In April, Amazon announced that it was moving one step closer to providing everything for business owners via Amazon Business, a new website for business owners that will expand the AmazonSupply brand and provide business owners with a place to shop for all of their business needs. From office supplies to wholesale products, Amazon Business is expected to be even bigger than AmazonSupply. As part of an ongoing series of stories looking into the future of electrical distribution, tED Magazine explores some of the key points that NAED members and suppliers should be thinking about as this online retail behemoth continues to make its way into the B2B marketplace.
By Bridget McCrea
Price may be a governing factor when customers make buying decisions, but when it comes to Amazon Business it looks like electrical distributors will have to get a bit more crafty in the way they position themselves. After all, the online retailer is already known for its razor-thin margins and extreme cost-cutting tactics, both of which could lure away price-conscious customers that don’t necessarily need the level of technical support and assistance that independent distributors specialize in.
But all is not lost, according to Philippa Gamse, author of 42 Rules for a Web Presence That Wins and a Capitola, Calif.-based digital marketing consultant. In fact, Gamse sees viable opportunities ahead for the distributor that combines a solid e-commerce site with years of technical expertise and value-added offerings. “Given that it’s very hard for NAED members to compete with Amazon on price, they need to consider what added value they can offer that Amazon can’t,” Gamse says.
“This is really all about knowing your customers very well,” says Gamse, who advises distributors to ask themselves these questions as a starting point: Why do our repeat customers stick with us (if you don’t know, ask them!)? Do we provide additional support, warranties, quality assurances, consulting, etc.? Are we being clear about all of our strengths and USPs (unique selling positions)? And, are we emphasizing these important competitive advantages?
Also, if your firm sells products that need to be replaced and/or serviced at regular intervals, do you have an email list for reminders (fast purchase discounts, etc)? And does your customer database allow you to identify customers who might be interested in new products/industry applications that you can keep them informed about? “The key here is to seek out any opportunities to provide a level of in-depth service that Amazon can’t provide,” says Gamse.
Leveraging Analytics to Your Advantage
One free tool that can help independent distributors position themselves for success online – even in a world where Amazon reigns – is Google Analytics.
Using this tool (or another analytics program), distributors can look carefully at the following important metrics:
- Which of your marketing channels bring the best traffic in terms of conversions. “Note that you can also look for micro-conversions such as inquiries, newsletter sign-ups, or time on site in addition to actual sales,” says Gamse. “The basic question here is: Are you making the most of all marketing dollars and opportunities?”
- What is your online conversion rate and how can it be improved? For example, where do visitors abandon the shopping cart (note that if you have an ecommerce site that you need to have full ecommerce implementation of analytics to track in detail which products are in play, again beyond actual sales). “If many visitors are bailing as soon as they see the shipping charges, that says something,” says Gamse, “but it may be more an issue of usability (i.e., is the ordering process too difficult?).”
- Enable the internal search tracking in analytics. This allows you to see what searches visitors perform on your site. It also reveals what products they may be looking for that they can’t find. “Perhaps they use different words or terms to describe what they want,” says Gamse, “and wind up mistakenly thinking that the site doesn’t sell what they’re looking for.”
- Finally, use your analytics tool to look for other red flags, such as pages with unexpectedly high bounce rates, or products that should sell well but are getting little or no traffic. Also, consider whether your site does a good job of recommending related products (a straightforward way to upsell customers online and increase order sizes).
“This isn’t always easy to get a handle on,” says Gamse, “but it’s really worth doing because the customer insights that you can derive are so valuable.”
Site Search is Serious Business
One of the best ways to keep customers engaged on your e-commerce site and ensure that they come back for more is by integrating a robust internal site search engine into your online strategy. This is particularly important for electrical distributors that deal with an average of 40,000 SKUS (give or take). “If a search engine is available on your site,” says Gamse, “visitors will use it immediately without any reference to the navigation template or other links. So it’s vital to provide what they’re looking for quickly and easily.”
The site search engine can also be an extremely valuable tool for distributors. “Tracking the keywords and phrases that visitors are looking for can tell you a lot about their expectations of you and the terminology that they use to describe their needs,” says Gamse. For example, you can evaluate which of your offerings are most sought after, and consider featuring them more prominently. “You can also see common misspellings of words, or if visitors use different search terms than you expected,” says Gamse, “which can provide suggestions for tweaking and enhancing your descriptions and copy to make your web presence even stronger and more effective.”
Do You Have a Web Ambassador on Board?
With competitors like Amazon not expected to go away anytime soon, Gamse says now is the time to appoint a “web ambassador” who will be responsible for shaping and honing your distributorship’s online efforts. “This is the person who will be responsible for the high-level, 30,000-foot perspective, as well as overall supervision of those who drill down into all aspects of your web activities,” says Gamse.
Here are four tips for selecting a web ambassador and leveraging his or her capabilities and strengths:
- Select someone who has enough technical knowledge to stay abreast of developments in technology from a business perspective (it doesn’t have to be a computer programmer) and evaluate potential enhancements to your web presence as recommended by your designer or others.
- Put the person in charge of analyzing the traffic information for your web presence, or to appoint someone who can do this (whether internal or external). “It’s important that he or she can formulate critical questions about your online performance,” Gamse says, “based on in-depth knowledge of your strategies and desired outcomes, so that you can evaluate your return on investment at a sophisticated level, and make appropriate changes to your content, social media, and marketing tactics.”
- Make sure your web ambassador maintains regular contact with all of your various business areas, and that he or she is open and available to listen to colleagues and customer feedback, and takes into consideration their requests and suggestions for future enhancements.
- Finally, put your website and social media presence on your management meeting agenda at least every quarter. “At this time, the web ambassador can report on progress and suggested improvements,” says Gamse, “with possible costs, projected benefits, and appropriate priorities for each one.”
Two Retail Veterans Take Aim at Amazon’s E-Commerce Reign
Over the last few months, two retail veterans (from Apple and Quidsi) have been building companies that explore different avenues of breaking into online commerce and going head-to-head with Amazon. Read how they’re doing it in this New York Times article and pick up a few tips to integrate into your distributorship’s e-commerce approach.
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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.
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