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Can traditional distributors in the UAE up their game to go direct-to-consumer? They already have some inbuilt advantages, such as close ties with principals. Image Credit: Supplied

The traditional boundaries between business-to-business (B2B) and direct-to-consumer (D2C) models are becoming blurred. Many B2B companies, distributors and& manufacturers are embracing D2C strategies to reach customers more effectively.

This is likely to happen even on B2B online marketplaces. Over time, they too would need to look at ways to operate their own versions of blended B2B and D2C models. To offset the pressures of maintaining sales targets, many D2C companies are expanding into B2B, offering their products and services to other businesses.

Here are some of the likely trends that will continue to drive this change:

  1. The increasing use of digital has revolutionized the way businesses interact with each other and with consumers. Consumers now expect a seamless buying experience, regardless of where they are buying from. And they have gotten too used to the look, feel and experience of the B2C online model, which will need to be replicated across all online buying experiences.
  2. B2B companies are now using AI to differentiate themselves. At the same time, D2C companies are expanding their product-lines to include B2B solutions.
  3. Social media has transformed the way businesses interact with customers. D2C companies have taken a significant lead in this area. They have built great expertise in using social media to build brand awareness and engage with customers. B2B companies need to follow suit.

As far as traditional distributors are concerned, they would need to take cognizance that fusing of B2B and D2C could lead to a situation where brands and manufacturers may wish to sell directly to consumers, bypassing distributors. This process has already started and can lead to a loss of income for distributors.

Increased complexities

Therefore, distributors must also gear up for increased complexity in their operations as they adapt to such a blending of B2B and D2C models, which will require additional investment in technology and staff training.

And yet, by incorporating D2C practices into their business model, over time, distributors will be able to reduce costs and improve efficiency. They will gain better insights into consumer behaviour and preferences by working with D2C companies. This information can be used to make more informed decisions about product offerings and distribution strategies.

Distributors have, for decades, been known for their deep pockets, deep product knowledge and expertise in their respective sectors. D2C companies, on the other hand, often lack this level of expertise, and are not always equipped to provide personalized consultation and support.

Distributors also have a unique advantage in their ability to manage and distribute large quantities of products efficiently. D2C companies may struggle to match the inventory management and logistics capabilities of traditional distributors.

Distributors can differentiate themselves from D2C brands by leveraging strategic partnerships with manufacturers and other key players. Working closely with manufacturers and other partners, distributors can offer unique products and services not available through D2C channels.

The convergence of B2B and D2C models presents both opportunities and challenges for distributors. On the one hand, distributors can expand their customer base and revenue streams by adopting a D2C approach and leveraging digital to provide a more personalized, convenient buying experience.

On the other hand, this shift requires significant investment in technology and operations, as well as a shift in mindset.

While the transition may be challenging, those who can effectively navigate the B2B-D2C convergence will be well-positioned to thrive in the future of distribution. Good online B2B marketplace companies who move quickly to a blend of B2B-D2C will have the edge.