Wouldn’t it be nice to obtain that crystal ball everyone talks about? The one that could show you what Foodservice and JanSan Supplies Distribution will be like in three years.
While we don’t have the crystal ball, our industry experts Walter Thompson and Ric Kuhlman have had decades of experience in Foodservice and JanSan Supplies. They have seen the industry change and evolve over the years.
These are some of their predictions of where they see the Foodservice and JanSan Supplies Distribution industry heading.
By 2020, Gartner predicts at least 70% of new application development projects will be deployed to the cloud. Distributors of Foodservice and JanSan Supplies looking to stay competitive in a competitive market, will look to move their manual processes into the cloud. With a focus on becoming more efficient, Distributors will increase their software adoption to manage their day-to-day activities including vendor rebates and purchase price management. For those Distributors who resist the pull of cloud technology and want a more efficient way to do business, they will find their software options limited.
Distributors of Foodservice and JanSan will leverage their digital storefronts coupled with just-in-time suppliers to expand their product offering. Distributors will look to adopt price and promotion management software that helps them manage this activity, moving their pricing out of spreadsheets. Having more flexibility to offer a range of discounts and promotions supported by just-in-time suppliers, means Distributors will expand their product offering, increase market share, and improve profitability.
Digital storefronts supported by just-in-time purchasing will reduce the need for bricks-and-mortar warehouse space while retaining a Distributor’s ability to sell the same amount, if not more product. Digital storefronts partnered with just-in-time suppliers means Distributors of Foodservice and JanSan Supplies can also reduce the amount of inventory. Reducing inventory stock transfers the risk of price deflation from the Distributor to the Supplier.
Distributors struggle getting their B2B digital storefronts to perform like mainstream B2C storefronts due to the complex B2B pricing algorithms. Distributors will solve this challenge by offloading their B2B pricing from their ERP to specialised pricing applications that work in-memory and leverage service-orientated architecture like Microservices. Distributors who adopt these specialised, best-of-breed solutions will find their B2B web store users favouring their ordering platform.
We’re predicting that over the next three years, loyalty programs will become more prevalent in the Foodservice and JanSan Supplies Distribution industry. With emerging digital storefronts, we see traditional couponing transitioning to full loyalty programs with more asked of the customer for them to receive the benefits. Replacing price guarantees with loyalty programs will allow Distributors to become more flexible with their pricing without alienating their loyal customer base.
Most Foodservice and JanSan customers like a consistent and known cost for the products they purchase. If the price of the product is to increase, they want it only once a month, at the beginning of the month with a notification in advance. While this has worked well in the past, Distributors need to adopt a more flexible approach to their pricing to remain competitive and protect their margins.