As a technology, ecommerce has reached maturity. However, significant innovation is still happening with a focus on improving the customer experience and differentiating online. These changes are driven today, in large part, by the rise of artificial intelligence (AI).
Jonathan Bein, co-founder of Distribution Strategy Group, recently led expert panelists in discussing opportunities to differentiate with digital commerce. The group included:
- Mike Powers, Director of eCommerce and Digital Strategy, ARG Industrial
- Klaus Werner, Chief Digital Officer and Advisor, Egility Group
- Jarrod Anderson, President and CEO, Walker’s Office Supplies
How will ecommerce revolutionize customer engagement, drive loyalty and unlock new avenues for growth? What hurdles remain to leveraging ecommerce to its full potential?
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Fulfilling Complex Sales Online: Is It Possible?
When evaluating the role and importance of the distributor to a customer, the DSG Distributor Relative Value Models considers the complexity of the transaction for any given product. The complexity falls along two dimensions:
- Logistics complexity
- Product/service complexity
The more complex or customized the logistics and product/service offering, the higher the value, and the less likely a distributor’s position will be disrupted.
Traditional ecommerce is limited to relatively simple transactions; an easy-to-use website with a wide product assortment is simple/standardized both in product and logistics complexity. Distributors face a very high risk of disruption.
But can configurators on a website allow more complex transactions and make it more difficult for the competition to take that sale?
ARG Industrial sells hose and fittings. Even a few years ago, when they launched their ecommerce website, customers were craving better customization. They’d place their order, and in the order details they’d write: “I need a 65’ assembly ready in two weeks.”
About a year ago, the company partnered with a third-party vendor to develop a rules engine that incorporated simple but important questions such as working pressure or application. The platform eliminates the products the customer doesn’t need and expands product data in the direction they want to head. “We basically brought all those potential combinations into one place where that customer, based on their need, can create the assembly,” Powers said.
The configurator went live about two months ago, and Powers noted, “It has made our customers’ lives much easier.”
Anderson sees guided ecommerce interaction on the furniture side, as well. Configurators allow for customizing headrests, arms, seats, mechanisms and more. “There’s a ton of value there that other sites can’t compete with.” While the value to the customer seems obvious, there are also company benefits.
“Order accuracy, margins and consolidating purchase orders” are all points of differentiation, Anderson said.
For ARG Industrial, one surprise was that the rules engine helps train new employees. “They’re getting ramped up so quickly where historically in our business, it took about a year, maybe a year and a half for somebody to be well-versed,” in all the possible configurations to fit the assemblies their customers needed, Powers said.
Anderson also wasn’t prepared for the impact on counter sales. “It’s amazing; they have swivels on their in-store monitors. So, the customer looks at the monitor as they go through the journey. It’s a tool in their toolbox that allows them to focus on what we really do well.”
AI + eCommerce: Balancing Efficiencies with High-Touch Service
Are there more complex situations where intelligent chatbots could eliminate some of the work from a CSR or sales rep and bring that distributor’s value online?
“I think that as you start leveraging AI and having these chatbots, they’re going to reduce your cost to serve because in some cases, a machine is going to do what a human does,” Werner said. “You’re going to get a lot more consistency and improve the quality of the responses. It will drive more self-service and hopefully sales.”
However, he cautioned that customers need an “escape hatch” for going to a live CSR when the automation becomes a frustration. “There’s nothing more frustrating for a customer to be pushed down this automated system when they really need to speak to a human being to get what they need,” he said. “I see these systems getting better over time and we could at some point live in a world where 90% of our questions will be answered by a bot and not a human. But between now and then, the escape hatch will become increasingly important.”
Anderson agreed. “Sometimes I like to keep it old school. I want to keep a human element. I think these chatbots are good to a point, but when you call the credit card company and push zero to talk and don’t get anyone — I don’t want my customers to pay the price.”
Powers pointed out that the high level of complexity required in his industry sometimes requires human intellect to ensure the assembly is safe, correct and functional. He called AI “a bridge or another portal to get them to our people,” agreeing that there is a time and place for these tools — the trick is to find the right use cases to make them work.
Digital Commerce Beyond the Shopping Cart
From structured PDFs to voicemail, text or even handwritten mailed orders — distributors get business across all their channels. eCommerce does not exclusively mean shopping-cart sales on a website.
“If you really think about sales and B2B, the fastest quote wins,” Werner said. “So, speed means sales and revenue. If you can read an unstructured email, create a quote and have it ready for someone to review or have it posted into the customer’s account or whatever the right process is, it’s going to put you at a competitive advantage against everybody else out there because speed wins a hundred percent of the time.”
Every distributor has lost sales because it takes too long to respond; and no distributor wants a sales rep to spend one-third of their day reentering data into the ERP. Getting the quote to the customer quickly moves you close to a closed deal. So, automation can set you apart, Werner said.
“I see this working nicely together in an ecosystem. That’s how I see the world moving in the future in a way that gets the salesperson out of the way. Automation can read the unstructured email, create the quote, post it on the customer’s account, send a text, review it and submit. You don’t want to use salespeople. You want the salesperson to focus on these more complex orders that drive greater revenue, higher customer acquisition and retention.”
Anderson agreed this is the best option for what’s next but admits: “I’m not anywhere near that. I think it’s interesting, but how will that order get into my ERP? My ERP, ecommerce and AI all must get along. So, I have more questions than answers right now.”
Powers said his company was where Anderson’s company was just one year ago. “When we went to the Applied AI conference, we came back with use cases that identified business areas where we could save massive time and allow our salespeople to sell.”
After the conference, they formed a technology committee to vet those use cases. He continued:
“We realized we have people in our branches hitting keystrokes that we could probably eliminate. Really smart, talented people are doing jobs that some of these tools can eliminate. If there are areas of the business where we can set up automation through some of these tools that allow our people to save time and money and service the customer really quickly — those are all things we’ve recognized in sales and shipping and receiving.”
A Hurdle: Product Data Management
All of this sounds great, until it comes up against the complex web that is product data. Keeping hundreds of thousands – sometimes millions – of SKUs up to date and in a usable format across channels is not an easy task.
“Product data has been a challenge for me and my peers for my entire career,” Werner said. He pointed out three critical areas where distributors can have an impact on data quality:
- Distributors must get the right amount of manufacturer data that makes each product attractive to the personas they sell to. Werner said holding the manufacturer accountable for the appropriate data flow is important.
- Distributors need a good-sized data team or a third-party partner to help collect and manage the data that flows into the client-facing ecommerce site.
- See if you can leverage AI to help with data consistency. AI can democratize the data across the organization.
Werner doesn’t believe rigor around data will be a point of competitive advantage because data is a commodity. “The length, size, width and weight of a product is not how you differentiate yourself,” he said. “Differentiate yourself in execution, in value and service, but consistent data won’t differentiate you as a distributor.” Instead, consistency is a must-have.
Anderson’s company recently launched a new ecommerce site but had a learning curve regarding the content. “We decided it was better to go deeper rather than wide to start and get the really good content on the products in our warehouse.”
It was a bird-in-the-hand approach to generate more immediate profit on their most popular products. So, they focused first on honing the most relevant or commonly sold items. “Maybe we could generate better content and worry about getting wider later. But building those redirects and pushing the right content to the top has been a huge focus for us.”
Hear more from our panelists on this topic. Watch on-demand now.
