Mumbai: The year 2016 was the year of acquisitions for the IT distribution industry. Whether it is Ingram Micro’s acquisition by the Chinese conglomerate HNA Group or the merger of Avnet’s technology solutions group into Tech Data Corp, the distribution business witnessed major consolidations in 2016.
These acquisitions and mergers are clear indications of the increasing significance of “value-add” in the distribution space. As distribution houses are constantly on the lookout for new value added trends, Digital marketing will be one of the key thrust areas for distributors in 2017. Similarly, it will be inevitable for distributors to focus more on emerging technologies to win a competitive edge in the industry.
Boom Of Digital Marketing
Historically, distributors have been considered as an extended arm of a vendor’s sales and marketing team. The role is now shifting towards value-add, where distributors are acting as consultants to vendors and advising them on their market expansion plans. Similarly, distributors are focusing on integrating their value added services into their partners’ business. Digital marketing campaigns are rapidly replacing traditional ways of marketing such as road shows, channel meets etc.
As businesses are largely embracing digital tools, digital marketing is an effective tool for distributors that can strengthen relationships among distributors, channel partners and product companies in a most efficient way. “Distributors are constantly on the lookout for new value adds trends, Road shows and channel trainings are the things of the past. Digital marketing can strengthen relationships between distributors and product companies; benefiting both if they work together”, said Rajesh Goenka, Vice President, Sales & Marketing.
“In order to maintain a competitive spirit, it is important to adapt digital marketing strategies that can actually boost your business sales. In 2017, we will be focusing on creating new verticals and will align the current base into channels, SI, Corporate, Surveillance verticals”, said Gopal Pansari, Director, Savera Digital.
Also Read: Tech Distribution Consolidates; Tech Data Acquires Avnet
Emerging Tech To Lead
In order to maintain a competitive spirit, it is important to adapt digital marketing strategies that can actually boost your business sales. Live Video streams, use of AR and VR, mobile and Apps will be some of the key digital marketing tools dominating the marketing in the channel in 2017.
Videos have been immensely popular kind of digital practice for the past few years, but now channel partners are also using a live stream in order to get the most views and engagement from the target market. Similarly, the ubiquitous presence of handheld devices like mobiles is fading away the use of desktop and clearly indicates that the smart money rests on mobile-focused internet marketing .Mobile search and mobile optimization will, therefore, be a top priority for digital marketers in the year 2017.
The industry will also see an increased immersive experience taking place in the channel. Augmented reality (AR) and virtual reality (VR) are two technologies driving this mentality forward in the channel marketing too. There are different apps available which offers all the features of mobile-optimized website, but in a more intuitive, convenient and accessible way. Distributors are realizing its potential, and 2017 will be a pivotal year in mobile app development. Networking solutions and Internet broadband related product categories will be the key drivers. Lastly, home automation will also trigger the IT demand.
“In 2017 more than any other time we will the see the greatest variety of technology to sell. Distributors will now be looking to expand their portfolio, try to get their hands into newer technologies like 3D printing, VR etc.”, Goenka said.
Channel Expansion To Be Key
While distributors are rapidly diversifying into new technology domain and exploring services focused business model, i.e. the core business expansion remains the same. The year 2017 will likely see more consolidations in the distribution space. At the same time, distributors will continue to focus on their geographical expansion.
“As a major distribution company in India, our obvious aim is to drive the most amount of revenue from the business, but except that we also focus on to reach more customers and engage in different market opportunities. In the next year, we are planning to focus on better customer experience and partnering with more channel partners”, Pansari said.
Distributors will need to focus on optimizing their profitability and their inventory. However, Rashi Peripherals would focus on an organic growth model in 2017. “Rashi will continue to hold extensive training programs in Tier -2 and tier-3 cities as well, Rashi’s focus will continue to be growing sustainable, and continue to expand our comprehensive breadth. We will continue to focus on business expansion, but we will not involve ourselves in the rat race. Flexibility and innovative business practices will continue to be our focus area”, Goenka said.
Also Read: Top Line Vs. Bottom Line: Is The Channel Perplexed?
Diverse Role Of Disties
IT is a fast changing world with a host of new innovative technology, product and service offerings coming in the market each year. Different distribution channels have tremendously evolved and innovated new strategies with the introduction of new technology that drive “value-add” within the channel. Hence, distributors have diversified incredibly into various domain in order to match the pace of technological up gradation. Hence, distributors will continue to play a crucial role in the channel in 2017.
Distributors are diversifying and adding a range of services in their traditional fulfilment business. According to the Global Technology Distribution Council, distributors will now offer more services, including education and training. Similarly, mobility and digital technologies such as AR, AI etc. will be the areas of diversification for distributors. Considering the rapid growth of Cloud business, distributors would play an important link in the cloud deployment process, even with the rise of managed service providers (MSPs) and Software as a Service (SaaS).
According to experts, distributors will continue to diversify into new technology areas with more focus on service led business. Although their models may change to adjust to new technology delivery methods, the core function will remain same as a vital link between vendors and channel partners in 2017