Over the past 15 years, the Internet has transformed the way consumers buy everything from books to music to insurance to travel. Giants such as Amazon and Google promise a future filled with instant-access information, interactive eyewear, and drone delivery of our groceries.
But another change is afoot that threatens wholesale distribution business models as more procurement professionals log on to AmazonSupply and Google Shopping. Worth about $7.2 trillion a year, the business-to-business market is a target that Amazon and Google can no longer ignore.
The question is not whether Amazon and Google will be a threat in B2B, but rather which customers, purchase occasions, and categories will be attacked first. In our view, AmazonSupply, Google Shopping, and likely one or two more “new” entrants, will have a profound effect on many wholesale and distribution sectors over the next five years. In fact, we are already seeing the early stages of a wave of innovation as the most forward-thinking wholesale and distribution businesses invest significant time and resources into becoming potent multichannel competitors.