Digitalisation is a blessing and a curse, an opportunity, and a threat. Nearly 900 German wholesale companies took part in a recent study by Roland Berger and the German Wholesale, Foreign Trade and Services Association (BGA). Almost all of them, 94%, believe that digitalisation is driving change in their sector. Two-thirds are aware of the challenges it poses.
In particular, the companies surveyed see themselves threatened by digital platforms when it comes to pricing (62%).
According to the BGA, the following developments, among others, are putting wholesale under pressure:
• Increased price transparency is putting pressure on margins at all levels of distribution, with service becoming increasingly separate from product.
• Manufacturers are increasingly recognising and embracing the appeal of digital channels to end customers. They are developing a better understanding of their customers through digitally captured customer and usage data. They can identify and meet their needs at an early stage – without another intermediary.
• Digital trading platforms, intermediaries and specialist retailers who buy directly from the manufacturer are intensifying competition.
But wait, is dynamic pricing the answer? What about customer loyalty? Let’s dive in.
Customer loyalty and dynamic pricing in B2B-Wholesale
In the age of e-commerce, specialist wholesalers in Germany with 5,000 to 10,000 customers and 20,000 to 100,000 items face intense competition. Increased price transparency and the attractiveness of digital sales channels are major challenges.
To survive in this dynamic market environment and build long-term partnerships, intelligent, proactive pricing (dynamic pricing) is essential. In this article, we explore how sales analytics, predictive analytics and pricing analytics solutions can help find the optimal end price for each customer, strengthen customer loyalty and drive B2B wholesale success.
B2B sales have traditionally been about long-term partnerships. But in the age of e-commerce, wholesalers need to rethink their customer retention strategies. Dynamic pricing allows them to set individual prices for each customer based on predictive analytics.
And the good news is that sales analysts are not alone. Artificial intelligence (AI) can identify risks and opportunities faster and more accurately by analysing customer and usage data. As a result, companies can tailor offers to their customers, increasing customer satisfaction and loyalty.
The right sales analytics software can help wholesalers increase the likelihood of purchase per customer and boost sales. However, a “now everyone pays more” approach can have the opposite effect.
Fixed prices and long-term contracts in the context of dynamic pricing
The use of fixed prices and long-term contracts has long been a proven strategy in B2B wholesale to ensure stability and predictability. However, in the age of dynamic pricing, these rigid pricing structures could be the undoing of wholesalers. By using predictive pricing, companies can determine the optimal end price for each customer and implement flexible pricing strategies that adapt to current market conditions.
By bringing some dynamism to pricing and using AI in sales, industrial distributors can better control margins and potentially open new business opportunities. The key is to find the right approach that balances the interests of both the distributor and the customer.
Industry experience and a dedicated B2B sales tool make all the difference, because B2B wholesale is different from B2C. If you are considering using AI to simplify your pricing policies, please contact us.
Solutions for B2B Wholesalers
A key digital transformation challenge for B2B wholesalers is getting the technology right. Many companies in the sector need more internal resources, skills and data understanding to get started before their competitors. Part of the blame lies with individual ERP systems, their overworked sales force and the need for a more precise management strategy.
Faced with these challenges, wholesalers need concrete solutions to remain competitive and successful. For example, the integration of sales analytics software, predictive analytics software and pricing analytics solutions can make a huge difference.
These technologies enable wholesalers to develop pricing strategies based on data and predictions rather than guesswork. The combination of data analytics and predictive pricing can not only improve customer loyalty, but also create new business opportunities. It is a common and dangerous mistake to separate pricing from churn prediction or product bundles. If you offer 10,000 products to your customers, do you think price is the only competitive factor?
In short, wholesalers need to embrace the opportunities of digital and adapt to change. Having the right tool and the right partner is crucial.
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Intelligent, predictive pricing: the key to success in B2B wholesale – Conclusion:
B2B wholesale in Germany faces significant challenges due to e-commerce and increased price transparency. Intelligent, predictive pricing (dynamic pricing) can be the key to success, but with some caveats.
Using standard sales analytics software, predictive analytics software and pricing analytics solutions, wholesalers can optimise their pricing strategies to strengthen customer loyalty, increase the likelihood of purchase per customer and build long-term partnerships.
Embracing the opportunities of digitalisation and adapting to change is essential to compete and thrive in the long term. The future of B2B wholesale lies in the intelligent use of data to predict customers’ needs and provide them with tailored offers at the right price and at the right time.
I WANT PREDICTIVE ANALYTICS FOR B2B SALES.
Further Read (in german language):
Digitale Transformation des Großhandels. Ed.: Roland Berger
3 Beispiele für Predictive Analytics im B2B-Vertrieb. Ed.: Vertriebszeitung.de