The Big Three Need To Define Who They Are Before Someone Else Does It For Them
Tech Data and Ingram Micro, the two largest multinational distributors left standing out of the dozen or so that crowded the market in the 1990s, have proven capable of successfully maneuvering through incredibly challenging business climates.
Both companies have never received the admiration they deserve for building long-term shareholder value even while constantly being squeezed by suppliers and customers alike. As a distributor, you couldn't survive as long as both these companies have without management teams that are adept at performing under conditions that never have, and never will, afford them the luxury of capturing anything close to double-digit margins. I'd like to see any vendor do that.
Vendors have always taken for granted the value these players bring to market in terms of credit, warehousing, technical support, etc. But after all the changes in the broad-line distribution business over the past five years and the shakeout that drove many competitors out of business, I'm not sure any of us can identify the ultimate marketing positions that Tech Data and Ingram Micro wish to convey.
It's clear that Synnex intends to be the distributor that solution providers think of as the pricing leader. But if we did one of those word-association studies with solution providers, in which we showed them the logos of the three distributors and asked each to say the first word that popped into their head, the answers would be anything but consistent, even for Synnex.
That may not be all that bad in the short run, but over the long haul, the big three distributors need to be clearer in their market-differentiating messages.
Trips to all three companies' Web sites don't really clarify the positions they want to take. Tech Data describes itself as "The Difference In Distribution." That's catchy, but I'm not sure I know anything more about the company after reading it. Synnex says it's "A Global IT Supply Chain Services Company," but what does that mean to a solution provider customer? As for Ingram Micro, its site says it is "The largest global wholesale provider of technology products and supply chain management services." That's a mouthful, for sure.
Marketing is like a political campaign: If you do not define who you are, you can be sure your competition will.
And that competition is always changing. Today distributors compete against their PC suppliers as well as other distributors. Going forward, eBay will also become a larger competitor.
Ten years ago, just before the open-sourcing model blew open the door and put PCs in the hands of distributors as well as the franchisors, the role that distributors played was more easily defined. When anyone mentioned Tech Data, you thought of a distributor that provided customers with the products and support necessary to compete in networking and other technically demanding markets. It was a widespread belief that Ingram Micro led with price and had the broadest product lineup.
Clearly, the market has changed, and Tech Data and Ingram Micro are much different companies. Both are more critical to the success of more partners on both the supplier and solution provider side. But with Synnex in the mix now, we are increasingly going to see comparisons made between all three.
If each of these distributors doesn't get out and define its strategy with strong, comprehensible marketing, someone else will,and that someone else may or may not do it in a manner that is beneficial to their businesses.
Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].