Last summer, Industrial Distribution released its 70th survey of distributor operations to some surprising results. Of the respondents, 26 listed e-commerce as a primary concern in their business, ranking behind price competition and distributor competition. Sixty-three percent of the respondents consider e-commerce a priority but only 33 percent said their business currently offers a mobile app for their website.
Best of class distributors realize that e-commerce solutions are a “must-have” for their customers. A new generation of customer is used to ordering online and is rarely without a mobile device. They anticipate a seamless purchasing experience, similar to that of a consumer buying experience where supply chain issues are immediately identified and remedied. But integrating the complexity of business-to-business distribution with the ease of consumer online ordering is not a simple task.
Wholesale distributors have been reluctant to disturb a historically relationship-driven business. Customers and contractors use will-call operations to discuss project requirements and learn about new products. In turn, well-trained counter reps are adept at order fulfillment and product education. This dynamic has led to a B2B distributor/customer relationship that goes well beyond order taking. However, in a recent survey, 93 percent of B2B buyers prefer to purchase online once they’ve decided what to purchase. In addition, 62 percent of B2B consumers agree that e-commerce maintains or increases customer stickiness.
At Rotunda, we are helping our portfolio companies scope, create, and implement B2B e-commerce offerings. These small and mid-sized distributors have found the e-commerce platform enhances their customers and allows them to differentiate in the marketplace. It also frees up the outside sales force by automating parts of the pricing and quoting process and eliminating manual tracking of delivery slips and invoices. In implementing these solutions, we have found some common themes:
- Do not underestimate the time it takes to digitize the SKU catalog and implement a Product Information Management (PIM) system. Most small to mid-sized wholesale distributors have scattered data and inconsistent product information and formats. Starting with consistent product information simplifies the rest of the process and enables companies to nimbly sell across multiple channels and quickly introduce new or upgraded digital apps.
- It is not necessary to build a custom e-commerce platform from the ground up. The cost of custom platforms can ring up quickly and most small and mid-sized distributors cannot afford it. Nowadays there are many off-shelf platforms that can be “skinned” for customers that are up to the task. The key is to make sure the e-commerce offering is relevant to customers, easy for them to navigate, and has a seamless, simple order flow process directly integrated with the ERP system. E-commerce/ERP systems that are not linked can lead to multiple databases and create significant maintenance costs.
- Do not be limited to simply an online ordering system. Utilize the online platform to engage customers, providing relevant information, including cross-sells and upsells. Include videos with product demonstrations or detailed information on product specs and, if relevant to the market, customer reviews. Also, consider adding live chat.
- Provide a mobile offering that is consistent with the website. Build websites with image resizing and flexible grids.
- Sales order automation tools allow inside sales reps to focus on the customer. Sales order automation leads to faster order processing and can speed up the delivery process.
E-commerce can simplify the ordering process for customers and engage them daily in ways not previously possible. Now use the time previously spent taking orders to take customer relationships to a new level.