Virtual Distribution - Perfect For The Times of 'Rona

May 19, 2020

In October 2018 I wrote a short piece on the necessity of online presence and the defining success factors required.

This truth was driven by a shift in consumer habits - convenience driven by universal logins, 1-click purchases, online commerce engines, appropriate infrastructure geared up to facilitate faster/mobile browsing and deliveries, growing familiarity and so on.

What does an organisation need to do? Assuming the product exists and is competent, it’s a basic formula: make the product available; make the product visible; remove the barriers to buying it.

With the benefit of hindsight, a willingness and drive to embrace these ideals has defined the economy’s current winners.

Covid-19 - the ‘Rona - was a pretty difficult thing to predict until it was upon us, but rather than change the retail market per se, it has simply accelerated the online trend dramatically. The critical success factors and outlying trends remain the same.  

As a retailer, the acquisition of brands to sell is the simplest way. Traditionally, acquisition adds cost - SKUs, resources and risk.

Virtual Distribution (with a capital D) partly solves that issue. It allows for range extension and the beginning of a positive cycle with almost zero upfront cost and commitment. In its purest form, it allows retailers to range and sell almost any product without ever carrying a stock risk; products are bought/sold in the usual way but fulfilled directly, from manufacturer to consumer. Virtual Distribution is the disposal of that traditional framework whilst retaining the relationship management skillset. It brings virtual footfall, sales volume, more sellers, a better selection – positively feeding the consumer experience.

As a manufacturer, being visible provides the same impetus – it follows then that increased retail footprint works there too. Search efficiency increases, visibility increases, sales increase, risk is spread.

There is an emerging role for forward thinking distributors here. By having this expertise available as a ‘product’, distribution can allow outlets to range extend with impunity. But most have done exactly the same as retailers – reduce costs, stock the biggest brands and hope for the best.

The third way is to remove the barriers to buying – in today’s world, making the product available in the smallest chunks. The new Peloton subscription is a great example – you can now be part of the Peloton tribe for a few quid a month. Zoom made the product available for nothing, in small amounts. Registered users and subscriptions have leapt.

The management of this process is a thing of value in itself, working to pivot a product or route to market. The time to act is now; despite how you might feel (inertia is a horrible thing, justified incessantly by retrospective partiality - ‘Ah well it wouldn’t have worked anyway...’).  

The ability to react quickly, to run promotional activities instantly, without fear of current stock liabilities, pricing or availability issues adds value throughout the chain and will breed success in today and tomorrow’s retail landscapes.  

It’s not too late to drive your business into new territory that will serve it well, long after the current pandemic is under control. We understand what you need...

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