The importance of omnichannel – Part 2

13 December, 2021

Ian Simpson: “The omnichannel approach is already the norm in the consumer space – now is the time for the fluid power industry to follow suit and in so doing reap all the major benefits that are to be had.”

In Part 1 of this article published in the September edition of Hydraulics & Pneumatics, I made the point that many companies within the fluid power industry and related technology sectors in the UK have been slow in adopting an effective methodology with regard to internet sales, even though customer orders and expectations are increasingly moving in this direction. As previously stated, the trade counter may still be thriving, but it now resides as only one aspect within omnichannel. So, looking at the omnichannel trend from our own industry’s perspective, what are some of the most effective transformative actions that can lead to an efficient, popular and profitable omnichannel offering – one that can help to futureproof your company in the age of digital transformation?

A McKinsey & Company report of April 2019 on the industrial distribution market, titled ‘The coming shakeout in industrial distribution and five keys to outperformance in the years ahead’, points out that the most successful distributors are already transforming their operations to adapt to the major trends impacting the market. The report identifies five key transformative actions that it claims will distinguish the industry’s outperformers across segments. The first action cited is the advantage of building scale where it matters most. The report stresses that there are major advantages to be had by becoming one of the largest distributors in the sector and across markets where you play.

Accelerating organic growth

Another point made in the report is that by competing smarter through investing in commercial excellence – from dynamically tailored pricing to salesforce training – you can accelerate organic growth and expanding margins. Also, by become leaner and executing flawlessly, the report states that companies can improve operational excellence such as warehouse optimisation, fleet maintenance and demand forecasting to reduce costs as a share of revenue and reallocate resources to pursue growth opportunities.

A further point made is that it is advantageous to move beyond pure product distribution. McKinsey & Company maintains that by offering a suite of monetisable value-added services that customers want and need, and by creating an integrated offering of products and services, companies can increase ‘customer stickiness’ and spend. Perhaps the most critical component for sustained, future success, is the importance of embracing the digital revolution. This magazine regularly dedicates a large portion of its editorial content to the changes that are taking place in our industry from a digitally transformative perspective – and with good reason. This is the future; indeed, it is the now. The McKinsey & Company report comments that there are major benefits to be gained by harnessing new digital tools “and mountains of internal and external data to improve operations and the customer experience”.

The need for wider adoption As things currently stand, there are only a few companies within the fluid power sector that have truly embraced a fully rounded B2B e-commerce regime, and, understandably, those that have are winning over their competitors. Congratulations to those companies that are going boldly down the e-commerce/digitalisation path. And it’s worth pointing out that Flowtech is certainly one of these and we are proud to be so. However, for the sake of our industry’s well-being as a whole, this methodology needs to be more widely embraced. The approach is already the norm in the consumer space – now is the time for the fluid power industry to follow suit and in so doing reap all the major benefits that are to be had. Don’t be left behind – your very survival could depend on it.

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