Driven by e-commerce pure players and new consumer expectations, traditional distributors are being forced to conduct in-depth reviews of their sales models (products, prices, services) and are increasingly relying on their stores to differentiate themselves. Growth is a major challenge for every product category.
Distributors are being forced to rapidly optimize their historical sales models, to seize opportunities in an increasingly complex environment:
- Poor 3-year growth forecasts for most markets:
- 2-3% per year for the food industry;
- 0-1% per year for the non-food industry (high-tech, electronic, home, DIY, automotive, etc.).
- Rapid intensification and diversification of the competitive landscape:
- Strong growth of e-commerce: +15% per year, 3-year forecast
- Development of pure player market places and arrival of pure Business to Consumer (B2C) intermediation models
- Active expansion of specialized stores (+500,000 m²/year)
- Emergence of click-and-collect and increasingly multi-channel customer consumption:
- 20-30% of e-commerce growth accounted for by traditional distributors who use their store networks effectively to differentiate themselves from pure-players.
- Price war in all markets:
- Drop in purchasing power of the French population;
- Price comparison facilitated and accelerated by the internet (smartphones).
- Gradual increase in power of direct internet marketing by manufacturers and brands
In response to these rapid developments, distributors are focusing on the key challenges:
- Developing an e-commerce mix strategy that can effectively supplement in-store offer
- Offering new products and services
- Adjusting mixes to better suit market area profiles (adjusted central offer and non-inclusive add-ons), in connection with store business lines
- Formulating a clear pricing strategy, which is completely aligned with the global strategy: conquering or defending the market share, Everyday Low Price or promotional, alignment or non-alignment of prices with online and offline competitors
- Implementing comprehensive management of sales promotion with the aim of allocating sales investments more effectively to various areas
How can Argon Consulting help you?
Argon Consulting assists distributors in optimizing their mixes, pricing, sales promotion and omnichannel development by providing:
- Strong expertise in distribution across all markets/channels
- Proven analytical approaches and standard models
- Excellent command of good organizational practice
- Unique approach that focuses on sales and operations, to help you make the best choices or trade-offs between offer/customer service and process/operating costs and related investments