management discussing how digital investment is the key to success for distributors

Digital Investment is the Key to Success for Distributors

Ditch the Spreadsheets and Make Transformative Investments for Sustainable Growth

Distributors should undoubtedly take notice of all the talk surrounding the inflation rate in 2022. In June, inflation increased to 11.3% compared to a year earlier. Such high inflation in the US and worldwide will likely continue well into 2023. With this big economic strain, smaller and mid-market businesses will face unprecedented challenges if they’re not already. The best way to stay ahead of the fold and protect your profits from inflation is through digital investment.

How did we get here?

Even at the start of 2022, many businesses were still trying to adapt to living with the Covid-19 pandemic. Two years removed from the initial shutdowns, new-variant waves, uncertainty, and shifts in business behavior mean that “temporary” remote-work arrangements are now permanent.

In February, the invasion of Ukraine by Russia sent a rift through the global supply chain. We’re sure you’re well aware of the surge in energy prices that are only now starting to cool down from their mid-summer highs.

The consequent rise in the inflation rate spurred serious thoughts about the threat of a recession. If you weren’t anxious about change and strain on the distribution industry before, you are now.

What’s in Store if You Don’t Act

It’s not hard to imagine what happens to your distributorship when times get tough. The last two years of supply chain disruption, worker shortages, inflation, shutdowns, and lots of change have probably numbed you to the growing list of “threats,” but now is not the time to ease off the gas.

Without the proper tools in place, times of economic hardship result in falling customer retention rates, customer satisfaction rates, and order size. That’s no surprise. However, it is a surprise how simple it could be to mitigate and prevent such outcomes in the short and long term.

Take Action with Digital Investment

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In Grant Thornton’s International Business Report (IBR), 54% of senior executives at 10,000 businesses in 29 economies strongly agreed that they expect to increase profits in 2022 as the inflation rate continues to wreak havoc. More interestingly, the businesses that forecasted higher profits said they were:

  • Investing in noticeably more areas of digital/IT than the global average
  • Focusing more on reducing operational costs and improving efficiencies
  • Increasing digital spending as a direct result of inflation, with 70% agreeing that “the risk of inflation is accelerating investment in digital/IT activity within my business.”


Similarly, in a survey of 199 CFOs, Gartner revealed that 46% reported that they would be scaling up enterprise digital investment regardless of inflation, and 32% will maintain their current investments for at least the next two years.

Alexander Bant, chief of research in the Gartner Finance practice, reports that businesses that make the right digital investments have 2.7x higher customer retention, 1.6x higher customer satisfaction rates, and 1.9x higher average order value. The survey reveals that the vast majority of CFOs plan to accelerate the digital transformation momentum in times of uncertainty, not backpedal into older, albeit cheaper in the short-term, ways.

According to Elaine Daly, global head of business consulting for Grant Thornton, high inflation in 2022 will significantly impact businesses by increasing the cost of doing business and creating market uncertainty. But tactful digital transformation can offset this. In fact, the right digital investment can have a long-term deflationary effect on business costs and, therefore, the price of products and services.

Lasting Change

The pandemic forced many of us to swap in-person relationships for virtual ones. While many people have returned to office in some capacity, not everyone has or will. Such pandemic-driven structural changes are becoming permanent means that businesses will need a strong deployment of technology that further enables teams to succeed in whatever social or economic obstacles the future holds.

Paramount to that success is remaining accountable when investing in your business’s needs. That means questioning the status quo. Are you using spreadsheets to track pricing changes? Are you relying on gut instinct with your existing customer base? Are you processing your ERP data manually? If the answer is yes to any of those questions, ask why.

White Cup_Blog_t's time for distributors to ditch spreadsheets-02The harsh reality of our economic state is that processes that are “good enough” are not. Distributors cannot afford to be fast and wrong or slow and right. They can’t be good enough, or they’ll leave business, money, and time on the table.

Manual analysis, which is commonplace for many distributors, is an active hindrance to effectively managing and utilizing your data. With a solution like White Cup Pricing, it’s possible to be precise and agile against fluctuations. With White Cup CRM, workflows make crushing sales goals easy and busy work a thing of the past. With White Cup BI, your data automatically transforms into actionable insights.

This is just scratching the surface. The takeaway is that distributors can use technology to take a more granular approach rather than uniformly passing on costs resulting from 2022’s high inflation rate. Using White Cup’s revenue intelligence platform, it’s easy to customize your analyses, uncover optimization, and act with all of your data in mind. With digital investment in revenue intelligence, the distribution industry can protect itself from the most severe economic threats.

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