Distributor and Supplier Trends You Can’t Miss in 2022
Distributors and suppliers are likely to target 2022 as a year of solid growth for sales after a stop-start recovery in 2021. Emerging facts and data about the new year are promising. Nevertheless, many of the headwinds businesses faced last year remain. Economic conditions are pushing up the costs of industry necessities, and COVID is still a concern globally.
As you plan and strategize for the year, we have rounded up the top wholesale trends for 2022. Here’s a brief primer on the industry’s historical performance since the pandemic began and what to expect this year.
Was the pandemic felt in the wholesale industry?
The event of this decade, if not the century, will likely be COVID-19. Its impact was global and vast. Almost every country and most global industries were affected by the pandemic.
The viral pandemic impacted the wholesale industry especially hard. Global trade practically halted during the pandemic. Lockdown measures forced 3.9 billion people indoors at one point, affecting more than 90 countries.
Some of the first and hardest hits were major manufacturing and distribution centers like China. By 2020, China accounted for 16% of global exports, according to the World Economic Forum (WEF). In addition, the country exported nearly 20% of intermediate products globally – demonstrating its important role in supply chains.
As a result, manufacturers could not obtain critical supplies, and production in several countries slowed or halted. Japan, South Korea, Singapore, Thailand, etc., had the same story.
The pandemic also caused distribution problems for distributors and suppliers. Shipping and transportation grew painfully difficult due to public health protocol, labor shortages, and overcrowded ports.
In May 2020, container throughput declined by 9.5%, reports the Institute of Shipping Economics and Logistics. According to the International Air Travel Association, air cargo volumes declined 15.3% by April 2020.
Distributors and suppliers could not replenish stock. Retailers also faced difficulties when it came to moving inventory. In the food services sector, lost customers, spoilt inventory, lockdowns, etc. led to losses of over $120 billion.
Some good came out of it, however. Despite declines in manufacturing, tourism, and the hotel industry, healthcare, and consumer tech grew.
Big winners were drug companies and personal protective equipment (PPE) manufacturers. The logistics and last-mile delivery companies did well too as distributors and suppliers and retailers turned to them for their delivery needs.
The pandemic was also good for e-commerce. Buying and selling online drove B2B and B2C sales. By 2022, B2B e-commerce sales will account for 17% of global e-commerce sales, up from 12% in 2020.
Business owners worldwide have hope for 2021 compared to the previous year. Despite the pandemic shockwaves, the year has started a global economic recovery that will only accelerate. 2022 is a pivotal year in the fight to return to global economic normalcy.
Here’s how wholesale will look in 2022:
1. Wholesale industry upturn
The wholesale distributor market had mixed results in 2021 but should grow in 2022. Wholesale market value is forecast to rise from $49.3 trillion to over $64 trillion at a compound annual growth rate of 7%.
There is increased trade volume as business owners and retailers meet global demand. COVID represents a global economic anomaly due to its optimistic projections. Pandemic effects shook the global economy, but they do not represent deep economic flaws.
With a positive outlook, savvy distributors and suppliers should begin strategizing. Which brands should they sell? What products are likely to appeal to customers? Make sourcing decisions early in the year by answering these questions.
2. Internet shopping will lead
During the pandemic, online sales provided distributors and suppliers with crucial pressure relief. As more B2B buyers move their procurement online, this trend is set to continue.
By 2025, Gartner predicts that 80 percent of B2B sales will be online. Similarly, Digital Commerce 360 reports in its B2B Buyer Survey that 40 percent of B2B buyers use online marketplaces for at least half of their sourcing needs.
E-commerce has already proved successful for early adopters. Those who begin securing digital real estate in advance of the emergence of online sales can gain the upper hand in this space.
You can create a custom digital sales channel. Integrate a business website with an online store so B2B customers can make a purchase. As a B2B marketplace, you get all the benefits of your digital storefront without the capital commitment.
3. Supply and distribution chain restructuring
Due to recent supply chain woes, companies are updating their sourcing and distribution networks. As companies look for safer suppliers and distributors, 15 to 25% of global trade is expected to shift in the next five years.
