Building Your Digital Branch, One Block at a Time, Part II

By Bridget McCrea

Online B2B e-tailers like Amazon Business are putting their best foot forward online… is your distributorship doing the same?

Imagine the electrical contractor who calls up his local electrical distributor to have an order of parts and supplies delivered to the jobsite the following day. He picks up the phone, dials the distributor’s number, greets the person on the other end, and is then asked to input a 7-digit passcode before the call can continue.

But he doesn’t know the passcode, and requests an email password reminder. He waits a few seconds, retrieves the email, and then attempts to key the password into his phone. He “fat fingers” the process and winds up getting it wrong a few times. Now, 30 minutes after his first attempt to get through and place an order, he’s got someone on the phone who can help him—but not before he’s asked to listen to a 5-minute audio clip about the distributor and its new products.

Now it’s 35 minutes after that first phone dial, and the ordering process hasn’t even started yet. “This would never happen, yet the ‘digital’ version of this scenario happens online all the time,” says Justin King, a senior partner with B2X Partners in Ashburn, Va., and founder of ecommerceandB2B.com. “Customers are forced to enter passwords, watch videos, view ads, and jump through myriad other hoops just to view inventory and place orders.”

And that’s why 72 percent of U.S.-based B2B customers (in Asia it’s 86 percent and in it’s Europe 75 percent) are jumping ship and looking for other, user-friendly options online. This reality presents both challenges and opportunities for electrical distributors that put their best feet forward online instead of sitting back and hoping that their e-commerce efforts pay off.

Creating the Perfect Online Experience
According to King, distributors that want to do a better job in this area should start by planning out their digital branches just like they would if they were opening a new, physical location. And while the technology (e.g., the web storefront software) will serve as the foundation—much like a building would be the cornerstone for a new branch—the buck doesn’t stop there. You’ll also need someone to oversee and pioneer the effort, a staff to support it, and the all-important product data to populate the site.

And much like you would hire an architect and/or interior designer to build out a new physical branch, you’ll need a well-designed, user-friendly website that provides the best possible experience for your customers. King says these elements become particularly important when distributors find themselves up against the likes of Amazon Business, which views e-commerce as its core sales channel.

“Your goal should be to create the ‘perfect order experience’ online and help customers do their jobs easier,” says King, who admits that, for most distributorships right now, the revenue leak associated with the online channel is probably relatively small. “It may not be a huge, gaping hole yet, but even a small revenue leak can get bigger and bigger until it’s actually stopped. You don’t want to be the distributor that looks back in a few years and realizes that it should have been paying more attention today.”

4 E-Commerce Realities Not to Overlook
To distributors that want to improve their e-commerce approaches and compete more effectively in the online space, King offers these hard realities and some tips on how to navigate them:  

• It’s not about the technology. It’s also not about social media or web design; it’s about your customer’s job and how you can make it more seamless for him or her. “Here’s where Amazon is going full bore,” says King. “It realizes that it can help their customers do their jobs. And it knows that if it can help customers do that, those customers are going to come back for more and spend more. Plain and simple.”

• It truly is survival of the fittest out there. Using Blockbuster and Circuit City as examples, King cautions distributors not to get too comfortable with their current e-commerce strategies…even those approaches that seem to be working well right now. “The year before Circuit City imploded, its head of store operations announced that it was opening about 250 stores in the coming year,” says King. “Boy was he ever wrong.”

• To win, you’re going to need a plan of action. Trying out different e-commerce tricks and tools and hoping that they work isn’t going to cut it in today’s online environment. A better strategy, according to King, is to start by determining how much revenue your distributorship wants to be able to generate online. Working backward from that number, come up with a plan of action by asking yourself questions like:  What level of customer adoption do we want to get from this effort? What are we willing to spend to achieve that goal? And, what are we willing to spend to get that revenue stream to where we want it to be?

• Your customers are your best e-commerce focus groups. Talk to your existing customers. Ask them if they’re buying online. Find out if they’re buying online from your competitors, and why that’s happening (i.e., what are they offering online that you aren’t?). “A lot of distributors are telling us that they don’t really know if their customers are buying online, and there’s no excuse for this knowledge gap,” says King. “By simply asking, you’ll probably find out that only a very small percentage isn’t already buying B2B online.”

Digging a Little Deeper
Once you get your customers to open up about their online buying habits, you’ll want to dig a little deeper, says King, and find out exactly how they are searching, selecting, and buying products via the web. With those insights in hand, you’ll be able to develop a digital branch that factors in those habits and surpasses what your competitors are already doing online.

“Find out how customers locate the products they are looking for, where they start their searches (i.e., is it on Google or through another platform?), and what they’re looking at during this stage of the game (e.g., product photos, attributes, specs?),” King advises.

Other key questions include:  Are they comparing products to one another? Are they buying one product at a time or placing orders for 1,000 units? Do they buy samples first and then place larger orders later? And, when the larger orders are placed, are the customers using e-commerce or are they relying on electronic data interchange (EDI)?

“Every distributor in the world can dissect these problems; it’s not rocket science,” King says. “Once you get to the bottom of some of these questions, you’ll have the foundational elements on which to build your digital branch.”

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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 bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.