According to a recent study conducted by Channel Marketing Group titled \”State of eCommerce, Electrical Contractor & End-User Insights\”, electrical buyers are accelerating their usage of online tools for product research, downloading of spec sheets, seeking pricing and checking inventory. While online ordering ranks typically 5th out of six usages, based upon segment, overall, respondents shared that 4.3% of their purchases are online. And it changes by customer segment with industrial and institutional accounts reporting 2-3x this rate.
And all audiences expect eCommerce (sales transactions) and online interactions in general to increase … and they do value the role of outside / inside salespeople!
The report complements the earlier State of eCommerce, Distributor Perspective study conducted last year which highlighted many of the same areas in a multi-industry report.
The Path to eCommerce
Over the past few years, business prognosticators and software providers have been telling electrical distributors that their businesses will radically change, and perhaps decline or no longer exist, unless they quickly adopt eCommerce. The inference is that electrical buyers only want to place orders online. And for years the only revenue projections were Forrester Research suggesting that X B2B dollars are being spent / will be spent online.
And distributors have responded by investing into eCommerce solutions and as evidenced by the number of distributors who attended the recent AD eCommerce Summit where they reinforced the AD eCommerce solution. While many may not have commerce-enabled sites today, they have made the investment and are awaiting their sites to be deployed.
Channel Advantage and Conflict
Online represents a conundrum for manufacturers and distributors. Is it an extension of a distributor\’s business? How to handle \”new\” competitors such as Amazon Business and niche sites? What about channel conflict? How is the web changing where customers get their information? How will this impact manufacturer reps who frequently are product resources for customers and distributors? And who is buying from these sites?
The answers, or best guesses, are important to manufacturers as it determines where they need to place their bets on new relationships, their investments into product content, how to more effectively market their products to end-users and through sites (if a site has marketing tools available to manufacturers) and a guesstimate of what type of customer is visiting what site (and there are some indications in the report.)
From a distributor perspective, questions become is this an offensive or defensive tool? Is it focused on account penetration or are you seeking account acquisition? Want to focus on selling within your footprint / delivery area or open to selling \”anywhere\”? Why should someone come to your site? Are salespeople proponents or inhibitors? Do you have product content that differentiates you or are you using the same content as your competitor? Are you willing to invest regularly or will the site become static? And if you are not competent in marketing, will the site meet your expectations.
And while eCommerce is perceived as only affordable to medium / large distributors, there are platforms and data services that are affordable for smaller distributors.
Lots of things to consider. The good is that eCommerce, from a customer utilization viewpoint, is still in its early innings, however, adoption is growing, customers are expecting it and using it to make work easier for them. The report highlights where today\’s state of eCommerce for the electrical channel is and what customer expectations are.
The question becomes, where are you on this continuum? The State of eCommerce, Electrical Contractor & End-user Insights report can help you gauge where the market is (and we can conduct exclusively for you to help you better understand your customers\’ needs.)