So many old clichés are used today: ‘The times they are a-changin’; ‘It’s a new normal’; ‘We need to think outside the box’… Well, I have another one: ‘We need a new box’.
I have observed many respected and successful entities in our industry announce and implement novel strategies that, if they succeed, will position several of them into a ‘new box’. This might mean greater percentage of private label, shifting sales resources away from the traditional OP channel, entering new markets via a non-traditional sales model, and more aggressive M&A into new product categories.
Lack of collaboration
The lines are getting increasingly blurred now among wholesalers, buying groups, marketing groups and manufacturers, and there is a lot of talk about collaborating, making sea changes and embracing the independent dealer community (IDC). But when it’s time to actually do something, some people are pushing back from the table due to a lack of trust and a feeling of insecurity about the idea of having to make changes. Everyone wants progress, but they do not want to have to change in order to achieve it.
Meanwhile, our industry is evolving faster than anyone ever imagined: IDC attrition, manufacturer consolidation, wholesalers’ shifting sales and marketing strategies that foster indecision and possible conflict, big box retailers seeking relevancy, new entrants into the traditional OP space… the list is long.
Disparate consolidation is happening, at times out of desperation and without a plan. However, I am encouraged to see some initiatives that help create market opportunities for the IDC from the dealer groups and wholesalers. That said, what is counterproductive at times is when we are competing against each other to gain a larger slice of a shrinking pie.
And let’s throw this into the mix: Amazon now has a US Communities contract. I guess you could say that the online giant too has found a new box! My overriding feeling is that, sure, this should be concerning to the IDC, but not shockingly so. Amazon has been encroaching into the SMB space for a while, and now the public sector space is its next prey.
Will the same level of transparency and pricing inspection that Independent Stationers (IS) was subjected to by US Communities (because of the Office Depot sins of the past) be a contract requirement for Amazon? Or will people just look the other way and allow taxpayers to become the victims of lack of pricing transparency and effective contract monitoring? I hope not.
What I have found to be somewhat more alarming than Amazon’s recent public sector contract is a November 2016 report published by The Institute for Local Self-Reliance called Amazon’s Stranglehold: How the Company’s Tightening Grip Is Stifling Competition, Eroding Jobs and Threatening Communities. Amazon has the potential of becoming a modern-day economic Trojan Horse. The report emphasises how the e-tailer is monopolising the economy, undermining jobs and wages, and weakening our communities far more than we experienced with the birth of the big box retailers and the growth of Walmart.
The Amazon ‘habit’
I recently also heard that Amazon has become more than a company – it has become a ‘habit’. Check it out at www.ilsr.org and see what you think. If you share some of the concerns expressed in this report, ask yourself who is enabling, encouraging and satisfying that habit?
I am optimistic that many dealers will compete effectively against Amazon. They are growing share within their own markets, delivering more products and services than ever before, and providing genuine solutions. These dealers are great marketers, proud of their brand, and able to meet the needs of their customers – all with a personal, local touch.
That said, now is definitely the time for us in the IDC to find a new box. So how about stronger relationships with key suppliers in supporting their valued brands and more synergistic programmes with the industry’s wholesalers for all dealers in the channel? Let’s eliminate redundancies among manufacturers, system providers, wholesalers and buying groups, and focus on creating true value-add growth initiatives – and not at the sacrifice of each other’s goals.