Pro tip: It’s not usually the CEO’s fault
Myth: We hear a lot of distribution employees complain that they can’t succeed online because their CEOs are unwilling to invest in ecommerce. But when we talk to CEOs, they point out that they’ve spent hundreds of thousands or more on ecommerce and haven’t seen a return on those investments. We think distribution leaders in charge of ecommerce should make sure they’re not making these common mistakes before they blame their CEOs.
No matter how hard you try, it’s really easy to build a doomed website. In a recent episode of the Wholesale Change webcast and podcast, we discussed the real reasons distributors’ ecommerce efforts tend to flop.
Top Blunders in B2B eCommerce for Distributors
No. 1: Wrong requirements = Wrong capabilities
One of the first problems we see is that ecommerce and marketing departments define the wrong requirements upfront. As a result, the ecommerce platform is built with the wrong capabilities. It may be brilliant and beautiful, but it doesn’t work for distributors’ purposes.
One of the most common problems we see is that distributors build sites like a retailer’s: a bunch of SKUs with a shopping cart that requires a credit card to make a purchase. That works for Amazon but that’s not how most of your current customers buy from you. This model doesn’t reflect the complexity of most distributor transactions. Your site must be fully integrated with your ERP and allow workflows, purchase order payment, order scheduling and more.
No. 2: Unrealistic expectations
Distributors tend to set unrealistic expectations for how much revenue should go through the website itself. Buying, which is how customers order, is only one-half of the buyers’ experience. The other half is shopping, or how people find, research and evaluate their purchase.
You can’t apply a traditional ROI model here. eCommerce success can’t and shouldn’t be measured through your shopping cart alone. B2B customers will still execute orders through their ERP, email or a phone call, but your website aids in their shopping experience – which is harder to track and measure.
Unfortunately, this often results in distributors declaring failure based on what’s sold online instead of how much value the site delivers for customers. If you get lots of engagement on your site, you may be succeeding but customers are simply completing their purchases through other channels.
Remember when distributors mailed out lots of paper catalogs? Often, those catalogs had an order form in them so customers could mail or fax orders to the distributor. But nobody measured the return on the catalog investment on order-form sales because we all knew customers were more likely to call us. Measuring the return on your website based on your shopping-cart sales is the same thing.
No. 3: Incomplete product data & No. 4: Poor search or other functionality
Product data and search functionality are interconnected. You must have a decent amount of rich product data on your core products and a good search engine to meet today’s expectations. When customers search for products on your site and get irrelevant results, it points to failures in one or both of these areas.
So, stop frustrating your customers.
They’re used to Google and Amazon, and irrelevant search results are a quick way to drive them away from your site. And the standard is rising thanks to new forms of search like voice search and item recognition search. It’s worthwhile to upgrade your search engine and develop quality product data.
No. 5: Content is not personalized.
Most distributors’ content isn’t personalized. On their sites, every visitor sees the same thing.
That’s not the expectation these days.
Amazon uses AI to push suggestions to users based on their demographics and needs. For distributors to compete, they must get beyond basic data for core SKUs and get over this next hurdle. Personalization, such as in cross-selling and reordering, is key to creating a good customer experience.
No. 6: eCommerce is the most expensive way to buy.
If your website is the most expensive way to buy from your company, customers will figure that out quickly and buy through other channels – or from your competitors. This is another reason not to measure ecommerce ROI based on your shopping-cart sales: If customers can get discounts from calling sales or customer service, your website’s sales performance is doomed.
However, if you view your website as a place where customers shop before they “buy” from another channel, you’ll have a better handle on the kind of value you’re adding through ecommerce.
No. 7: Incomplete assortment and information (See: “Call for Price”)
Offering an incomplete assortment on your ecommerce site is lethal. If a customer puts four items in their cart, and, when they go to add the fifth it says “Call for price,” that means they can’t complete their purchase. Why would they ever try to buy on your website again if there’s a chance they’ll have to call you anyway?
There is still a benefit to having that ecommerce site available for shopping, and you may not have to worry just yet if your customers still use traditional means to order. But 2020 saw an incredible amount of channel shift from phone/walk-in to digital. It’s worth understanding that if you don’t have a competitive ecommerce experience now, you’ve fallen much farther behind some of your competitors in the last year.
No. 8: Incomplete value proposition
Does your website clearly explain your value proposition and offer a detailed list of the services you provide? We find that many distributor websites contain low-interest claims (e.g., “Serving the Valley Since 1991”) but do not tell customers how the company differentiates and describe its full range of services.
Have you built a doomed website? Does it feel like you got it all wrong? Read our article about pulling your eCommerce system back from the jaws of defeat.
Ian Heller is the Founder and Chief Strategist for Distribution Strategy Group. He has more than 30 years of experience executing marketing and e-business strategy in the wholesale distribution industry, starting as a truck unloader at a Grainger branch while in college. He’s since held executive roles at GE Capital, Corporate Express, Newark Electronics and HD Supply. Ian has written and spoken extensively on the impact of digital disruption on distributors, and would love to start that conversation with you, your team or group. Reach out today at iheller@distributionstrategy.com.