Are electrical contractors getting what they need online from their distributors? The answer, as it happens so often, depends on whom you ask.
According to Bill Mansfield, senior vice president, sales and marketing at Graybar Electric Co. Inc., St. Louis, many distributors are investing in e-commerce capabilities to better serve customers who choose to do business online.
“We see an increase in customer demand for online ordering and self-service tools,” he said. “However, we also know that many of our customers prefer working with a sales or customer service representative.”
Dale Holt, president of Distributor Data Solutions, Salt Lake City, believes that the electrical distribution industry is lagging behind when it comes to using the latest technology and that what is being sold online is still fairly minimal.
“Of the top 200 electrical distributors, not half of them have e-commerce capabilities,” he said. “Of those that do, much of the content, such as product data, is incomplete.”
Some of the more sophisticated distributors do understand their Web traffic better and realize that, when customers leave the site, it is because of that very lack of content.
“If the industry doesn’t advance its e-commerce capabilities, it will lose business to those companies, such as Amazon, that are good at distribution, have competitive prices, and that target market aggregation,” Holt said.
One might argue that electrical distributors don’t engage more in e-commerce because their customers don’t use it much. However, the UPS 2015 Industrial Buying Dynamics study cites that 30 percent of wholesale customers are already buying products online, 40 percent prefer to get product information online, and 70 percent want to do business online.
“For all wholesale distributors, and electrical industry distributors in particular, e-commerce isn’t just about trying to sell commodities,” Holt said. “It should be about trying to maintain and grow the B2B base and responding to more progressive contractor customers who want to buy online.”
Make it easier, not harder
Distributors that have embraced e-commerce are trying to extend their offerings. According to Holt, distributors can make e-commerce easier for customers to use by ensuring that the platform operates on any kind of device, from desktops to tablets and smartphones.
“The sites also have to be easily searchable, and it has to be easy for the contractor to complete a transaction,” Holt said.
If the distributor has the talent on staff, it may be better to build the e-commerce platform in-house. Most distributors, however, don’t possess that talent and need a third party to provide what must be robust, searchable e-commerce capability. Graybar’s approach is to use proven technology platforms and to configure them to meet customer expectations and business requirements.
“We bring in outside resources with specific expertise to accelerate the development process and to transfer knowledge to our internal teams that maintain and enhance our e-commerce capabilities over time,” Mansfield said.
Distributors that haven’t embraced the technology make it harder for contractors to use e-commerce.
“Too many distributors offer a limited amount of product data and a limited number of items, as well as allow their sites to be difficult to navigate, search, and buy on,” Holt said.
“We realize any new technology we develop must make it easier for contractors to do business,” Mansfield said.
For example, distributors need to offer tools that generate accurate, consistent bid documents and convert those estimates into purchase orders for the contractor. Or integrate building information modeling (BIM) into platforms that may help contractors improve collaboration, accuracy and efficiency on construction projects.
What contractors should expect
E-commerce is all about helping contractors improve productivity and efficiency, according to Mansfield.
“For some, it is a convenient way to complete work outside of standard business hours and to place orders for future projects, track the status of their current orders, and research products,” he said.
“Electrical contractors should expect that they will easily find product descriptions, specifications and high-resolution images on their distributors’ e-commerce sites [and] be able to create common item lists, aggregate spec sheets, easily conduct transactions, and rely on the transaction’s execution,” Holt said.
However, e-commerce has limitations that make it more difficult to support complex purchasing decisions.
“Some of these larger transactions can become too complex to perform entirely online and still require personal interaction with the distributor,” Holt said.
Contractors will need distributors to create a comprehensive digital experience that will help them reduce the total cost of installation.
“Contractors will increasingly require distributors to transition a huge portion of their business to e-commerce and to have very robust, searchable and easy-to-use websites,” Holt said.