assign customers to the most appropriate set route. They also help with load planning – organising deliveries in logical batches that advise the loaders of pallet and cage requirements – and enable the efficient loading of vehicles.
This speeds up loading, saves on fuel and driver time, and gives customers a schedule they can plan around.