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New Research | How Distributors Respond to Technology Disruption

Published on by Mark Hamad in Technology, Wholesale / Distribution

New Research | How Distributors Respond to Technology Disruption

Over the past seven months, the National Association of Wholesaler-Distributors (NAW) has provided a series of seven research reports, along with seven accompanying webinars to help wholesalers throughout the U.S.  The research reports are there to help wholesalers gain the intelligence needed to formulate new strategies and ensure companies thrive through this era of technological change.  In this blog post, we’ll dive into one of those research reports from NAW and provide our key takeaways.

Distributors View on Technology Disruption and How to Respond

This research report and survey was sent out to distribution executives across the country and 246 executives responded to the survey.   The research report noted that wholesale distributers are entering a period of significant technological change.  Some distributors will differentiation themselves through successful strategies, form new methods, and survive the turbulence.  However, many distributors will fail to respond, or will make the wrong decisions and will ultimately fail to their competition.  Which company are you going to be?

The research report noted that there are five types of companies:

  • Innovators (2.5%) – 2.5% of companies are considered “Innovators.” These companies are willing to take risks, have the financial liquidity to take these risks on, and are the first ones to try new changes.
  • Early Adopters (13.5%) – These companies have a high degree of leadership among their peers but are a little more discreet with innovation than the innovators.
  • Early Majority (34%) – These companies adopt to innovation at a varying degree. Most companies here wait for the “test” period and follow by example.
  • Late Majority (34%) – These companies are typically skeptical about any innovation changes.
  • Laggards (16%) – These companies are the last to adopt any type of innovation. They typically dislike change and value “tradition.”

So again, ask yourself, which group does your company fall into?

Key Takeaways

Finally, below are some of our key takeaways and recommendations from the NAW research report:

  • Disruptors to the wholesale industry are very powerful. Disruptors include:
    • Technology and Artificial Intelligence
    • 3D Printing
    • Blockchain and Cryptocurrency
    • Growing threat of digital marketplaces (think Amazon, Google or eBay)
    • Direct to Consumer
    • Autonomous vehicles, robots and drones
  • Within those that responded to the survey, there seems to be growing interest in an industry-centric marketplace (think Amazon or eBay specifically for wholesalers)
  • Marketplaces (Amazon, Google, eBay) should be viewed as an opportunity, but also a threat!
  • One of the biggest threats to distributors are those product items that are small (items that can be picked off a shelf by anyone and shipped via common carrier. Your business will struggle because customers will simply order and buy off Amazon).


  • Get technologically literate (fast!). There is no time to waste – Educate, network, learn.
  • Begin to develop distributor-centric marketplaces (and don’t just rely on Amazon, Google, eBay). This would allow your customers to see your website as normal, but their options for supplies and products would be enormous.
  • Don’t trust the disruptors. Don’t trust Amazon.  If you are going to do business with Amazon be careful.  They want to disrupt, they want the market share, they want to take over.

To learn more about the research reports, you can follow along on the NAW website at www.naw.org

Have questions about your business?  Talk to one of our Barnes Dennig wholesale distribution industry experts, or call us at 513-241-8313 to ensure your business is successfully transforming in the wholesale distribution landscape.


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