• Revenues via direct sales are expected to increase from approximately £93bn in 2011 to £109bn in 2012;
• 27 percent more wholesale/distribution (WD) companies plan to add a direct sales channel over the next year;
• Three quarters (76 percent) of wholesalers think that the failure to expand their business through investment in eCommerce channels could present a risk to their business;
• 52 percent of WD companies report key challenge in adding a direct sales channel as integration with core ERP/financials systems;
• International sales will represent another key avenue for growth, with £118bn revenues expected in 2012, up from £101bn in 2011;
• M-commerce will also deliver a surprising benefit, with revenue expected to reach £80bn in 2012.
Research sponsored by NetSuite, Inc. (NYSE: N), the industry's leading provider of cloud-based financials / ERP software suites, has today revealed wholesales/distribution (WD) companies revenues via direct sales are expected to increase from approximately £93bn in 2011 to £109bn in 2012. The research is based on economic models provided by the Centre for Economics and Business research (Cebr) and primary research of 50 UK wholesale/distribution business managers conducted by Vanson Bourne and is announced by NetSuite today.
Despite a continued period of economic uncertainty, the majority (66 percent) of UK WD 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 percent growth in the number of WD companies selling direct to end users over the next year.
Those who are not already capitalising on eCommerce consider it a threat to the future growth for their business: three quarters (76 percent) of WD companies think that the failure to expand their business through investment in eCommerce channels could present a risk to the business. Over half (52 percent) of WD companies see the key challenge in adding a direct sales channel, such as eCommerce, as integrating it into the company's core ERP/financials systems.
Roman Bukary, AVP of Manufacturing and Wholesale & Distribution at NetSuite, comments "In challenging economic times, savvy WD business leaders rely on multi-channel 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."
As well as eCommerce, international sales are expected to have an impact on the bottom line and WD businesses expect £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 are the greatest.
A third path to growth in the year ahead is the adoption of M-commerce as a sales channel. It is currently a significant driver of revenue growth for those firms which make use of this technology and M-commerce revenue is expected to reach £80bn in 2012, up 20 percent 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 eCommerce, M-commerce and international sales are identified as potential sources of this revenue," comments Colin Edwards, Economist at Cebr.
NetSuite Wholesale Distribution Edition is the only cloud-based integrated business suite for wholesale distribution, offering automated order processing, inventory management, demand planning, shipping integration, financial management and sales force automation capabilities alongside a fully-featured eCommerce solution.
About the research
The report is based on primary research conducted by Vanson Bourne in April 2012 amongst 200 retailers with at least one retail store, and a minimum of 20 employees. It included seven of the top 10 retailers in the UK. The same study polled business leaders at 50 wholesale/distribution companies. The data from this research was used by Cebr to create an economic model looking at the potential for some of these trends to play out across the wider industry and present the broader economic picture.
About Vanson Bourne
Vanson Bourne is a specialist research-led consultancy carrying out user research within a technology context. Vanson Bourne's clients range from start-ups to well-known companies that need expert guidance, delivering robust and credible research-based analysis.
Cebr is a leading independent commercial economics consultancy with particular strengths in macroeconomic and market forecasting.
Today, more than 12,000 companies and subsidiaries depend on NetSuite to run complex, mission-critical business processes globally in the cloud. Since its inception in 1998, NetSuite (netsuite.com) has established itself as the leading provider of enterprise-class cloud ERP systems for divisions of large enterprises and mid-sized organisations seeking to upgrade their antiquated client/server ERP systems. NetSuite excels at streamlining business operations as demonstrated in a recent Gartner study naming NetSuite as the fastest growing top 10 financial management systems vendor in the world. NetSuite continues its success in delivering the best cloud ERP/financials suites to businesses around the world, enabling them to lower IT costs significantly while increasing productivity, as the global adoption of the cloud is accelerating.
Follow NetSuite's Cloud blog, NetSuite's Facebook page and @NetSuite Twitter handle for real-time updates.
NetSuite and the NetSuite logo are service marks of NetSuite Inc. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between NetSuite and any other company.