Direct sales growth sees more cutting out the middleman using online sales technologies
Direct sales growth sees more cutting out the middleman using online sales technologies
New research has found online, mobile and international direct sales are predicted to add £16 billion to UK wholesale and distribution companies’ revenues in 2012.
Revenues for these companies via direct sales are expected to increase from approximately £93bn in 2011 to £109bn in 2012, according to the research based on economic models provided by the Centre for Economics and Business Research (Cebr) and primary research of 50 UK wholesale and distribution business managers conducted by Vanson Bourne.
Fast route to market
Roman Bukary, associate vice president of manufacturing, wholesale and distribution at the research’s sponsor and cloud-based financials and enterprise resource planning (ERP) software vendor NetSuite, commented: "In challenging economic times, savvy wholesale and distribution business leaders rely on multichannel sales strategy, invest in technology to innovate, and focus on delivering value-add customer services – all in pursuit of profitable growth and new markets without being burdened with spiralling management and infrastructure costs.”
Despite a continued period of economic uncertainty, the majority (66%) of UK wholesale and distribution businesses predict positive revenue growth this year. To achieve this, they are adding a direct sales channel to create new sources of revenue, and there will be a 27% growth in the number of in their selling direct to end users over the next year.
Three quarters (76%) of wholesale and distribution companies think that the failure to expand their business through investment in e-commerce channels could present a risk to the business. Over half (52%) see the key challenge in adding a direct sales channel, such as e-commerce, as integrating it into the company’s core ERP/financials systems.
Looking farther afield
As well as e-commerce, international sales emerged as another significant trend, with wholesale and distribution businesses expecting £118bn from international sales in 2012, up from £101bn in 2011. In addition, when looking at the absolute sizes of these revenue streams, international sales were the greatest.
A third path to growth in the year ahead will be the adoption of mobile commerce (m-commerce) as a sales channel. The research found it is currently a significant driver of revenue growth for those firms that make use of this technology and m-commerce wholesale and distribution revenue is expected to reach £80bn in 2012, up 20% from 2011.
“Wholesale businesses are largely positive in their outlook for revenue growth. The survey results show that in 2012 direct sales are likely to be important revenue streams, and growth in the adoption of e-commerce, m-commerce and international sales are identified as potential sources of this revenue,” added Colin Edwards, Cebr economist.
