Given the fact that there are more than 1.7 billion global digital buyers today, a number that will grow to an estimated 2.2 billion by 2021—some 25% of the world’s population—businesses of all kinds are getting onto the e-commerce train to tap into their share of the immense buying power represented by this online market. Among those businesses are electrical distributors, who are increasingly launching webstores and e-commerce support tools in an attempt to support customers seeking to gain operational efficiencies.
In the following round-up, five IMARK members who have built and introduced successful e-commerce capabilities to the market in the last several years share their insights on the challenges and opportunities associated with webstores, how they launched them and why distributors who don’t offer this capability may end up driving customers to competitors who do.
IMARK Now Electrical: What are some of your key responsibilities as they relate to your company’s ‘digital assets’ and when did your firm’s webstore ‘go live?’
John Russ, Edges Electrical Group, San Jose, California: I manage a team that creates internal/external promos, banners, flyers and counter monitor displays for the company and have responsibility for the Edges e-commerce store and our new Edges App. I work closely with our webmaster on updating and creating awareness of the product and also drive marketing for new business development and supplier relationships. Our webstore went live on Jan. 1, 2017.
Andrew Montgomery, United Electric, New Castle, Delaware: As our e-commerce manager, I deal with everything from product data and customer setups to troubleshooting software and strategic planning. I became involved in early 2014 and our current website went live in January 2015. Before that we had the Eclipse “store in a box,” which was private and limited in scope.
Kevin Kalish, Sunrise Electric, Addison, Illinois: I work with our customers’ business processes to increase their efficiencies while embedding our digital assets and technology solutions within their existing business processes. These solutions can involve everything from their quotations/estimating process to their procurement and accounting processes. Our goal is to demonstrate a return on investment within our clients’ businesses using our technology solutions, which further secures our relationships and provides a competitivebarrier. I also work with our internal operations team to explore ways to leverage our ERP data. Our customer-facing technology solutions launched in 2016.
Lalena Kotasek, Blazer Electric, Colorado Springs, Colorado: I joined the Blazer team in April 2018 and handle the direction of the e-commerce website, the quality of product and data content on the site, graphic design, photography and marketing and promotions. This includes traditional, social and digital marketing efforts, new product release awareness and marketing and customer training relative to ordering our products on our e-commerce website; I also handle IT management, servers, hosting and security. Our webstore went live in October 2015.
Paul Switzer, Shepherd Electric, Baltimore, Maryland: I oversee digital marketing/social media and e-commerce sales solutions and serve as a business liaison to IT. Our firm’s webstore went live in May 2018.
IMARK Now Electrical: What are some of the major challenges IMARK members can expect to face (internally and externally) as they introduce e-commerce tools and resources?
Montgomery: As people are inherently resistant to change, the “human” element—e.g., communication and adoption—can be more difficult than the technical aspect and altering behavior can be a struggle. Communication through a website is tricky—it’s like having a conversation in which you can’t see or hear the other person; we’re putting tons of information out there, but we don’t know if our delivery is effective. For example, though we show our inventory online, we kept getting calls from customers looking at our website and calling to see if we had an item. Since then, we’ve gone through multiple iterations of our inventory display, making it more obvious each time. Customer adoption is difficult partly because we already do a great job of serving them through traditional channels. Most of our customers have great relationships with our salespeople, so why would they do anything different? With customers like that, order entry may not be the place to start. But that same customer could be looking for an invoice or availability off-hours, when they can’t access their salesperson, so there’s still an opportunity to make their lives easier and their business more profitable. Finally, internal adoption is an undertaking as well. The more comfortable our customer-facing folks are with our digital offerings, the more likely they are to utilize them with a customer to solve a problem. What we’ve found that works best is to start with the basics—if our employees are comfortable with the basics and have an idea of what’s possible, they’ll be our greatest champions.
Kalish: Internally, we still believe that the most important aspect of our business is relationships; with technology, these relationships are simply occurring on a different platform. Seasoned employees have a fear of being replaced by technology, but we’re really just trying to use automation to remove “busy work” from our talented inside professionals and enable them to focus on higher-margin, solution-based selling. Externally, one of the challenges we’ve faced is when customers have used our competitors’ e-commerce offerings and conclude that e-commerce isn’t for them or their electricians. We see the greatest success and customer engagement when we explore the unique challenges of our customers’ existing procurement process, as each customer places emphasis on different aspects of their buying process.
Kotasek: Our e-commerce site wasn’t brand new when I arrived, but the sales were still very minimal and there was a lot of room for growth. Many of our customers rely on the expertise of our inside and outside salespeople to help them locate products, so navigating around an e-commerce website was frustrating and time-consuming for many customers who were unfamiliar with online shopping and ultimately led to a lack of use of our site and low online revenue. My goal was to speed up the site, clean the data and make searching easier and then offer customers training, support and shortcuts so that they felt comfortable going on our site to find the products they needed; this was challenging given that Blazer covers all of southern Colorado and there’s only one of me. The message here is that having outside salespeople who are strong advocates of the webstore and can support the effort is a must for any distributor.
