Wholesale distribution navigates an inflection point
The wholesale distribution industry faces a true inflection point similar to decisive moments that other industries—such as retail, health care, and automotive—have faced. A wave of disruptive forces—amplified and accelerated by digital technologies—are poised to transform an industry unaccustomed to rapid, unpredictable changes.
After years of being insulated from the disruptive forces reshaping other industries, wholesale distribution is now feeling the seismic impact. As a case in point, until Amazon bought Whole Foods in June 2017, many food and food-service distributors felt relatively secure in the belief that factors such as stringent customer and regulatory requirements for the storage and shipment of perishable items created a barrier to outside competition. However, that acquisition and Amazon’s subsequent moves in pharmaceuticals and grocery have increased the sense of threat across distributor C-suites.
Wholesale distributors may need to think more broadly about their competitive positioning and develop strategies to navigate the increasingly dynamic landscape. Winning at the inflection point will likely require distributors to make choices about where to play and how to win, with an emphasis on sharpening value propositions and business models, embracing innovation, and gaining scale in targeted segments.
Deloitte Consulting LLP