Manufacturers are actively inquiring about distributor investment in eCommerce. Some are being proactive and offering resources to their distributors.
Festo, a supplier of process control and factory automation solutions, who typically partners with automation distributors, recently developed a collaboration with Kyklo, a leading eCommerce provider that supports many automation distributors and is entering the broader electrical distribution market.
Essentially, the new relationship brings enhanced functionality to Festo distributors whose sites are powered by Kyklo.
According to the press release:
KYKLO and Festo, a global leader in the pneumatic and electrical automation industry, have jointly developed a plan to drive improved customer service through Festo’s North American distributor channel. The agreement calls for KYKLO to provide enhanced offerings to Festo’s extensive network of knowledge-based technical distributors. This effort will give customers served by these distributors access to tens of thousands of Festo products via KYKLO’s ecommerce platform.
KYKLO will optimize customer communications by enabling better data sharing between customers and their local distributor. New and featured Festo products will receive priority consideration on the distributor’s eCommerce system. Using this feature, a new product will automatically appear in the Festo section of the distributor’s website early in its introduction phase. Additionally, entrance to the online Festo product configurator will feature special messaging from the company.
Festo recognizes the growing importance of getting detailed product information into the hands of customers. According to Mark Snyder, Channel Director of Festo USA, “I have visited the webstores of our distributors who have employed the KYKLO system and I am amazed at the quality and depth of their product data.”
Customer behavior and the way potential buyers discover new products has made a dramatic shift over the past few years. Rather than rely on the salespeople to provide product data and technical details, buyers research via the internet. This means new potential customers are sometimes not clearly visible to the distributors. Again quoting Mr. Snyder, “We have seen a recent trend where Distributors with digital presence are growing faster than distributors without. I believe this is at least in part due to their ability to attract and sell to customers who would normally not be visible through traditional sales methods.”
Prior to KYKLO most technology focused, and application skilled distributors could not support an effective web-shop. While the costs associated with building a platform have decreased in price, the cost of creating product data, constantly updating new products, and maintaining high search engine optimization (SEO) were outside their reach. Further, buyers contrast the quality of their experience against mega sized companies rather than a competitor across town. KYKLO levels the playing field. In Snyder’s view, “… every distributor must be looking at ways to make themselves “Amazon Proof”. They need an easy to use webstore which is optimized for internet searches as well as their traditional technical support and customer backup.”
Manufacturers like Festo believe developing new applications and the resulting market creation are key to market share growth and long-term success. They also see customers taking an omni-channel approach to purchasing the products they need. Once more quoting Festo,“eCommerce is going to someday be a must have for every distributor. Someday, probably by 2025, customers and suppliers both will weigh this point heavily in their selection of distributors. We want our distributors to be there.” With this important thought in mind, the plan allows distributors to apply a portion of their 2021 co-op marketing dollars to the KYKLO investment.
When asked, why is digitalization part of the Festo channel program, Mr. Snyder stated the following: “It’s about customers. Every recession brings changes to their world and the way they do business. Customers have accelerated their switch to this method of buying and we need to encourage our distributors to be there. We are changing our ways too. Festo as a corporation is increasing the overall online experience for customers by putting all the engineering resources into one place. Customers want that.”
When distributors use KYKLO it enhances service to existing customers and provides an avenue to yet to be discovered and under-served markets. Existing customers are given another, and possibly more attractive, option for doing business with the distributor. New customers both find the products they need and become valuable leads for the distributor. When technology-focused distributors move front and center for customers looking for Festo products, the customer gets better application support, technical assistance, along with ease of doing business. Experience indicates this drives sales and market share growth for distributor and manufacturer alike; that is important
The trend of supplier collaboration to support distributor eCommerce initiatives and/or distributors seeking to feature selected suppliers can also be seen on Graybar’s site with their manufacturer specific stores.
Given that manufacturers are investing much in digital content and with some concerned that their primary path to market (electrical and automation distributors) may be, for the most part, lagging national chains and other channels, some are investing into resources and digital marketing tools that can proactively support like-minded distributors as they see digital becoming a “divide” within the channel. Expect to see resources diverted to support commerce-enabled / digitally savvy distributors.