For distributors, the question is no longer whether they should embrace digitization. They should now be assessing how far along they are in the journey, where they’d like to go, and what they need to do to get there.
Although every great digital strategy requires a website, there’s much more to it than that — and figuring out how to identify the right goals, strategies and processes can be daunting.
Digital technologies can be applied across a distributor’s business to improve efficiencies and remove friction across the board:
- Distributor to Customer: This may include online training, product search and selection, services information or scheduling, account management, chat, delivery tracking and much more.
- Distributor Internal: Process automation, internal communication and project management.
- Distributor to Supplier: Communication, shipment tracking, financial reconciliation and training.
Ian Heller, Chief Strategy Officer at Distribution Strategy Group, hosted a panel of experts in digital strategies for distributors. (Listen for yourself: Access that conversation on-demand now.)
The conversation was lively and enlightening. At one point during the discussion, after listening to his fellow panelists, guest Jason Hein spontaneously remarked that he always enjoys the panels that Distribution Strategy Group curates, because “there are just so many smart people that get into these conversations.”
- Ryan Lee: Founder and CEO of Nautical Commerce, the multi-vendor ecommerce platform
- Joe Albrecht: Founder, CEO and managing partner of Xngage, a digital commerce consulting and services firm
- Jason Hein: Principal B2B Visionary at Bloomreach; a leading digital strategist and innovator for B2B businesses
- Blake Vinson: Vice President of Solution Engineering at DataXstream
Where Are Your Customers?
One of the most important takeaways from the panel was that you can start your journey with small steps — but you do need to get started. If you don’t, you’ll get left behind.
Heller underscored this point by citing the well-known saying: “People explaining why something can’t be done are often interrupted by those who are doing it.”
A theme that emerged was the importance of meeting customers where they are. As Lee put it: “Don’t force them to come to wherever your current business model is. For me, success factors are fairly straightforward. You know, start small. You don’t need to move the needle significantly to take baby steps into a digital transformation journey.”
“One of the things we focus on is actually creating buyer and seller interactions and asking the question not only what do the customers want, but what do the sellers also need to be effective in this cross-channel world — so that they can get the full picture of the customer, their needs, their behaviors and their businesses, and then actually effectively sell to those customers using digital means,” said Albrecht.
Heller mentioned that when he was at GE Capital, in the early days of the Internet, they had a call with Michael Dell, who was one of the biggest names in technology at the time.
“And one of the senior executives said, ‘Michael, at what point do you tell customers you don’t have any choice? If you want to buy from us, you have to buy online?’ Dell started laughing and said, ‘We would never do that. If our customers want to buy by sending us smoke signals, we’ll learn how to read smoke signals.’ It’s not our business to tell customers how to buy from us. Our business is to make it as easy as possible for them to buy from whatever channel they want to buy from.”
Crawl, Walk, Run: Why You Don’t Need to Boil the Ocean
Another theme the panelists continually returned to was the importance of starting small. In Lee’s words: “A lot of digital transformation projects fail because people just try to boil the ocean. You don’t need to start with the dream; you don’t start with the vision, right? It’s a journey. And your job across that journey is to constantly chip away at removing the friction to buy.”
Lee continued: “You know, I think thematically that’s what we’re discussing here, is making it easy for the customer to execute a transaction over the channel they want.”
Albrecht described starting small as the “Crawl, Walk, Run” model and said, “This is the right way because it will teach you where the gaps are in order to really succeed in the digital world.”
Lee shared an example: “I’ve got a customer that did this, right? They digitized their business. They had a very successful business, and their grand vision was marketplace. But what they started with was digitizing the internal transactions.
“So, when the calls came in, they started digitizing them. And they effectively worked out all the kinks internally before they ever exposed it externally. They were thinking big, but they didn’t just turn it on. It wasn’t a light switch. They started internally to eke out all of the inefficiencies before they went and did the marketplace model.”
Testing and a Focus on Customer Feedback
As you digitize the business, Hein noted the importance of testing: “If you’re going to test small, test something meaningful. So, if you’re going to pick a category of product, pick one that has activity, that people are searching for, that people are buying from you. If you pick a category as your pilot and nobody wants to buy that from you, then the reason it’s going to fail is not because of your experience.”
“Some of my favorite pilots I’ve seen are more around a mix of customers,” Vinson said. “Rather than rolling out a set of stores or a division, you can roll out a certain process with maybe your most important customer, a middle and a smaller one who have varying different levels of insight into the pilot rollout. And that helps.”
Hein agreed. He said pilots give you the data to avoid building big gambles on what you think is going to happen. Instead, you can start observing actual customer behavior and use cases. “Adjust your course midstream so that you sidestep and avoid big digital failures,” he said.
Lee agreed. “Customers are going to inform you about where you’re right and wrong. It needs to be about the friction in the buying process. That’s the question: How did I make this difficult for them, to execute a transaction with my organization? That’s it.”
In the end, the customer just wants you to make their job easier – easier to make profits, easier to get work done, easier to place orders. “I think that’s what Staples was onto with their easy button a long time ago,” Heller said. “Unfortunately for them, Amazon made it even easier, right? They had the right answer, but they got out-executed.”
Watch the full conversation on-demand: Technology Leader Panel: Solutions that Enable Great Digital Strategies