Even if your company isn’t completely up to speed with its e-commerce strategy, here’s how to grab a bigger piece of the B2B e-commerce pie this year.
Even if your electrical distributorship doesn’t have its collective e-commerce act together, you can still make 2019 the year that you flip the switch and start doing a better job in this area.
“Distributors have long had a reputation for great customer service, but if you want to prevail in the digital era, you need more than great service—you need to make life easy for your customer,” Frank Isca writes in Why Distributors Need to Think More Like E-Commerce Companies.
“People no longer have the time or desire to hear a sales call or flip through a dense paper catalog,” Isca adds. “Instead, people are leaning towards performing their own research, inquiries, and purchases online and at their own convenience. Hence, e-commerce’s rapid success.”
Ready, Set, Go!
If your distributorship is ready to get a bigger piece of a B2B e-commerce pie that’s expected to reach $1.2 trillion by 2021, here are six strategies to help you get there:
- Realize that the company that kills you will look nothing like you. This is the name of Justin King’s latest keynote, and it sums up the B2B distributor’s e-commerce challenges perfectly. “Don’t be worried about the guy up the street or your national competitor,” says King, president at B2X Partners and author of Digital Branch Secrets. Instead, be worried about the organization that says, “We’re going to start from the customer perspective and build everything—their supply chains, enterprise resource planning systems, digital tools, etc.—out from there.” That’s the competitor that the independent distributor who didn’t take that approach, and instead relies on legacy systems, should be focused on.
- Understand that what brought you here isn’t going to help you win at e-commerce. “The things that make distributors good at what they do, including a focus on high margins and return on capital,” King points out, “are the same things that make distributors really bad at innovation and digital.” For example, when you try to take legacy systems, people, and processes and scale them into the digital world, it doesn’t always work like you thought it would. To avoid this challenge, King says distributors should be thinking seriously about how to innovate and “go digital” within the constraints of their existing organizations. If that isn’t possible, then consider setting up a new department or entity with a digital focus—similar to what Grainger did when it established Gamut.com, an e-commerce platform that helps customers find solutions for their challenging projects. “Part of the reason Grainger launched Gamut.com was to remove it from the constraints of the business that weren’t customer-focused,” says King, “and allow it to succeed or fail without those constraints.”
- Remove the friction that exists between the customer and the ownership of the product. This is Amazon’s business mantra, and it’s one that electrical distributors can borrow a page from. “It’s about looking at the customers and giving them exactly what they need,” says King. “Most distributors don’t do this naturally, so they have to be aggressive about it.” A good first step is to ask yourself questions like, “how would I start a brand-new company to compete with us?” “How big are the moats around my business?” and “What can we do to close those gaps?” Distributors, in particular, should rethink the branch model, which King says simply isn’t scalable in the digital world. The distribution center (DC) model, however, is very scalable. “If I were starting a new distributorship right now,” he says, “the first thing I would not do would be create a branch.”
- Capitalize on the trust you’ve already established with customers. As transactions become more and more complex, customers need trusted providers to help them not only through the buying process, but also with product support, maintenance, and repair. This is particularly true in the electrical industry, where many products and systems require technical and application support. “Capitalize on the trust and the expertise that customers have come to expect from you,” says Barry LaBov, president and CEO at LABOV Marketing Communications and Training. Use this approach when developing content for your website, for example, versus using what LaBov calls “commodity-driven language.” As part of that strategy, LaBov says distributors should be using customer relationship management (CRM) systems that help them with customer outreach—including email, phone calls, and in-person visits—all of which should capitalize on the trust that you’ve already established with those buyers.
- Avoid the cookie-cutter approach to e-commerce. When Denise Keating, CEO of DeKalb, Ill.-based DATAgility, looks around at electrical distribution’s online presence, she sees a lot of similar-looking websites. That’s not a good sign, she says, because it essentially commoditizes the electrical equipment/supply buying experience across multiple companies, none of which stands out from the other. “They all have the same look, the same functionality, and the same content,” says Keating, who tells distributors to break that mold by working harder to differentiate themselves online. Do that by elevating your content game and focusing on creating a better user experience online. “The distribution channel as a whole provides far greater value than online retailers do,” Keating says, “but it doesn’t do a very good job of calling attention to that fact on their websites.”
- Give customers total visibility into the buying process. Regardless of where the customer started his or her order—via email, web, phone, or even fax—the distributor should be able to seamlessly pick up on that order and then provide as much information as possible about it back to the customer. This only works when companies have their e-commerce systems integrated with their ERPs, CRMs, and other systems. “Frankly, some of them don’t even have all the right systems, let alone the integration among them,” says Keating, who tells distributors to deploy omni-channel strategies. Defined as the integration of different methods of shopping available to consumers (e.g., online, in a physical store, or by phone), omni-channel means that the contractor who placed an order at the store counter can go online to get the invoice number, invoice total, delivery date, and other information. “Customers get a holistic view of their activity,” says Keating, “versus just bits and pieces.”