Switzer: In addition to picking a good webstore platform and partner, other challenges include transparency—customers expect your website to have their pricing and real-time inventory availability. As you put your customers on your webstore, you open up your internal ERP systems and give your customers transparency to your data and processes. Clean data is king in the internet world, so it’s critical that your data be clean and organized into helpful categories. Finally, if you’re rolling out an integrated webstore that talks to your ERP, you need to plan your internal IT team’s time realistically because they’ll have to spend significant time behind the scenes implementing your solution.
Russ: Upon entering the e-commerce world, it’s imperative to have a strong team that understands the company’s vision; I’m very fortunate to have such a team (Jason Gist, Tania Rivera and Darlene McEvoy). There’s a great deal of front-end time involved in getting things off the ground and then it will take even more time to roll out the finished product to the team and your customers. A strong IT/webmaster is critical because as a distributor, employees have to learn how to navigate through their ERP. With the website, data isn’t clear and concise to customers, which can initially make it very difficult to locate products.
IMARK Now Electrical: What percentage of your sales are currently flowing through your webstore and where do you feel (or hope) this level will be in the next 3-5 years? Which of your digital assets are seeing the greatest levels of customer engagement?
Kalish: In terms of where we want it to be, the percentage of revenue flowing through our digital assets is still relatively low, but we’re currently launching new applications designed to make the daily material ordering process much easier for our customers. Our customers’ interest in our new applications gives us confidence that our digital sales will significantly increase over the next 3-5 years. Additionally, we currently reduce our operational costs and provide a high level of customer service by enabling quotes, stock checks, etc. through our digital offerings.
Kotasek: Relative to the prior 12 months, we’re experiencing progressive growth through our webstore. We currently offer 9,000 stock SKUs on our webstore and have seen a 175% increase in online revenue between 2018 to 2019 and a nearly 10-fold increase in average monthly online sales between 2015 and 2019. Current sales flowing through our webstore are at roughly 3.5% of stock and 2% of overall sales and my goal is to drive online sales to 10% of stock sales within the next 3-5 years. In terms of engagement, many of our customers want to refer to their previous order history in order to reorder without having to sort through a paper trail. We’re also finding that they’re specifically using our site to organize lists for van stock replenishment, to pull spec sheets and to look at product availability.
Switzer: We opened our webstore with limited release less than one year ago. While web sales are relatively low, they continue to grow and more customers are using it every month. We see web sales growing significantly in the next 3-5 years. Amazon changed consumers’ expectations and what our customers respond to most is the ability to access information on a self-service, on-demand, 24/7 basis.
Russ: We have close to 1% of sales coming in through our webstore now, with the goal to grow to 20% within the next five years. There’s a steady growth of customers who are interested in our solutions to make their daily workflow a little easier. In particular, customers are extremely interested in seeing their pricing, the availability of products and spec sheets and their invoices.
Montgomery:We look at it in terms of the value and utility that we provide to the customer. We have customers who have been regular website users for years but have never placed an order online. They’ll check pricing and availability before we’re open in the morning, pick up what they need at our counter during the day and do their paperwork in the evening after we’re closed. Even though they didn’t place their order online, we still got the sale and helped them run a profitable business through effective use of our website.
IMARK Now Electrical: What are some of the best ways to introduce e-capabilities to customers and prospects?
Kotasek: Webstores can be very useful tools that support customers’ varied schedules and locations; we have many customers who don’t have time to get on our webstore during the day but are very pleased to be able to get online in the middle of the night. Out-of-area customers also love our site. In addition to offering personal training as a way to help introduce e-capabilities to customers, I recorded very short and easy-to-follow YouTube video tutorials covering “How to Order on BuyBlazer.com.” I can easily share these with a team of purchasing agents when they don’t have time to meet in person.
Switzer: I think that a great way to familiarize customers with e-services is to use salespeople to introduce capabilities and to focus on functionalities that improve customer experience.
Russ: Train the employees who are in contact with the customers the most (e.g., counter, inside sales, drivers and outside sales). If they can show off some of the tools the company has available to the customers with a sense of ownership, it’s easier for customers to buy in to the solutions provided.
Montgomery: Start with the basics and solve a problem for the customer. For instance, if a customer needs a copy of an invoice, tell them, “I can get you that, but did you know that it’s available on our website 24/7?” A lot of our customers are doing paperwork during nights and weekends, when their only access to us is through our website. Digital adoption isn’t an all-or-nothing proposition. Whether they call on the phone, come to the counter or go online, it’s all the same—“Products, Pricing and People”—but our website can certainly be one of the great windows into our system for customers.
Kalish: Some of the best ways to introduce e-capabilities to customers or prospects is by asking them the right questions and finding out their pain points. We then explore the digital assets in our technology portfolio that can solve their problems. Some digital assets may not be a fit for certain customers, but can solve a significant business problem for others.
IMARK Now Electrical: Did you solicit customer input when you were first developing your e-tools and/or do you solicit customer feedback on them now that they’re up and running?
