Articles

Dealing With Disruption

Categories: Distribution & Supply Chain, Innovations, Trends & Technology

The cleaning industry is experiencing major disruption. According to the American Institute for Cleaning Sciences (AICS), there have been more than 70 notable changes in company ownership in our industry’s supply chain since 1991 with most of these changes having occurred in just the last three years.

The majority of these mergers and acquisitions have taken place within the manufacturing and distribution channels as companies need to succeed in a new era of purchasing decision-makers. The day of relational purchases is almost over; modern buyers tend to remove themselves from brand loyalty and focus on their vendors value-added services, convenience, response times, ease of purchase, and bottom-line prices. Consider your own personal spending habits. In the past, you might have shopped at the local toy store since it was owned by a person living in your neighborhood. The owner knew you by your first name, asked about your kids, and might have sent you a holiday card. Now you can jump on your smart phone, place an order with an internet retailer in less than two minutes, and have it at your door the next day—all for less money than might once have been possible.

Mission Matters

One major online player—think the boxes with the omnipresent smile logo—is disrupting our industry at a pace almost too difficult to match. To help us understand this supplier’s motivation and mind set, let’s dive into its mission statement to examine how the company is innovating while maintaining a strong focus:

“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

Mission statements can be the strongest form of communication to customers and employees as they shine a light on the future of the company direction. With this in mind, we should take a moment to dissect this company’s statement as it relates to each type of ISSA member.

The first sentence of the mission statement: “Our vision is to be earth’s most customer-centric company.” Translation: This company wants to provide a customer experience that is positive before, during, and after the sale.

You might ask how a company that is strictly on the web can provide a positive customer experience after the sale is complete? A supplier of this magnitude doesn’t need to have all the answers immediately, but one potential answer might be to help customers create training videos that help them use their newly purchased item properly. Another option is to provide preventative maintenance on the equipment it sells. Both offerings could directly compete with value-added services from a distributor.

The second part of the mission statements reads “to build a place where people can come to find and discover anything they might want to buy online.” The latter half of this sentence is the most frightening thought to many professionals within the cleaning industry. When you peel back the layers of this statement, it doesn’t stop at products. Whether you are a business or homeowner, you often need services (think cleaning services). If those services are a part of the ecommerce world, what is left for distributors, manufacturers, and cleaning companies? How can anyone survive in a market so disrupted by innovation?

If internet business-to-business sales for one retailer has surpassed US$2 billion last year, how can it keep that momentum moving forward? The simple answer is adding services that go above and beyond product sales.

Most online companies would like to see a 20 percent sales growth month-to-month, meaning they need to find a way to diversify revenue while continuing to grow. One online supplier offers commercial cleaning services that are subcontracted out throughout the United States. This same supplier has already hired employees to perform cleaning services within households in the U.S. Northwest. This beta test is the first phase of a rollout planned to reach of 75 zip codes in 2018.

If online companies start sending direct employees into residential homes, what will prevent them from doing the same in the commercial space?

Confronting Challenges

The one challenge that the online retailers have faced over the past two years specifically is warehouse space. They have worked hard to overcome this by partnering on warehouse space and building state-of the-art facilities that enhance their speed of delivery—the backbone for online sellers over the years. With the space issue solved, they will move on past product and delivery speed. For companies of this magnitude, service offerings will become the new focus, which they consider a simple logistical enhancement. In fact, Walmart recently announced it is testing online ordering with same-day food delivery in various locations.

Competitive Questions

As 2018 moves forward, professionals within the cleaning industry will continue to scramble for answers to a very challenging question: How do I compete with online companies disrupting the entire industry’s supply chain? Many factors come into play so before you begin to change the culture of your business, ask yourself the following questions:

• Does your competitor offer expert consultative solutions?
• Does your current company culture demand excellence?
• Have you changed your sales model to accommodate current buyer trends?
• Do you have a high-functioning e-commerce website?
• Are you offering services that your online competitor can’t?

It’s just a matter of time until the online retailers realize the “secret sauce” that each profitable ISSA member has within its business. When that time comes, will you have a new secret recipe to continue your success? This might sound frightening to many of us but  it is also a very exciting time for our industry. Now is the time to begin evaluating your sales model, offer new services that differentiate your company from another, and focus on innovation. To continue to remain relevant in the cleaning industry, you must think about tomorrow today. 

About the Author.

Brant Insero is ISSA Chief Global Education Officer. He can be reached at [email protected]; phone, 847-982-0800.