Discussions from the European Distributor Conference by Guest Blogger Remi Ducrocq

If you've been reading much recently, you know how much we love KYKLO around here.  Today we are honored to have KYKLO Co-founder and CEO, Remi Ducrocq just us as a guest blogger.  He recently attended the European Distributor Conference and has agreed to give us his feedback.

Welcome, Remi!

Early in May, I had the opportunity to attend The European

Union of Electrical Wholesalers (EUEW) conference in Brussels. This organization, founded in 1955, is a 16-nation body representing the interests of the electrical wholesaling channel throughout Europe. 

During this meeting, I had the opportunity to attend a session conducted by Ian Heller of US-based Modern Distributor Management. His message was timely, poignant and was delivered in a manner that lingered well beyond the meeting and into an after-hours conversation.  Allow me to expand on this. 

Artificial Intelligence (AI) will forever change distribution. 
AI will enable sweeping efficiency shifts in the distributor operation. Examples include voice actuated CRM systems, autonomously driven carts, trucks (and even drones) used for delivery, and optimized storage in warehouses. While some of these seem futuristic, the technology already exists in some distributor ERP systems (like EPICOR’s P21) and is extending quickly into other aspects of the distributor world.

Breakthrough AI innovations are about to change the look of traditional inside sales and customer service groups. Technology in the near future will allow voice-based descriptions to be turned into catalog numbers for individual SKUs. Shortly thereafter, technology will enable a customer to use a smartphone picture to identify a part number; again, turning an untrained worker into a parts identification expert.     
Amazon will use AI in an attempt to control long tail spending of distribution customers.
Distributors must recognize Amazon’s ability to control the “long tail” of customer spending. For those not familiar with the term, long tail products are the odd, rarely requested items distributors often identify as D (or F) products. In an individual APR or territory, some of these sell just a couple of times a year. We don’t stock them, and our sales team generally lacks expertise on their application.

Amazon can sell across a wider geography, thus getting a bigger picture of the overall use of some of these seldom requested items, but they also have the analytical power to search for trends. This puts the typical distributor at a disadvantage. 

Aside from the disadvantage described above, Amazon has strategic plans to use product suggestions and bundled pricing deals to push from the long tail items into those strategically important items that serve as the lifeblood of distribution. This advantage paints a gloomy picture because it ensures continued margin pressure on distributors and puts our supply partners in the difficult position of either migrating to Amazon or potentially losing business.

A Future-Proof Distributor needs to combine technology in its business with outwardly facing technical and process acumen.
The future for distributors who rely solely on selling standard products alone could be bleak. Mr. Heller encourages distributors to “future-proof” their business by adding both technology and outwardly facing technical (and other) services to their portfolio.  

While Amazon will have strong capabilities on the selling side, services cannot be delivered to customers via the internet or any of the other technologies in which they are investing. Heller refers to these services as “moats” around your business. His presentation provided dozens of these protective barriers. They are all customer-centric and embed the distributor into customer processes in ways which are difficult to digitize. I don’t feel comfortable sharing them but I would encourage you to do some brainstorming on the kinds of services you should be providing; some free and others fee-based. 

Millennials will accelerate digital commerce requirements.
Think about this, Millennials are “digital natives.” They have been surfing the web and buying products personally throughout their entire lives. Many learned to fix their first car, play the guitar and a plethora of other tasks via the internet and in an entirely different way than previous generations. This is their preferred way of doing things – including business. Most prefer not to spend time with a traditional salesperson, regardless of that seller’s technical ability or people skills.

All this and Millennials will comprise over 75 percent of the workforce by 2025. We distributors have a very short time to ramp up our efforts and prepare for the future. 

Our industry must respond to Amazon Challenges.
We must respond and do so quickly. There’s more to this than just writing a check for some technology, hiring a couple of people and calling the job done. One only has to think back a few years when every shopping area included a book store, a record/music store and a dozen other specialty shops now replaced by Amazon. Going back to Mr. Heller’s analogy of building moats around our business, we need to get the shovels out and start digging.

Finally, a word on KYKLO
KYKLO allows distributors the opportunity to get a head start

on the digitalization of distributors. Webstores are an important piece of the equation. But for the small to midsized knowledge-based distributor, building an e-commerce platform falls outside of their core competency. KYKLO enables distributors to quickly, easily and cost-effectively get over this hurdle. KYKLO gives distributors the time and resources to do what they do best – set up the customized service offerings that Amazon will never be able to duplicate. Build moats and let KYKLO build your webstore.










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