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I can admit it, I like to shop.  I don’t shop for myself; I like to shop for my family.  Christmas around the corner? I am geared up and will have my shopping done by Thanksgiving.  Birthday soon?  I am all over it.  Anniversary, awesome, I look forward to it, bring it on.  I look at gift buying as a challenge to pick something that is not only useful and thoughtful, but something the recipient didn’t realize they wanted or needed.  Having said that, you may think I’m like a teenager, spending my free time at the mall, not true, I have not been to a mall in ages.  I do all of my shopping in my sweats from my basement office.  As I browse web sites and comparison shop and look for that inspired gift, I have come to realize that a good web site can be a differentor for distributors today.

Distributors are dealing with a new kind of customer who is socially networked, well informed and empowered through ability to interact directly with other customers. This is a transformational trend that is dramatically changing the way distributors need to approach customer relationships. There is a need to look beyond traditional supplier/customer relationship. This is both an opportunity and a threat. The ability to incorporate e-commerce into your business plan will be key for success for distributors going forward.

Most distributors say that what sets them apart is the value they add to the product sale, whether that’s knowledge, aftermarket service or something else. Many also believe that value can’t be translated through e-commerce.  I have also heard that a website will hurt margins because “I am forced to post my lowest price”.  I say that is just talk from someone who is not ready to embrace how business is going to be done in the future.

The primary goal of a web shop should be to turn the Internet into a profitable sales and interaction channel that delivers convenience and satisfaction to business partners and end consumers.  A good web site helps achieve this goal by providing a common platform that supports multi-channel customer self-service interactions across E-Commerce, E-Marketing, and E-Service.  

E-commerce provides an opportunity for companies to provide superior service.  If you think about the core value propositions of leading distributors; availability, reliability and efficiency – all of those characteristics can be enhanced through a well-designed e-commerce system. The key is to make sure you’re giving customers access to relevant information and a personalized experience. They want to see the prices that are part of their agreements, not just the standard price. That makes it easier for the customer to do business with you.

To stay competitive, companies must be able to optimize the conversion of online engagements into profitable interaction at every stage in the buying cycle.

As always, I have enjoyed our time together, I hope I have given you insight into what needs to be done for e-commerce going forward.  Change is here and forward thinking distributors need to embrace it and use it to their advantage, because if they don’t, their competitors will.

Mike Wise is the Industry Principal for Wholesale Distribution at SAP America.  He is a wholesale distribution technology and operations leader with over twenty years of comprehensive experience in distribution and logistics environments, executing operational improvement strategies through technology. He focuses on enabling efficient distributor operations with SAP for Wholesale Distribution solutions

Contact mike at mike.wise@sap.com mike.wise@sap.com or follow on twitter @jmikew1964

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3 Comments

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  1. Karen Lynch

    Great insights, Mike.  Thanks for sharing your perspective. 

    E-commerce has become a necessity for distributors, as it will be the only way they can defend and compete against market disruptors like AmazonSupply.com.

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  2. Timothy Schroeder

    I agree the whole shopping experience has changed.  I research ideas, find what I want, compare, and often order, all on line.  Sometimes I have to go to a store to speak with an expert, but that is usually to confirm what I have already learned.  The buying process for wholesale distributors is steadily moving toward on line collaboration.  You are right,  E-commerce sites is the starting point.

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  3. Werner Baumbach

    Hey Mike,

    great points. I can see a lot of parallels to the way I like to shop. It is not only the convenience, because in many cases I would even like to go to a store that would have similar assortment. The simple truth is, there are hardly any, that have that breadth and depth of assortment. I love book-shops, also antique shops. I love to flip through books and get inspired. But if I look for something specific, often I need to go online as the item is not on stock.

    Being concerned about the price is probably a bit short sighted. Just because one store does post prices online does not mean, that I cannot do research online and have a pretty good understanding, what I consider a fair price. It does not necessarily mean that I will buy at the cheapest source. I do value service, like convenient delivery or easy returns.

    In many cases a multi-channel strategy that combines online, catalog and physical store will be a very attractive offering.

    To give one example of how not to do business: A while ago I was feeling supportive of our local stores and went into a camera store looking for an M42 adapter ring for my Canon camera. I knew exactly what I needed, stated my wishes and was told that such an adapter did not exist. I tried to persuade the owner to look it up in a catalog, but no, he insisted, that there was no such things. About five clicks later at home I had ordered the thing online and received it within the same week.

    Often traditional traders complain that Internet is killing businesses. And I think that is true for some, that have not realized that they had to adpat to a changing environment. The consumers are tremendously well informed today and have a lot of choices where to take their business. This situation will not change. So I think to remain succesful, companies need to find strategies that take this into account .

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