For wholesalers and independent retailers, venturing online may be more akin to opening Pandora’s Box, writes JASON FINCH
There are many brutal lessons to learn when you start doing business online. Let’s briefly jump back to 1995. Amazon has just sold its first book and I’ve been trying to convince the UK’s high street retailers that the internet is more than a fad.
“You’re a very enthusiastic young man, but nobody will ever buy our products on this thing you call the world… wide… web,” laughs one of the board directors of a major department store chain.
Today, plenty has changed. My nephew looks perplexed when I tell him we used to dial in to the internet. He doesn’t remember a time when his connection had wires. He can’t grasp how we survived without computers that fit in our hands. He doesn’t know a world where he can’t instantly see the price and stock availability at his favourite shops or where he’d have to leave the house to buy music. He’s nine.
Because few wholesalers really did anything online until recently, wholesale has, unlike the world of retail, been largely unaffected by the rise of the web and emerging technologies. But a little snowball is now rolling gently down the mountain, so brace yourself.
Perceptions of your business
Business-to-business wholesale and high-street consumer retail may be a world apart, but the impact that online trading has had on retail over the past decade involves a set of experiences worth reflecting upon if you’re wondering how the web is going to affect business in wholesale.
Perceptions of your business as it starts to operate online will not be driven by customers’ previous experiences with you, but by those with Amazon and other major online players. Customers use the internet in their personal lives and have expectations generated by the online world about price-transparency, honest product reviews, up-to-date and usually real-time information, fast customer-service response times, accurate stock-level reporting and getting what they actually ordered.
The key lesson retailers learned is that an understanding of the possibilities brought about by new technology needs to weave through every part of the organisation, including the board. Retail websites usually started life as projects in one department – commonly, IT or marketing. Retailers are now a fair way ahead in this journey, and they all see they need a single view of customers and stock across all departments and sales and services channels – things simply don’t work unless everyone is talking.
Some common internal boundaries need to come down in wholesale – sales: meet IT; marketing: meet operations. All must now liaise about technology. Unless you deal with this early on, the road ahead will be painful and full of enormous potholes. It’s a huge cultural shift for most companies.
In retail, many things flipped on their head. Suppliers were no longer the puppet-masters, with customers merely dancing to a tune the marketing people had written. It became about what customers wanted to buy, not what retailers needed to sell. Processes that seemed set in stone and timescales on which industries worked were all redefined. Retailers asserting that “it’s just the way it is and will always be” largely became extinct.
The recent rise in convenience retailing has been driven by customers and not forced on them by retailers or suppliers. Customers rule the roost now. Although I’d suggest this industry is led by suppliers and wholesalers and not by retailers or consumers, I wouldn’t dare to assert that isn’t going to change.
Our message to retailers in 1995 was adapt or die: don’t just do the same old things but with a website. The message hasn’t changed now that it’s 2013 and we’re working with wholesalers.
Jason Finch is the co-founder of Port80. The UK’s first business to combine internet software development and direct-selling retail consultancy, Port80 now focuses on wholesale and is working closely with Palmer and Harvey and other wholesalers that want to benefit from real-time data.
