The distribution sector is constantly evolving, and distributors must respond quickly to external factors that significantly influence their companies. “Hyper-connected” consumers have access to a huge amount of data and can fully research their options, so distributors must respond immediately with a workable solution. At the same time, intense competition in our globalized world has forced economic models and markets to keep pace with these changes.
Price-based differentiation is no longer enough to win market share, and innovation is a strong competitive advantage. This innovation may be technological: in its 17th Annual Global CEO Survey (published in 2014) PricewaterhouseCoopers noted that technology has the potential to transform distribution. Eighty percent of CEOs in the distribution sector believe that “technological advances” will cause their businesses to change within the next five years. If existing technologies such as RFID, digital assistants, 3D printing, biometrics and big data are used in optimal ways, they can create value consumers and businesses alike.
Deloitte’s Global Powers of Retailing Report 2014 noted another challenge facing distributors is the successful management and organization of the enormous quantities of data that their customers provide, while still guaranteeing transparency. In the current business environment, consumers are in a position of power, so distributors must make deep and meaningful organizational changes to keep up.
These changes may include creating a more dynamic and entrepreneurial business model, encouraging teamwork and collaboration (with suppliers, solutions providers, clients, etc.), constantly experimenting with new approaches, failing often in order to achieve greater success, and initiating dialogue with clients and their employees in order to suggest solutions that make sense for the client.
International market leaders like Tesco and Amazon understand this in a meaningful way, and have begun the process of ongoing transformation and innovation.
What does this mean for Lille and our distributors?
More than 80 national and international distributors are headquartered in Lille; our city is an incubator for experimentation and innovation in the name of better customer service and customer experience. Following are several distribution innovation initiatives that began in Lille and may have a global impact in the future.
PICOM’s New Shopping Experience: encouraging small/medium businesses and distributors to innovate together
Every year, the Pôle de Compétitivité des Industries du Commerce or PICOM, (a business cluster for distribution, e-commerce and customer relations companies) holds a New Shopping Experience competition to promote customer-centric innovations for in-store shopping, online shopping, and transportation/logistics. In the fifth annual competition, six highly innovative small/medium businesses worked with seven distributors to develop eight New Shopping Experience projects. These included an app developed by Fitizzy that allows in-store shoppers at Auchan to find the correct size for a certain item of clothing, Keyneosoft’s tool that provides Ikea customers with an integrated mobile payment tool and locker pickup option, and an in-store beacon system that Ubudu created for Decathlon, to allow the company to engage and interact with customers who visit its stores.
Lille-based distributors partner with startups outside France
The online grocery delivery service Chronodrive wanted to roll out a new service to its customers: the company contracted with Ikomobi, a provider of digital and mobile solutions, to integrate a tool called Hiku, developed by a California-based company of the same name.
By using Hiku’s handheld scanner, customers can shop from home, either by scanning an item’s bar code or by dictating a shopping list into the Hiku device. When the customer connects their Hiku scanner to a Wi-Fi network, it automatically sends the shopping list to a smartphone or tablet, that then orders the items scanned, using Chronodrive’s app.
Decathlon involves its customers in the design process, by letting them help create new products.
The website www.openoxylane.com went live in April, 2014. It lets members of the Open Oxylane Community transform their ideas into innovative new products that are available for sale. Community members can interact with other community members and the Decathlon group brands at every product design stage: concept, design, materials, colors, product names, and even the product’s retail price.