There’s a more significant Memphis relationship than just geographical location between building automation parts distributor Kele Inc. and FedEx Corp.
The two companies are both based in Memphis, Tennessee. But Kele, which carries more than 300 brands and 1.8 million parts, including sensors, transmitters, switches, gauges, valves, actuators and relays, uses FedEx as a business model to build up its national delivery capability and to recruit key personnel to help Kele build up its B2B ecommerce infrastructure.
Kele, in business since 1983, also provides such related services as custom panel assembly, specialized sourcing, and technical support for automation control products. The company also has operated an ecommerce site since 2000.
Bringing in expertise from FedEx
John Strawn, chief marketing officer, Kele
But Kele has only recently been building up its B2B ecommerce infrastructure. Kele hired a pair of former FedEx managers, including a chief marketing officer, is making acquisitions to expand its national network for faster delivery and expediting order fulfillment. Kele hired chief marketing officer John Strawn, who at one point was the founder and leader for the digital strategy oversight committee at FedEx and the architect of its mobile strategy for FedEx.com.
Kele also hired Stephen Rudolph as its chief technology officer. Prior to joining Kele, Rudolph was the manager for the FedEx.com content and interactive marketing information technology staff.
Together, Strawn and Rudolph have been rebuilding Kele.com and unifying and integrating a string of recent acquisitions into a national expansion for faster delivery.
Acquiring distributors
Last July, Kele acquired for an undisclosed price MIContols Inc., a distributor of building automation controls, industrial process controls, and instrumentation based in Portland, Oregon.
Kele followed up its deal for MIControls last month by acquiring Temperature Control Systems, a Dallas distributor of commercial/industrial HVAC controls, burner/boiler controls, and building automation systems, for an undisclosed amount. “For the past two years, Kele has worked to get products closer to our customers for even faster delivery” says Kele CEO Richard Campbell. “Temperature Controls Systems will strengthen our ability to serve customers in the south-central region, and specifically across Texas, Oklahoma, Arkansas and Louisiana.” In October 2017, Kele also acquired Control Systems Inc., an HVAC systems and controls distributor based in Boston.
Kele, which built and operates its own B2B ecommerce platform, is no stranger to selling electronically to its primary customers: managers of building automation systems and contractors that install, maintain and repair building automation systems.
‘Ahead of the ecommerce curve’
More than 50% of Kele’s total annual sales of about $140 million are done electronically through ecommerce and electronic data interchange (EDI), the company says. Some sales are e-mail but are processed manually. “We think we are way ahead of the ecommerce curve,” Strawn says.
Kele operates a product inventory worth $16 million, and that inventory is expanding because of the acquisitions, the company says.
Over the last two years, Kele has been rebuilding its ecommerce site and adding or expanding such features as faster site search, updated images and more content, including pricing information, product data and specifications and product installation videos. “We now have more than 120,000 web pages that help customers find and source products faster,” Rudolph says.
With an updated ecommerce site, Kele’s next priority is using digital technology to help buyers of building automation technology more quickly find and get the parts they need.
Expanding next-day delivery
Kele already has pretty good delivery metrics. The company’s inventory includes 1.8 million parts from more than 300 manufacturers. Kele offers free shipping available in 48 states for orders of $750 and above. All orders for in-stock products are shipped within two business days and Kele also ships products overseas to 40 countries. “There are good reasons why we are warehoused strategically in Memphis, the largest airfreight hub in the U.S.,” Rudolph says.
Kele’s recent string of acquisitions now gives the company more local and regional delivery options and to expand next-day delivery to as much of the country as possible and to work to offer more same-day options
Stephen Rudolph, chief technology officer, Kele
The company has yet to say when it can expand same-day and next-day shipping. But faster shipping, tied to the faster and more personalized ordering of new and replacement parts, give Kele a leg up on competitors in the building automation parts market, a market with annual sales of more than $50 billion, Kele says.
“Many of our competitors drop-ship, but the more local we are and the faster we can get parts to that contractor—that gives us an edge,” Strawn says.
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