What Distributors can Learn from MDM’s Top Distributors Lists

Modern Distribution Management (MDM) releases an annual top distributors list.  

Each year, large distributors grow bigger – even through a pandemic. Many have invested in digital transformation and other strategies that have helped them adapt quickly and get ahead. 

The companies that landed on top in the past have done so again. 

• Industrial and Construction: Ferguson Enterprises and W.W. Grainger (Nos. 1 and 2, respectively) 
• Electrical, Data and Security: WESCO International and Sonepar 
• Electronics: Arrow Electronics and Avnet 

According to MDM, these firms had several advantages that kept them steady as the pandemic influenced their customers, suppliers and operations. They were readily able to deploy remote-work capabilities and get closer to maturity in digital channels and e-commerce. And thanks to being proactive with their digital transformation, they could capitalize on those advantages faster than their smaller competitors. 

Yet, even small and midsized distributors proved themselves resourceful, flexing to offer touchless curbside pickup, virtual meetings and remote sales. 

What SMB Distributors Can Learn from Larger Companies 

Market movers cited – Fastenal, Winsupply, Lawson Products and W.W. Grainger – reported the following lessons learned:

• Investing in talent to combat labor shortages is critical. 
• Having flexibility in sourcing is key to resilience and continuity. 
• Global supply constraints are worse than they’ve been in decades – and they are slated to continue. 

Perhaps most important, the MDM report states, “There remains a need for distributors to adapt to evolved customer demands, and nowhere is that more evident than in the importance of developing a sound digital strategy.” 

How Should Distributors Plan for Growth? 

Positioning your company for growth takes planning. Before you start looking at ways to support your growth strategy, think about your customers’ needs and ways you can leverage your data and technology options to position yourself for success. 

Make Customer Experience a Top Priority 

First and foremost, consider what you need to serve your customers best. Today’s business landscape is littered with the remains of companies who forgot to do this – listen to their customers and build a strategy around their experience.  

Customer expectations have changed drastically through the pandemic, and those changes don’t look the same across all customer bases. What do your customers need from you, and how can you invest to provide that? 

Leverage Data and Analytics Tools 

Tools that integrate and analyze data support your business from improved productivity and customer experience to more effective sales and inventory optimization.  

Data can be instrumental in determining a path forward when so much has shifted. Tools that provide real-time data and analytics will allow you to make better business decisions each day, even as shifts continue. These insights can help you shift resources to accommodate demand increases or identify services that are losing money.  

Build a Digital Transformation Strategy 

The MDM report noted the importance of a sound digital strategy for distributors today, and digital tools are critical to delivering an optimal customer experience. A digital transformation strategy will help you control outcomes and make investments that yield the most significant returns. 

Caution: While digital transformation may suit your business, don’t overlook your company culture. You may hamper your digital transformation efforts without engagement and buy-in from your team. 

Leverage the Cloud 

Without a Cloud-based solution, you won’t be able to leverage emerging technologies that will significantly improve how you serve your customers while improving your internal productivity.  

Beyond this, the Cloud is now essential to ensure business continuity and minimal interruption to the service or products you provide customers. With the Cloud, you also need a strategy to ensure your migration goes smoothly and you get the expected outcomes. 

Want to learn more about how distributors can successfully leverage technology to compete? Talk to one of our distribution industry experts about implementing our Cloud and ERP offerings to support your digital transformation.  

For more distributor insights about leveraging technology to create competitive differentiation, exceptional customer service and operational excellence, download our playbook: How to Compete and Win Against Amazon.