If you were searching for a reason to enter the realm of e-commerce, look no further than trying to successfully operate a distribution business in the era of COVID-19.
The pandemic has accelerated the contactless purchase trend with more customers shopping online and relying on curbside pick-up and less customers wanting to conduct in-person sales transactions inside of brick-and-mortar stores. Small and medium-sized distributors who were skeptical about e-commerce now realize they have to adopt digital sales tools to adapt to the changing environment.
"I've seen steady growth of e-commerce over the past several years and certainly some surges of growth surrounding COVID," said Tyler Tworek, customer success manager for Second Phase, a BillTrust company. "People are actively seeking a touchless experience. They don't want to wear a mask and go inside to talk about what they need for a job. The will-call pick-up experience has become important during COVID, they want their items to be there and ready for them."
Second Phase picked up 30% more customers than it had in the last six months and doubled e-commerce growth month over month with some customers. Some distributors have grown their e-commerce business from 10% of their sales to 20%-30% of their sales and others now conduct 12% of their business online when they were only at 3% two years ago.
"Distributors who are not afraid to invest in building a great webstore experience are reaping the benefits," Tworek said.
Those who have the most e-commerce success are those who realize it's always a work in progress that needs constant attention. "It doesn't have to be a capital investment," Tworek said.
"Spending money isn't necessarily the answer but investing time and human resources are unavoidable for success in this space."
"At the end of the day, your customer will go to another distributor that has a digital sales process nailed down once they figure out you don't," Tworek said.
In his role at Second Phase, Tworek has worked closely with dozens of IMARK distributors in multiple industries. He offers the following strategies and tactics to help you reach your e-commerce objectives.
Compensate your sales reps equally or better on e-commerce sales. You don't want your sales team working actively against you. "What I've seen work really well is to not only have compensation be the same but add e-commerce performance targets for them to hit to engage a certain percentage of the customer base in using the webstore or to achieve a certain percentage of overall sales from the webstores," Tworek said. Offer bonuses or commission as accelerators to work webstore purchases into existing sales program. Sales teams have to be motivated to use the webstore as a key sale channel so they get on board and engaged with promoting web sales. It's the most effective way to operate a webstore.
Provide access to your entire product selection on your webstore. When customers go to buy something online and they can't find it, they lose confidence in a company's online business and it takes a significant effort to get them back to using the webstore. They have to know they will have the same experience across all of your selling platforms.
Have photos for every product in your webstore. Whether or not it is a photo of the exact product or a photo of a "generic copper elbow," give customers confidence in purchasing from your webstore with images for every product. Many customers need to see a product to confirm that it is the one they need.
Provide real-time pricing and availability for every product. Avoid the message of "call for pricing/availability" whenever possible. Do anything to avoid putting an obstacle in front of customer who wants to buy a product. Anytime a customer sees that they have to call for information is an opportunity for that customer to lose confidence and continue making phone calls instead of using your webstore.
There will be situations where you can't display a price due to product certification. Then, display that information instead of "call for pricing and availability." Only display those types of messages when it is absolutely necessary because, in most cases, they are fallbacks because the data isn't there and it turns customers away.
Handhold your customers. Many contractors won't take initiative without handholding. They need to be shown how to use a webstore and place orders. Helping customers place the first two webstore orders in-person or over the phone goes a really long way toward getting them to repeatedly use a webstore.
Market to your existing customers. Your customers need consistent reminders that your webstore exists and why it will make their jobs easier. Reminding them should be an extension of any marketing strategy. If you are not targeting people who haven't placed a webstore order, they are not all of sudden going to request a login. Fresh messages are critical to grow the adoption rate among your customer base. Ask them to reply to the email to set up an account and email customers who haven't placed a webstore order every single month or more. If they only see a reminder every six months, it's not going to sink in.
Track the percentage of e-commerce sales by branch, sales rep, division and hold your respective teams and individuals accountable for their results. In any sales meeting-type context, look at the numbers broken out by e-commerce sales and set up incentives to make sure your employees are hitting their targets. Hold them accountable and make sure that e-commerce is a topic of discussion in every sales meeting. If you are investing in e-commerce, it's a priority for the future of your business and that needs to be translated into all normal business activities and assessed on a regular basis.
Make your e-commerce initiative an extension of your value proposition and business goals. You have to integrate what you are doing with e-commerce into the other initiatives you have and extend your value proposition into your webstore. Too often, e-commerce is viewed as a separate business unit or strategy when it should be looked at as an extension of everything you are already doing. Ensure customers have a consistent experience across all of your selling platforms and think about e-commerce the same way you think about every brick-and-mortar store experience.
Mobilize your entire team around your e-commerce initiatives and how they promote the overall health of your relationship with your customers. Too often in distribution, one person is put in charge of e-commerce. Think how much more you can get out of it when it's managed and used across all departments. The more you distribute the ownership of your e-commerce effort, the more success you will have with it. Your counter sales folks can use your website to place orders at the counter and show customers the advantages of using it. The more you have that message everywhere, the more success you will have with your e-commerce initiative.
E-commerce management shouldn't fall on one person. Your inside sales and customer service representatives should be able to answer questions about your webstore and remind customers it exists. Your outside sales folks, due to their close relationships with customers, should be the No. 1 advocates of your webstore. To optimize your e-commerce initiative, ask yourself:
- What can each team in my organization do to contribute to this effort?
- How can my marketing strategies translate into the e-commerce environment?
- How can my counter sales team help educate customers and promote my webstore?
- How can my inside sales or customer service team support customers using the webstore and how might they leverage the webstore to make their jobs easier?
Internal support for your e-commerce initiatives is no longer optional. Many of your customers are now working remotely and expect a consumer-grade online experience to find products, create orders and have visibility to customer pricing, stock accuracy and pick-up/delivery options, the same way they would if they were in your store or calling with an order.
Successful distributors that will continue to thrive in the future will be those providing a content-rich webstore that unifies both online and on-premise selling channels that connect directly to their ERP system for real-time stock levels, pricing and shipment options.