By Terry Smagh, Senior Vice President & General Manager, Asia Pacific & Japan at Infor
The distribution industry connects producers and manufacturers with consumers in a rapidly evolving global marketplace. As technology advances at an unprecedented pace, the distribution landscape is poised for significant transformation over the next decade.
Here are 10 trends and predictions that I believe will shape the future of distribution, enabling businesses to stay ahead of the curve and thrive in the dynamic market of tomorrow.
- Automation revolutionises supply chains: The rise of automation, driven by robotics and artificial intelligence, will profoundly revolutionise and reshape supply chains. Smart warehouses with cutting-edge technologies, including autonomous vehicles, state-of-the-art automated picking systems, and advanced predictive analytics, will optimise inventory management, significantly reduce costs, and remarkably enhance operational efficiency.
Therefore, deploying a best-in-class warehouse management system (WMS) is of utmost importance as it acts as a crucial link, seamlessly connecting your automation to your enterprise resource planning (ERP) system, facilitating smooth and efficient operations.
- Advanced analytics and big data drive decision-making: Looking ahead, the future of distribution heavily relies on harnessing the immense power of big data and advanced analytics, which play a pivotal role in shaping strategic decision-making processes.
Forward-thinking businesses will utilise sophisticated predictive algorithms and real-time data analytics to make highly informed decisions, optimise inventory levels, accurately predict demand patterns, and deliver personalised customer experiences.
To fully leverage these invaluable data tools, distributors should migrate their ERP systems to the cloud, enabling them to effectively deploy and capitalise on the transformative potential of advanced analytics and big data.
- Last-mile delivery revolution: Last-mile delivery is on the verge of a transformational shift as pioneering delivery models emerge and gain widespread adoption.
Cutting-edge technologies such as drones, autonomous vehicles, and delivery robots are poised to become commonplace, revolutionising the final leg of the delivery process by offering unprecedented speed, exceptional cost-effectiveness, and unrivalled convenience as products are swiftly transported to consumers’ doorsteps.
Additionally, the rise of crowd-sourced and shared delivery networks will further propel the efficiency and effectiveness of last-mile delivery, making it an increasingly prominent force in distribution.
- Sustainable and eco-friendly practices: In response to mounting environmental concerns and an ever-increasing demand for ethically conscious products, the importance of incorporating sustainable and eco-friendly practices in distribution cannot be overstated.
Forward-thinking businesses are proactively adopting and embracing environmentally friendly initiatives, such as green packaging, integrating electric vehicles into their fleets, and optimising logistics routes to drastically reduce carbon footprints.
By prioritising sustainability, companies address environmental challenges and cater to a growing market segment that values eco-conscious products and distribution practices.
- The rise of direct-to-consumer (D2C) channels: Direct-to-consumer (D2C) sales are poised to experience continuous and substantial growth, steadily bypassing traditional distribution channels altogether.
Fueled by technological advancements, manufacturers actively leverage cutting-edge tools and platforms to establish an unprecedented direct connection with consumers. This direct link fosters personalised experiences, empowers data-driven marketing strategies, and grants manufacturers more control over brand messaging, brand-consumer relationships and customer loyalty.
- Blockchain revolutionises traceability and transparency: Blockchain technology’s revolutionary potential within the supply chain management realm could be genuinely transformative, offering unparalleled traceability and transparency.
Distributed ledger systems powered by blockchain enable real-time tracking and monitoring of products throughout the entire distribution network. By effectively combating counterfeiting, substantially reducing instances of fraud, and ensuring the authenticity of goods, blockchain technology significantly enhances trust and accountability within the supply chain.
- Hyper-personalisation and customer-centric experiences: The future distribution landscape will be characterised by an unwavering dedication to customer-centricity fueled by the immense power of hyper-personalisation.
Leveraging advanced analytics, machine learning, and artificial intelligence, businesses will possess the extraordinary ability to deeply understand individual preferences, enabling them to deliver meticulously tailored products, personalised offers, and unforgettable experiences that foster exceptional customer satisfaction and unparalleled brand loyalty.
- Augmented reality (AR) enhances product visualisation: Augmented reality (AR) emerges as a groundbreaking technology that plays an instrumental role in elevating the visualisation of products and profoundly shaping consumer decision-making processes.
As AR-enabled devices become increasingly prevalent, consumers can experience products virtually before purchasing. This transformative capability revolutionises the online shopping experience, effectively bridging the gap between physical and digital realms and empowering consumers with unprecedented confidence and satisfaction.
- 3D printing enables distributed manufacturing: The advent of 3D printing technology disrupts traditional manufacturing and distribution models by offering an array of unprecedented advantages. The remarkable capability to produce goods locally, precisely on demand, and with significantly reduced waste gives rise to the establishment of distributed manufacturing networks.
This transformative shift leads to substantially shorter lead times and empowers businesses to deliver highly customised products tailored to individual consumers’ precise needs and preferences, effectively revolutionising manufacturing and distribution.
- Collaboration and ecosystem integration: As the distribution landscape unfolds, a profound transformation characterised by intensified collaboration and seamless ecosystem integration becomes increasingly prominent.
Forward-thinking businesses recognise the immense value of forming strategic partnerships, engaging in data-sharing initiatives, and fostering close collaboration in critical areas such as logistics, inventory management, and fulfilment.
This concerted effort enables seamless end-to-end operations, propelling businesses toward faster time-to-market, enhanced competitiveness, and unparalleled operational excellence.
The future of distribution promises exciting advancements and transformative changes that will reshape the industry. Ensuring your tech stack is robust enough to handle these new tools is critical. Embracing automation, leveraging big data and analytics, adopting sustainable practices, and harnessing emerging technologies will be crucial for businesses to stay competitive.
By embracing these trends, wholesale distributors can unlock new opportunities, enhance efficiency, and deliver exceptional customer experiences in the next decade and beyond.