eCommerce Creating a Distribution Dividing Line?

For the past few years many have talked about eCommerce and have made investment plans. Now a number of these investments are coming to fruition and the conversation is evolving to “where is this going?”, “what are customers doing / wanting?”, “what do I need to do to stay ahead?”, “how do I catch up?”, “what is needed to recapture my investment / what will my ROI be?” along with questions relating to support of eCommerce from manufacturers and distributors.

And while this is in support of the future, there is a percent of customers for every  distributor that are either searching or purchasing online.

Our 2018 State of eCommerce, Customer Perspectives report gathered input from over 1350 electrical buyers plus we personally interacted with over 50 large MRO buyers and electrical contractors.  While actual “hunt and peck” web sales is small as a percent of sales, their input highlighted that there is much activity as well as pent-up demand. Last year we also asked distributors in a number of industries what their eCommerce perspectives were.

Which begs the question of, “will eCommerce become a digital divide among distributors (based upon size, willingness to invest, business timeline, personnel resources?) and accelerate the aggregation of revenue into fewer distributors?”

Digital Divide

Investments are needed in:

• Storefront tools
• Product content
• Marketing content and campaign tools, including marketing automation systems
• Technical and marketing personnel (and we’ve seen an increase in the number of “digital marketers / specialists” being hired by distributors and manufacturers
• Capturing customer information (and maintaining it)
• And more

And this is aside from the process changes eCommerce can affect within a distributorship that relate to pricing, inventory accuracy, shipping methodologies, taxation tracking and more

It has the potential, but there are resources / tools that are affordable for all to evaluate and invest. While larger companies have resources, we’ve also been keeping our ears open for cost-effective but robust solutions.

Manufacturers are also asking where “e” is going as it relates to tools to provide to distributors and possibly end-users / contractors as well as how to market to each audience and the role of social media.

To help in the “education” process, below are some B2B related tools that we’ve seen:

• There are two technology / eCommerce conferences next month. Unfortunately, they are on the same days.
  • The first is IDEA’s eBiz Forum, September 24-26. eBiz has 21 sessions / workshops covering issues relating to EDI and operations to content and storefronts.
  • Concurrently, B2B Next is being held in Chicago. This conference is multi-industry and has 47 speakers. The focus is to share “best in class” insights for all aspects of an eBusiness as well as omni-channel experience. A $400 registration discount is available until August 31^st.  Channel Marketing Group will be attending this conference and participating in a session as ElectricalTrends is a sponsor.
• Distributors have been challenged in identifying quality eCommerce platforms that are affordable, robust, “easy” to implement and can be launched in a timely manner. One system we’ve encountered that distributors should consider is ES Tech Group. While unknown in the electrical space, they have vast B2B experience.
• Below are some research reports and articles that we’ve seen that can assist in your research process:
  • 10 Ecommerce Mistakes B2B Businesses Make
  • Read how Crescent used customer feedback to increase the number of SKUs on its site, develop a mobile app (and we’re hearing this as a customer request / need more frequently) and launched a new site on a better platform (so they are on cesco.com 2.0)
    • Channel Marketing Group has tools to help customers solicit input on their site … essentially an eCommerce customer satisfaction survey.
  • From our research, distributors’ larger customers may go online to Amazon to search for “hard to find / obsolete” items. Amazon, through its Marketplace approach, has virtual inventory. Perhaps monetize your obsolete items. Here’s a guide to selling on Amazon Business. And remember, most manufacturers are selling something via Amazon … and products may be used for non-electrical applications or in geographic areas where you do not compete. We’re not advocating that this should be your eStore, but don’t discard as a potential outlet solely based upon emotion. Ask “could it profitably benefit my business?”
  • Rexel’s head of eCommerce is speaking at B2B Next. Read his thoughts on how eCommerce affects the business.
  • Thinking about SEO vs PPC and which is better for you, if either, to market your business. Check out this article.
  • We’ve had distribution clients ask about tools for online only incentive programs. Check out Loyalty Lion. It’s more of a B2C tool that could be adapted for B2B use and incorporate off-line sales by uploading a .csv file. Can use whatever you want, including discounts and merchandise, as rewards.  Or if you have a lighting showroom or are seeking to sell to facility managers outside your marketplace. There are limited systems that they directly integrate with but they have custom solutions. There may be other companies similar to them.

There are also:

• New tools that are coming out for manufacturer reps to help them support their customers … both end-users / contractors and distributors with additional product-related resources.
• Manufacturers are seeking to provide distributors with eMarketing content in the form of LinkedIn messages, landing pages, improved eCommerce content (and we’re hearing more of the larger distributors going direct for content), video, eCampaigns and more. A challenge for manufacturers, however, is identifying how to distribute the content to their distributors (they need the right contact).

The “divide” is quickly occurring based upon ability, or willingness, to invest. There are tools to close the gap, some just take ingenuity, understanding of your goals and what will meet your customers’ needs.

As we come into the 2019 planning season:

• For distributors
  • What is your technology / eCommerce investment plan?
  • What is your website marketing plan / calendar?
• As a manufacturer, understanding your key distributors’ plans? (and perhaps educating your reps on 1) what your plans are and 2) what you need to better support the reps and your key distributors?

How do you see the business changing due to “e” as we enter the proverbial “second or third inning”?