Cost and expertise had been the primary factors. Since COVID cut companies off from critical suppliers and distributors, companies are now focused on disaster preparedness and geographical reach.
Due to lessons learned in the past two years, companies are looking for fulfillment providers who can offer safer and more efficient solutions. If you have the required processes and experience, there may be a new role waiting for your distribution company.
If so, you have many options. Showcase a dependable distribution chain supported by industry best practices. Automate your entire process if you can.
4. D2C marketing growth
Taking a direct approach to the supply chain crisis is one way for some companies to address the crisis. More companies are building direct-to-consumer (D2C) sales channels, effectively cutting out distributors and suppliers.
In the U.S. alone, D2C sales grew by 45.5% in 2020.10 And more recently, huge brands like Nike and PepsiCo, which have traditionally used distributors, went direct.
Due to COVID, brands were forced to explore social media selling and digital D2C platforms to deal with the crisis. However, newer trends such as corporate NFTs are propelling this trend even further.
The big question is: what will distributors and suppliers do? Try showing why you’re better. Let the manufacturer know that your service is fast, cost-effective, and exactly what the B2B customer needs.
Value-added services are another option to help you stand out. Enhance the quality of your service, make technology more efficient, etc.
5. SEO visibility
As B2B wholesale distributors shift to digital selling, search visibility is more important. Being online is one thing; being visible to your target market is another.
Search engine marketing helps distributors and suppliers reach more buyers. 40% of wholesale e-commerce sellers plan to improve their search capabilities, according to recent data.
Paid ads and search engine optimization (SEO) are of interest. Search engine optimization is seen by sellers as a way to create brand awareness and authority.
Furthermore, SEO leads to long-term results because it promotes good internet practices. SEO for distributors and suppliers’ websites and e-commerce stores can therefore contribute to their success this year. B2B marketplaces may already cover sellers who have digital storefronts.
6. Omnichannel sales
Buyers’ preference for omnichannel services will likely increase in 2022. Multiple purchase channels were one of the effects of COVID.
Mobile, web and physical access to your services are all becoming increasingly important. Customers now demand omnichannel service from sellers, according to McKinsey.
In addition to B2C sales, these preferences are also finding their way into B2B sales.
Buyers of B2B products still interact with retailers at their convenience. Because of this, they expect similar ease and personalization options.
7. Lack of labor
Despite the uncertainty of COVID-19, labor shortages were a constant for distributors and suppliers in 2021. Business may still face shortages in 2022 due to those challenges and underlying factors.
In countries like the United States and the UK, a labor squeeze is largely due to low pay, digital skills, and flexible work arrangements.
Distributors and suppliers need to keep an eye on this trend. Your 2022 plans might be for naught if you do not have the staff to meet demand.
Incentives such as paid time off, productivity bonuses, and daycare assistance are good options. A schedule that protects employee health, good healthcare benefits, and mental wellness plans can also be valuable.
8. Keeping inventory smart
Distributors and suppliers often deal with outsized inventory because they operate at the wholesale level. Managing five to ten large-sized warehouses is more complicated.
Distributors and suppliers use inventory management software to make the process easier on employees. ERP software can be a standalone solution or part of a larger platform.
Inventory management has many advantages. It’s easier to see the stock at a glance, determine what goods are selling and what aren’t, plan demand, and so on with a platform such as this.
Integrating intelligent ERP or inventory management software into your operations would be a great move for 2022.
9. Analyze data
Since 2010, big data has exploded. Big data is a foundation of the internet of things, the internet of everything, and the metaverse. Businesses create vast amounts of data during their daily operations.
The frequency of a customer’s orders, the type of products they prefer, and changes in their routine constitute data. The wholesaler can use this data to improve their business.
Analyze your data sets to forecast sales, anticipate demand, or even rethink your processes. We can use data to tell what we’re doing wrong, what we’re doing well, and what we can do to improve.
Taking advantage of this data may not require a large investment. Much of that data is already available if you use ERP software. You can also use free business intelligence tools if you operate a digital storefront on a B2B marketplace. Knowing your data and utilizing it for your business goals is most important.
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