5 Ways B2B eCommerce is Affecting Grocery Distributors

By
Caroline Goan
September 16, 2016

The food and beverage industry is subject to change in a way that many other sectors aren’t, with grocery distributors particularly affected. Cycles of demand can be irregular, whilst retailer expectations are driven by tight margins, short delivery times and the ability to quickly adapt to shifts in consumer buying habits. There is also a feeling that the industry as a whole isn’t adequately prepared for the broad shift to digital. In this post, we’re going to look at five key ways that eCommerce is affecting grocery distributors, and provide some practical tips about how to adapt.

5 Ways B2B eCommerce is Affecting Grocery Distributors

1. DATA ALLOWS GROCERY DISTRIBUTORS TO QUICKLY ADAPT TO NEW TRENDS

The growing and widespread use of B2B eCommerce solutions on the part of food retailers means that suppliers may have access to a pool of real-time data about consumer buying preferences. In the food industry especially, demand is subject to changing opinions about diet and lifestyle, not to mention the influence of certain trends that can cause momentary periods of interest in certain products. With B2B eCommerce, suppliers are able to effectively monitor retailer activity with a view to predicting and quickly adjusting to these shifts in demand. The integration of software used by other parts of the supply chain, such as logistics networks, also means that suppliers are better able to adjust to any time-sensitive issues that may arise.

2. STREAMLINED ORDERING PROCESSES ARE DRIVING EFFICIENCY

Speedier delivery times also limit waste on the part of both suppliers and retailers, having positive ramifications for seasonal goods and products, such as frozen foods, that require higher-cost storage. In a similar vein, whilst current reordering practices are often electronic, the technology use by both retailers and distributors is outdated. There is also a marked absence of any sort of standardized, mutually-understood infrastructure across the industry. Legacy systems are often difficult to use, and communication between third-party systems can be problematic. Modern eCommerce technology overcomes this problem by providing a simple, intuitive and customizable set of ordering features whilst also allowing for a range of integrations. Cross-device compatibility of eCommerce platforms also means that retailers can place orders when it suits them. Snap orders on the shop floor, for example, can be made easily from a mobile device, whilst the extensive features available through a desktop platform can be used to meet more complex buying needs.

3. MARKETING IN A TIME-SENSITIVE INDUSTRY IS EASIER

The growing use of B2B eCommerce amongst grocery distributors has opened up an array of new marketing opportunities. One of the problems faced by distributors involves the difficulty of matching promotions to short-lived consumer behavior. Reaching out to individual retailers is a time-intensive process, whilst gathering data to put together promotions based on transient trends can be hit or miss. One of the benefits of eCommerce is that it works incredibly well with email marketing. An eCommerce portal can act as a landing page, offering an immediate opportunity for retailers to purchase. Distributors can then monitor the effectiveness of their campaigns and make changes accordingly. There are also new opportunities for segmentation and crafting tailored offers, which can be made easily and automatically with backend eCommerce software. Also worth mentioning is the trend of growing social media use amongst company executives. Grocery distributors offering eCommerce solutions are particularly well-positioned to take advantage of this.

4. B2C ECOMMERCE IS AFFECTING DISTRIBUTORS

As has been pointed out in a report on B2C online grocery by Nielsen, there are certain aspects of the buying process that can’t be replicated online. The report outlines, for example, the value of “smelling freshly baked bread and seeing and feeling the vibrant color and texture of perfectly ripe strawberries”. B2C stores are adjusting to cater to demand that is defined by an omnichannel approach (online and offline) to buying. This trend is indirectly impacting distributors because it is affecting the way that they are being asked to supply stock to retailers. eCommerce is useful in this regard because of the control that is offered over a large number of variables. Goods that need to be sent to a warehouse instead of a store, for example, can be specified, whilst provision of information that is required by retailers for consumer-facing eCommerce platforms can be automated to a high degree.

5. DIGITAL CATALOGS IMPROVE THE FLOW OF INFORMATION ACROSS THE SUPPLY-CHAIN

eCommerce platforms dramatically improve the availability and quality of the information that is offered to retailers. Though there are certain aspects of eCommerce catalogs, such as HD and interactive images and real-time product descriptions, that improve the buying experience in a superficial way, there are also features that allow for speedier access to data that is vitally important to retailers. Inventory and stock levels, for example, can immediately be accessed by retail buyers with a view to adjusting orders that are time-dependent. Current industry guidelines and legal requirements can also be displayed directly on product pages. As a final example, ethically-minded consumers are also increasingly demanding information about the provenance of food, which can easily be distributed to retailers through eCommerce platforms. What are your thoughts about the way that eCommerce is affecting grocery distributors? Let us know in the comments section below.