By Bridget McCrea
Whether you want to admit it or not, Amazon is knocking on your door. And not far behind this online behemoth are online platforms like Alibaba, an international trading site that holds itself out as the place to go to find quality manufacturers, suppliers, exporters, importers, buyers, wholesalers, products, and trade leads. And these two aren’t the only B2B online games in town—within certain business niches and geographic areas other possible threats are literally lurking around the next “corner” online.
Some electrical distributors have embraced these market shifts and put money, time, and effort into their own e-commerce strategies, but others are still ignoring it. Maybe they think it “can’t happen to them,” or they assume a generalist like Amazon can’t match them on technical and product expertise. In other cases, these distributors have already tried and failed in the e-commerce realm and would rather just stick with what works. Whatever the reasoning, those companies that ignore e-commerce are doing themselves a disservice.
“My sense is that distribution is not paying attention to the legitimate threat that Amazon already is—and the greater threat that it’s going to become,” says Christopher Brown, CEO at Wiedenbach Brown Co., Inc., in Hawthorne, N.Y. “As more and more lighting becomes commoditized, and as Amazon gets even more sophisticated in how it handles things like Ariba-type bidding (Note: Ariba is a cloud-based B2B marketplace where buyers and suppliers find each other and do business within a single, networked platform), the impact on the electrical distribution industry will continue to grow.”
Jumping into the Fray
With four decades of experience in the industry, Brown says his discussions with NAED members about the looming threat of online e-tailers and B2B exchanges usually end with statements like: “It just doesn’t matter because we’re not impacted by Amazon Business.” He sees this as a dangerous stance, particularly for the distributor that thinks Amazon can’t go out and hire its own stable of lighting engineers to meet its customers’ technical needs. “Amazon can basically buy expertise in a minute,” Brown says, “so if you’re thinking that they ‘can’t do what you do,’ you’re wrong.”
The good news is that—as we mentioned in the recent tED Magazine article, If You Build It, Will They Come?—it’s not too late to get into the e-commerce game. And while you probably won’t be able to mobilize an Amazon-like presence overnight, there are ways to position your distributorship for success in the e-commerce. Here are six strategies you can start using today:
- Acknowledge the threat, and don’t run away from it. It’s going to take more than strong customer relationships, good customer support, and decades of technical expertise to go head-to-head with a force like Amazon. Distributors can do it themselves by at least acknowledging these facts and then taking the necessary steps to improve their e-commerce approaches. As Brown pointed out, too many electrical distributors are burying their heads in the sand in hopes that Amazon won’t tread on their territories.
- Start now, even though business is good. With the Great Recession fading in the rear view mirror, and with more projects coming online, industrial distributors are watching their bottom lines return to some semblance of normalcy in 2016. But that doesn’t mean they can rest on their laurels. “In some cases, business is great right now. People are busy,” says Brown, who points out that new and retrofit lighting projects are both pretty plentiful right now. The maintenance, repair, and operations (MRO) side of the business, however, is feeling the impact of online giants like Amazon. “It might take 5-10 years, but a little bit of the MRO business goes away every single day,” says Brown. “That’s a place that Amazon and Alibaba (if it comes to the U.S.) could absolutely dominate—namely because the products continue to become more and more commoditized every day.”
- Focus on creating a personalized experience for your customers. Having a light, personalized, and casual tone in your communications actually boosts conversions and brand loyalty. In fact, Gartner predicts that by 2018, B2B companies with effective personalization on their e-commerce sites will outsell by 30% competitors without the same level of personalization. “Personalization — or perhaps better, positioning yourself like a real person in relationships with other real people — is the number one overlooked factor in B2B e-commerce,” writes InboundJunction’s Nadav Dakner in The 4 Most Overlooked Factors in Your B2B E-Commerce Success. “This is because B2B businesses fear coming off as unprofessional, amateur, or ‘small time.'”
- Populate your site with useful, relevant content. After contact information, B2B buyers say pricing is the most important content on a vendor website; 43% of respondents say it is a “must have,” according to What B2B Buyers Want From Vendor Websites. Going a bit deeper, 38% of B2B customers say technical support information is key, and the same proportion say case studies, whitepapers, articles, and blog posts are essential. Ignore these “must haves” and it won’t take long for your customers to find a more useful information source (and, product/service source) online.
- Get your product specs, technical details, and other content ducks in a row. It’s in your suppliers’ best interest to see your distributorship succeed in the e-commerce space, so don’t be afraid to ask them for help with some of the content outlined in #4 above. Product descriptions, technical specs, and photos are just a few of the things that they should be willing to provide. “Usually you can expect your manufacturer to give you everything you need,” says Howard Weiss, CEO of Call2Action Media in Miami. “This is a pretty important step because a lot of online searches are driven by those specs, photos, and videos. With so many customers using Google for product research, it’s key that you have those pieces in place.”
- Don’t trust your e-commerce strategy to just anyone. “The business mistake businesses make is grabbing just anyone to help them get set up to handle e-commerce,” says Dave Hermansen, an ecommerce expert and president of StoreCoach. A lot of people may say that they can build out that capability and the associated search engine optimization (SEO), for example, but few can actually fulfill on those promises in a professional and capable manner. “About 95% of individuals who claim to be SCO or web development experts really aren’t,” says Hermansen, who advises distributors to choose carefully when assigning this portion of their businesses to one or more individuals. “If you’re going to do it, do it the right way.”
McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at firstname.lastname@example.org or visit her website at www.expertghostwriter.net.
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