My concern of the moment is technology and distributor websites.
Technology is a huge challenge for our industry. I’ve heard it said that the electrical channel, especially distribution, is years behind the rest of the world. Maybe so, I’m not smart enough to venture an opinion on that one.
The latest technology challenge, and it has been around for a few years, is websites and eCommerce.
And while we all love Amazon, it isn’t taking over the electrical industry tomorrow but it does generate conversations about the need for a website that does more than show your locations and supplier list.
My concern is that distributors, especially small and mid-size ones, are not doing much.
My concern is that I believe that, as an industry, we fall into three camps.
- We don’t think all this is important. I’ve had electrical distributors tell me that they are not ready for e-commerce and neither are their customers. Depending on the geography and the customer base I believe some of them could be right. What I’m hoping is they start to slowly and methodically address the situation today so that next year, or in five years, when it becomes a dealbreaker they are onboard and running with something.
- Then you have those that are sort of in the middle. They’ve got some technology, not just e-commerce, but CRM, accounting programs, social media, and others. The issue is they are just maintaining. They’re not thinking about what happens next and they’re not doing a reasonable job of looking around the industry (and other industries) to see what’s going on.
- Then we have my favorite, and last, group. These guys all think they can become AMAZON. Amazon is not better than the various technologies that most distributors have, it’s just different. A lot of these guys tend to want to buy every new piece of software, hardware, and anything else that comes on the market.
Lately, I have been speaking with several technology consulting firms. Some things I already have been taught seem to be appropriate to say at this point. Many say they have all the answers, cradle-to-grave, and of course, you will need all the options on day one. And that they are the perfect one-stop shop
It’s the cradle and grave comment that concerns me. No electrical distributor, no consultant, no manufacturer, or any other business you can think of is good at everything. So be very careful when going all-in on one solution off the deep end of the pool. There are risks, however, in piecemeal approaches, the first group will tell you that. So, whatever you do, I strongly encourage you, no matter where you are on this journey, to walk slowly with your eyes wide open and don’t rush. Look at multiple solutions and approaches.
I’ve talked to a number of technology companies. I know David Gordon has also. There’s much going on and we may be just able to guide with from our experience and conversations. Channel Marketing Group also has some services to help you get feedback from your customers as you travel this journey.
Closing. One of my weaknesses is that I can’t talk without preaching. That’s never going to change. I do appreciate your indulgence. Let me know what you think about distributors and their investment in technology. What is your experience? Your concerns?
1 Comment
The largest threat to the traditional wholesale electrical channel isn’t Amazon as much as it is The Home Depot, Lowe’s (Residential) and Grainger (industrial). The business that is most at risk is residential. Home Depot and Lowe’s have the scale, location, supply chain and are quickly gaining the knowledge to differentiate and add value. Distributors that aren’t investing in ecommerce capabilities need to be investing in expanded service offerings.
Ecommerce parallels the introduction of the internet and eventually social media.
During the first iteration it was enough to have a website and to have social media channels set-up (distributors were ‘proud’ to be online). It quickly became apparent that what differentiates online is content – distributors have to do something meaningful with their websites and social media (INVEST in dynamic content creation that adds value – no one cares when a business announces its “National Hot Dog Day” on their social medial channels. But it does say A LOT about that business’s investment in content).
Similarly, it isn’t enough to have an ecommerce site and attributed product data. What differentiates in ecommerce is User Experience. I submit most businesses still do not truly understand User Experience, let alone Customer Experience (its easy to claim, difficult to execute). An effective Customer Experience employee should have organizational power, a deep understanding of the business, be able to drive technology deployments and be driven by a passion for customer advocacy. The ‘culture eats strategy for lunch’ axiom has never been more true.
Sales oriented businesses like to say, “everyone is in sales”. Sales oriented businesses need to adopt a, “everyone is in customer experience” philosophy. And this needs to be driven from the CEO down. Hint: interactions with our internal IT Department are a good litmus-test for how important ‘customer experience’ is to your company.
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