There are many new trends in distribution recently.
With the increased popularity of E-Commerce around the world, shopping demands of modern customers change. Mainly, the traditional channels of distribution are becoming less popular these days.
Some recent trends in distribution channels in recent years are as follows:
- Growth of online shopping. The growth of E-Commerce is not only confined to consumer markets, but it is also used to trade industrial products and for business-to-business services as well. More and more business transactions are conducted via mobile phones and tablets such as online banking or selling insurance policies bypassing the traditional distribution channels.
- Need for prompt deliveries. Businesses selling their products online need to possess strong logistics capabilities to minimize delivery time to customers. Offering speedy transportation can be used as an offensive weapon to help a business gain competitive advantage in the marketplace. The business shall gather market information at the retail level about customer locations.
- Instant access to information. Increased use of technology has allowed today’s customers an easy access to high-quality information via the Internet. With the ability to purchase goods and services online, they shop very differently from how they had done in the past. This has increased price sensitivity of customers as they have more information about products sold by different companies.
- Reduction in costs. By using fewer intermediaries in the distribution channel thanks to trading online, companies are able to lower the costs. And the lower the costs, the lower the price of a product tends to be. Hence, businesses have the ability to reduce prices for final consumers. For instance, it is cheaper to buy directly from the seller than going through wholesalers and retails who each charge for their services by adding own profit margin.
- Omnichannel strategy. This distribution strategy means using a variety of different distributions channels to sell and market products in order to give customers with a fully integrated shopping experience. Omnichannel strategies unite user experiences across multiple sales points including own brick-and-mortar stores, websites, other retailers, apps on mobile devices, agents, etc. More and more businesses start to sell directly to customers as well as supplying retailers.
- Variable opening hours. These days some businesses offer longer store hours or even operate around the clocks. With more and more shopping done by car via drive-through facilities, businesses are able to generate sales revenue 24 hours a day, 7 days a week. The product is always available for purchase (day or night). However, in some countries such as in Germany, work hours are strictly regulated due to inflexible employment laws.
- Integration of goods with services. When goods are merged with services, the business is able to offer a complete package to consumers. Goods and services are sold and distributed to customers at the same time as one product. Some examples of increasing integration of services include air traveling where air flights are sold as a service while customers can also purchase goods in duty free stores at the airport while waiting for their flights.
- Shopping centers & Retail parks. They perform the functions of wholesalers as well as retailers engaging in the so called vertical marketing. These places hold stocks in their own warehouses, hence are able to offer a range of diversified products. By owning a few links in the distribution chain, the power shifts from manufacturers to retailers, hence an increase in trade marketing.
- Supermarket’s own brands. More and more supermarkets (mainly large supermarket chains) have started offering their own products under their own brands. These products are of comparable quality to branded products by offered for much lower prices to customers who shop at the supermarket. Additionally, supermarkets offer huge products lines as they sell hundreds or even thousands of different products ranging from fresh foods to home appliances.
- Discount stores. There has been an emerging trend of second-hand shops. These outlet malls offer a variety of 2nd-hand goods, such as a clothing, furniture or electronic appliances. Customers can very often buy and sell high-quality secondhand items in these thrift stores.
A product is unlikely to be successful if customers find it difficult to purchase. So, place is a vital part of the Marketing Mix. Producers must always decide how to get their product to the customer.
In short, distribution is strategically important to business marketing. As it traditionally includes choosing an appropriate channel of distribution, managing the distribution channel and logistics, new trends in distribution emerge and will continue despite the challenges confronted.
