A wholesale change in B2B commerce

Insights - 04-Dec-2019

If you cast your mind to a time before digital, the ultimate aim for any FMCG product was to appear on supermarket shelves. The likes of ASDA, Tesco and Sainsbury’s had the largest platforms, so if you were listed by them, you were rich.

Today, there’s only so much digital shelf space, and if you can’t sell your product, you’ll quickly be replaced by a rival who can.

With plenty of choices, consumers have no loyalty to your brand, their relationship lies with the supermarket. So, from the transaction to the loyalty card, each bit of data remains a secret as you quickly begin to become increasingly reliant on the platform.

B2B trade suffers from a similar issue, the wholesaler dictates the products, the audience and the cost. Unfortunately, this means the entire relationship is entirely out of your hands as someone else handles the data and brand experience in your stead.

Now, this isn’t to say listing on a platform isn’t still relevant. If your goal is to shift your product in volume, then it remains an excellent route to market and wholesale will always play a vital role in the supply chain.

However, consumer demands have changed, and today, we all expect a choice. The rise of the artisan happened a few years ago, and as consumers search for their new favourite craft gin, beer or health food, stockists need more options which the wholesale model simply can’t offer.

We live in a world with more choice than ever before and a 24/7 demand for something new. However, a wholesaler can only carry your core lines, your top 20%. This leaves the remaining 80%, the new experiences consumers are crying out for, undiscovered.

Is this the death of wholesale? Absolutely not, instead, it’s the dawn of building direct relationships with your stockists. This gives better control over your brand alongside a stronger understanding of the ideal consumer, their buying trends and your profits.

Taking matters into your own hands allows you to quickly launch new products to your key stockists and reward their loyalty through better pricing margins. The feedback you receive also enables you to see where your business is headed and make informed decisions on the back of this data.

One great example of this is the craft Gin explosion we have seen globally. Usually, the role of a professional barman is to dictate the scene and educate the consumers on what they should be drinking. However, when the craft scene grew, we quickly saw the reverse, patrons wanted something more and were no longer willing to accept Gordon’s and Schweppes.

Suddenly, barmen across the country grew beards and sleeve tattoos while sourcing the moonshine that would bring lovers of hipster drinks to their establishment.

This craft explosion is nothing short of impressive, and as a result, the major brands such as Carling, Gordon’s and Strongbow are simply not ‘cool’ enough anymore.

As people want more choice, brands need to build stronger, direct relationships with the stockist and end-user. We’ve already seen other industries reduce their reliance on a middleman model and having the choice to trade directly to stockists, as well as wholesale can only be better for everyone.