By Bridget McCrea
With all of the buzz surrounding online retailers like AmazonSupply and Amazon Business, the typical electrical contractor still relies heavily on the independent electrical contractor to fulfill its needs – both online and offline.
Retail websites from companies like Walmart, eBay, and Target may be leading the charge on the business-to-consumer (B2C) front, but the business-to-business (B2B) online market is also growing by leaps and bounds. According to Forrester’s US B2B eCommerce Forecast: 2015 to 2020, B2B eCommerce is on track to grow from a current $780 billion to $1.13 trillion in 2020. Within five years, Forrester predicts that B2B e-commerce will comprise 12.1 percent of the total $9.39 trillion US B2B commerce market.
According to Forrester, changes to buyer preferences will be a major growth driver for B2B ecommerce. The research firm says that today, 74 percent of B2B buyers research at least 50 percent of their work purchases online. In addition, 30 percent of those buyers complete at least half of their work purchases online. With that percentage nearly doubling to 56 percent by 2017, “B2B sellers will see a significant volume of offline business move online in the next few years,” Forrester asserts.
Where are Contractors Shopping?
The question that many electrical distributors are asking themselves right now is, are my electrical contractor customers a part of this movement yet and, if not, when will they be? Where the urge to use the Internet to research products, check stock on certain items, and communicate with distributors is clearly there, the actual ordering sales process continues to take place offline in the typical distributor-contractor relationship. And while huge, national suppliers obviously rely heavily on their online storefronts for sales, the average independent distributor still manages its business in a more traditional fashion.
“We’re still pretty old fashioned around here,” admits Dave Gilson, owner of Terabyte Technologies, Inc., in Aloha, Ore. “I’m starting to get a lot more email from distributors, but I really still like to thumb through the flyers that come in the mail in my spare time. In many cases, that’s the information I use to make purchase decisions and/or set up meetings with my suppliers.” Gilson says those purchase decisions usually boil down to two things: product availability and pricing (in that order).
Gilson, who doesn’t do any B2B shopping on sites like AmazonSupply, says he does use distributor websites to do research and check stock – knowing that this is convenient both for his company and for the suppliers that it works with. “They’re just as busy as we are, so the web serves as a good go-between for us,” says Gilson. “I’ve been in the industry long enough that I can get on a website and find what I’m looking for.”
Where distributors could step up their online game, according to Gilson, is by keeping their websites updated in terms of “local stock” versus national inventory availability. “The information itself is usually accurate, but it doesn’t necessarily reflect local stock,” says Gilson. “So where the supplier may have the items we need somewhere in the country, it’s not always something I can just go pick up quickly at the store. That’s definitely a frustration point that distributors can be thinking about as they update and improve their web presences.”
There When We Need It
Bruce Seilhammer, electrical construction group manager at Camp Hill, Pa.-based SECCO, Inc., says he also relies on distributor websites to check stock on critical items that his firm may need in a pinch. And while he acknowledges the fact that stock levels can literally “change from minute to minute,” Seilhammer says suppliers that can keep those online numbers accurate and reliable definitely stand out in his mind.
“Knowing what’s in stock and how quickly we can get it is a pretty critical piece, particularly when your contractors are doing service work,” Seilhammer points out. “In certain cases, we’d also like to be able to ‘reserve’ the parts or items online and lock in our orders that way. That gives us even greater peace of mind, knowing that everything will be there when we need it.”
And speaking of having something “there when we need it,” the father-daughter team at Maglio Electric, LLC, in Hampton, N.J., say their biggest concern about using online retailers like AmazonSupply is the fact that there won’t be anyone there to support their order and/or the products if a problem arises. “We just talked about buying from supply houses versus online outlets, the latter of which may not be there if we have a problem and have to pick up the phone,” says Justine Maglio-Wardell, office manager.
Anthony Maglio, company owner and founder, is also concerned about the potential for counterfeit products. “We’re hearing so much about counterfeiting these days, and when you buy from a large online retailer that you don’t know, you really don’t know what you’re going to get,” says Maglio. “Is the product UL approved? Is it really what the seller says it is? There are definitely some concerns in the back of my mind that make us hesitate when it comes to options like AmazonSupply.”
Distributors Rule
At least for now, even Forrester’s trillion-dollar B2B commerce forecasts don’t seem to be pushing electrical contractors out of their buying comfort zones and onto the web to buy their critical goods. With firms like Tera-Byte highly reliant on fast delivery times and companies like Maglio Electric apprehensive over possible counterfeiting and a lack of after-sale support, it looks like the independent electrical distributor retains its position as the supplier of choice (particularly when its own online strategy is on target).
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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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