How distributors can beat Amazon at its own game

Amazon looks like it will be rolling out a commercial catering equipment section in
the UK soon.Amazon looks like it will be rolling out a commercial catering equipment section in the UK soon.

Last year’s news that Amazon is rolling out its own section for commercial kitchen equipment prompted concern from many distributors, but Mark Thornton, marketing director at software provider Maginus believes that becoming omnichannel could let businesses compete with the retail giant:

For the past 2 years the threat of Amazon entering the market has loomed over the UK wholesale and distribution sector. In 2015 the online retailing giant launched Amazon Business service in the USA, offering 20m items, with Amazon itself selling nearly 2m products directly to businesses and cementing its status as a genuine wholesaler.

The company then quietly launched a beta service in the UK, firing a further warning shot to the market that it could soon be competing with Amazon. It then fully launched Amazon Business in Germany – its second largest market after the USA – in December 2016, in what is likely to be Amazon’s final step before a full roll out in its third largest market: the UK.

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This will clearly have a significant impact on existing UK catering equipment distributors and wholesalers. For many it may seem like mission impossible to compete with the might of Amazon which, based on its previous behaviours, will almost certainly invest heavily in technology and infrastructure to create the economies of scale on which it thrives.

However, there are ways in which dealers can level the playing field. First, they should embrace innovative online marketing and selling techniques. By integrating into efficient back office systems and adopting the latest B2B e-commerce products for wholesalers and distributors that incorporate all the functionality offered by Amazon, they can compete directly with Amazon’s offering while retaining their agility and flexibility.

Second, they should exploit Amazon’s weaknesses: they don’t offer customer-specific pricing or have a sales team that can build personal relationships either face to face or over the phone via a call centre. Existing distributors are specialists in their chosen sectors and have deep knowledge of their products and their markets, as well as detailed understanding of their customer’s needs, that Amazon cannot match – and that they should use this to their advantage.

In essence what we are talking about is offering a top-quality, consistent experience across all channels, both digital and offline, or in other words omnichannel retailing. And while plenty has been said about this topic in the context of B2C retailing, considerably less has been said about how the B2B retail supply chain should approach becoming omnichannel businesses.

This was something that was addressed in a recent IMRG (Interactive Media in Retail Group, the UK’s association for online retail) report, supported by Maginus and plumbing and heating product distributor Wolseley: ‘Wholesale in 2016: the Magic is in the Mix’. The report highlighted that in a B2B context, omnichannel is “about connecting multiple touchpoints with the customer” into a single unified experience, and that for distributors, “touchpoints are about relationships, traditionally relationships between people, and not about execution channels.” The key takeaway from this is that, for dealers and wholesalers, having an ecommerce offering should be seen as a means to building better customer relationships, rather than an end in itself.

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