Kotasek: I spent my first 12 months here personally visiting with key accounts, both large and small, to learn what they wanted from our site. We also released a customer satisfaction survey right away which included e-commerce questions. My visits included training, guidance, and in-person introductions in hopes of helping them gain familiarity with our site.
Switzer: We conducted a focus group with some of our best customers in our conference room and had them explain to us what features were most important to them; we then made sure to incorporate their input into our rollout. We also went through a formal beta test period where customers agreed to test our site and give us feedback on their experience and specific ideas for improvements. Our customers continue to give us feedback and we continue to make enhancements.
Russ: Constant feedback and input from your customer base is important to develop the tools for your website. We talk to our customers to see what their pain points are throughout the day, offer current solutions and brainstorm new solutions with them.
Montgomery: We talked to many customers when we first put the website together and we continue to stay in touch with them. They’ve given us invaluable input relative to their preferences and they’ve had some great ideas; in fact, some of our customers’ ideas became website functions that are now nearly universal. We also like to hear from our salespeople about issues their customers are seeing. We make sure that our customers’ needs and preferences play a role in what we do and what our priorities are.
Kalish: We have a group of customers focused on increasing their business efficiencies through technology and we always involve them when we demo any beta applications and request user feedback throughout the process. Listening to our customers’ needs is critical, as they’ll be the users and lifeline of our digital assets.
IMARK Now Electrical: Have younger customers been among the first to embrace your webstore or other digital assets? What’s the profile of customers who have embraced your e-customer service tools?
Switzer: While millennials may be early adopters, we’ve seen that anyone interested in saving time and gaining efficiency is embracing e-commerce. E-commerce is more than a webstore and customers looking for strategic ways to improve efficiency in the supply chain are hungry for these solutions.
Russ: Customers of all ages have embraced our solutions equally and it really depends on the customer’s mentality. There can be a younger purchasing agent who would rather talk to their salesperson over the phone or via email, but there are also older agents and field workers who want to be able to place orders digitally and move on with their day.
Montgomery: Current and future generations expect, and prefer, to do business online—it’s a built-in assumption, not a replacement for paper and pen. Younger people grew up in an online world, so why would their chosen profession be different? Use of our webstore isn’t confined to only young people, however. We have a lot of seasoned industry veterans who prefer to do business online and there’s a growing number of customers who, regardless of age or job title, simply prefer to do business online. These customers are going to purchase online, whether it’s from us or not.
Kalish: From our smallest contractor to our largest, digital assets can appeal to any audience when they have a need for the solution. Some are interested in streamlining their ordering process while others need help quoting general material items for time-and-material tickets. While it may seem obvious that the younger generation is more “technology-enabled,” we’ve seen customers near retirement age engage in our technology offerings.
Kotasek: When I first began researching who was ordering online from us regularly and why, those typical thoughts of “it must be a younger person sitting in their office doing the ordering” crossed my mind. Surprisingly, we have a wide range of users, from younger customers who would appear to be more comfortable with online ordering to highly-organized older customers who weren’t necessarily comfortable at first, but who, with some support, have become very consistent online order placers.
IMARK Now Electrical: Finally, many electrical distributors know they need to move forward in the area of e-commerce, but have remained uncommitted because they don’t feel a strong demand/interest from their customers. What would you say to distributors who still need convincing?
Russ: I would strongly recommend pursuing an e-commerce solution to ensure that your customers are looking to your company for solutions and innovative ways of doing business. If your customers aren’t looking to you for solutions, they’ll find them with your competition.
Montgomery: Think about the impression that leaves with prospective employees and clients. Many of our new employees say that the first thing they did was check us out online. If you have no digital presence, do you even exist? Building a strong website and digital presence takes time; the internet took decades to get to where it is now. Since going live in 2015, for example, we completed one major redesign and have performed countless usability improvements. A website isn’t a “set it and forget it” endeavor; where we are today is the result of continuous improvement. It’s a process, and you’re not going to do everything overnight, but we’ve learned a tremendous amount over the last few years and made great strides in what we offer to our customers.
Kalish: I’d tell other distributors to identify a top customer’s business problem and solve it with your technology offering. Then repeat.
Kotasek: I would tell a distributor who’s uncommitted or hesitant to launch a webstore to embrace the concept, and fast. They should talk to their customers and find out what customers want most from them. “If you build it, they will come” are words to live by in our fast-paced and ever-changing online environment. Give your customer the option to shop with you 24/7 and from any device.
Switzer: E-commerce isn’t going away and demand will only increase. Customers are looking for ways to improve efficiency and effectiveness and expect on-demand, self-service at all hours of the day. As a distributor, you know the value of being a resource to your customers and e-commerce is a unique way you can serve them. The road to ready your systems is longer than you think and the longer you delay starting this journey, the farther you’ll fall behind in being ready for that inevitable day when your customer demands digital solutions and finds them from someone else. The best thing is to be ready and avoid getting stuck between a rock and a fax machine.