Office Products (OP) distribution was the first industry to adopt B2B ecommerce in the 2000s. Today, it is the most digitally sophisticated B2B ecommerce vertical, providing lessons that other distribution industries can learn from.
The OP digitalization journey spanned 20 to 25 years. Most other B2B industry verticals still look like OP did in the early 2000’s, but evidence shows that the timespan for similar impacts in these verticals could be as short as five years. Review some of the lessons learned below and get started on your ecommerce venture!
Don’t wait to get started: Going online is a transformation journey, not a single-day event.
The OP B2B ecommerce journey began in the 2000’s and accelerated as Big Box retailers such as Staples made a massive shift online, challenging independent distributors. A decade later, OP was the first B2B vertical Amazon Business entered. Today, most independent OP distributors are doing more than 70% of their business online—those who didn’t get there have gone out of business.
Engage your entire organization in the shift to online: Make sure your sales incentive structure and commissions aligns with your goals in an online world.
Many distributors look at ecommerce as a separate effort from their core business, using terms like “Digital Branch.” The ecommerce component of a business must be fully integrated throughout the core sales and marketing process, otherwise it will fail. The entire customer-facing organization must embrace ecommerce and have their incentives and commissions aligned to the digital goals. Many early OP ecommerce adopters failed to see this, and the organization worked to preserve the status quo where they felt more comfortable, thus hindering their digitization and ultimately resulting in failure.
Complement your existing team with digitally savvy new hires.
Adding a small number of technologically savvy next-gen team members clearly accelerated OP distributors’ efforts, but they needed to be given the opportunity to help drive internal process change. The most successful distributors created aligned teams across marketing, sales and customer support with longstanding and new employees working side-by-side.
Deploy an exceptional web platform loaded with excellent product information that can also connect to your back-office systems.
Staples, an OP giant, is the best example of how this works: they became one of the biggest online players within a short time period because they focused on having the best product content and webstore to create the ultimate customer experience. They constantly experimented to understand what their customers valued most.
Make sure your site is fully mobile responsive.
“Mobile everything” is today’s expectation in OP. Shoppers are no longer sitting at their computers to research products, compare pricing and make purchases. Instead, they’re bouncing back and forth between their tablets, smart phones, and computers. If a potential or current customer cannot access your website on a mobile device, they’ll move past your site and continue their shopping on a site that does work on mobile. Don’t lose these customers because your website isn’t mobile friendly. Get a website that works on mobile.
Incentivize your existing customers to come online. You and your customers gain real efficiencies through this process.
OP statistically proved that if you can get a customer to order online three times, they will likely stay with you over the long term. Combine your knowledge of your customers with the right campaign messages to bring this to fruition. Offer three promotions to your customers on their first three orders. For instance, in week one, offer a coupon for a product you know they frequently buy; in week two, give them a free gift when their order exceeds a certain amount; in the third week, give them a buy-one-get-one-free special. Make sure these promotions are available exclusively through your webstore—not through your direct sales representatives or your paper catalog—to ensure they keep coming back to the webstore to make their purchases.
Don’t compete solely on price. Instead, create value-added differentiating services like design, installation, maintenance or warranty.
Initially, OP distributors tried to compete solely on price, which led to significant margin erosion. Ask yourself: What service can I provide to support the products I’m already selling that will differentiate my overall marketplace offering? For instance, you could lease appliances rather than just sell them or you could send an employee to preform annual maintenance on appliances. This gives your webstore appeal over a traditional store that simply sells products, which gives you a leg up against your competition.
Take a deep look at the overall procurement needs of your existing customers: Do they buy adjacent products that you can also sell them? By answering this question, you can grow your share of wallet with them and make the logistics and overall pricing more effective.
OP expanded to become “Business Products” as sellers added product categories traditionally found in other industries—Technology, Janitorial, Breakroom, Safety, and some Industrial Supplies—to their catalog. They realized their customers were purchasing products from all these categories and they wanted to become a one-stop-shop for office purchases, rather than just a single component in the daily business needs. Providing more products means you’re likely to see bigger orders, which means more products can ship together and logistics cost will be lower. Additionally, selling more product to current customers is more effective than finding new customers. If you branch out into the right direction, every party largely benefits.
Enable procurement software punch-outs to your website for your larger customers and government or state entities. Integrated e-procurement capabilities are now expected and result in a very sticky customer relationship.
Punch-out e-procurement services grew dramatically in OP over the last decade; they became a significant selling point and allowed smaller distributors to offer equivalent capabilities to Big Box competitors. Don’t know what a punch-out is? In simple terms, it’s a process where customers order you’re your website through their procurement system, gain the product information they need, then get their internal approvals so the order can be completed. In other words, it’s as close to a direct connection with you that an institutional account can get. Most large customers and government entities have shifted to managing their e-procurement by leveraging punch-outs to better manage spend and maintain insight of purchasing activity.
Dave Bent is president of U.S. Operations for ES Tech Group, a provider of ecommerce technology and services for manufacturers, distributors and wholesalers across multiple industries. Prior to ES Tech Group, he was chief information officer at Essendant, a $5 billion distributor of business products that recently became part of Staples Inc. At Essendant, his responsibilities included taking the company and its customers from paper catalog-based selling to digital webstores.Favorite