As B2B companies work to sharpen their focus on self-service ecommerce to satisfy a growing demand for it by today’s buyers, many manufacturers and distributors are striving to be more like their retail counterparts in designing an online buying experience that caters to the whims of customers.
At Systemax Inc., a distributor of industrial products including its own private labels, has deep ecommerce know-how from its former retail sites, including TigerDirect.com. With those deep online roots, ecommerce is a critical part of its growth strategy. Its sales last year grew 5.5% to $946.9 million, followed by a 2.1% decline in first-quarter 2020 sales to $227.3 million as the effects of the coronavirus pandemic began to take hold.
Going forward, Systemax sees its strength in its “ecommerce-centric” strategy helping it and its customers get through the pandemic and rebound with stronger sales. The company, which sells products ranging from forklift equipment to power tools, offers more than 1 million brand-name and private label products through several B2B ecommerce sites including IndustrialSupplies.com, Nexelwire.com, its flagship brand GlobalIndustrial.com and the Canada-based GlobalIndustrial.ca. It doesn’t break out ecommerce figures but notes that its ecommerce plays an important role for most of its sales, including customer orders placed with the help of sales reps.
Systemax CEO Barry Litwin, whose ecommerce experience goes back about 15 years with both retail and B2B companies—including periods as a senior executive in charge of ecommerce at Sears, Kmart, Office Depot, Newark Electronics and Block and Co.; and as CEO of Adorama, an ecommerce company focused on professional video and photography equipment—lays out Systemax’s strategy in this question-and-answer discussion edited for space and clarity.
How do you see B2B ecommerce developing?
I cut my teeth in the consumer space and have been in digital commerce for about 15 years. It’s an exciting space, often battling Amazon. B2B is in for a massive shift online and is now finally starting to catch wind.
TigerDirect really helped us understand what we can do in B2B digital commerce. It built a lot of confidence, and we’re now focusing on becoming a true digitally enabled company. We’ve been on a digital journey here for a while, developing the customer experience.
What are some of the key aspects of that customer experience?
The ease of buying on the website and mobile are just part of the story—it’s really more about the whole supply chain aspect of going digital. That gets into operational excellence driven by self-service and digital. It means reducing the time in transit to get products to the customer, and providing product knowledge expertise.
We developed a text-based order-tracking system for parcel or LTL (less-than-truckload) shipments that let customers know when a shipment will arrive. We’ve shifted from providing customer lead times to a customer promise date. We give the customer the time and date on our website when they’ll receive their product, and we hit that date.
How else are you improving communications with customers?
Our chat service, which is not a store-bought chat application, was designed in-house by our development team with the customer in mind. It allows for both proactive (seller-initiated) and reactive (customer-initiated) chat, and it’s designed with an algorithm to automatically answer common questions by customers. We’re finding the system is getting significantly more use than ever before.
We also track the voice of the customer, and we listen to what the customers say every day at a very granular level. We find out whether they’re asking for order information or product information.
What kind of technology team do you work with?
Our technology development team is small, less than 100 people, both in the U.S. and offshore. Our history was always biased toward technology and digital, and we carried over a lot of people from former operations. We challenge them with innovating products.
How do you handle fulfillment?
We added a seventh distribution center in 2019, and the redundancy built into our distribution network has allowed us to reroute order fulfillment as needed with minimal delays to our customers.
How are you handling the pandemic, and planning to go beyond it?
We recently launched Global Industrial’s R3 Program, which stands for helping customers restore, return and rebound their business. We recognize that most customers today need to figure out how to rebound their business in the next year. With our “restore, return and rebound” program, we go room-by-room with workspace solutions and products to help them in remote environments and in social distancing and in pandemic product storage. New products include cashier plexiglass panels, partitions, floor signs, touchless valves for bathroom faucets, and no-touch handles for opening doors. We have contract manufacturer factories all over the world.
And your sales and marketing efforts?
We recently hired Klaus Werner as senior vice president and chief marketing officer from HD Supply, and he’s building a marketing team with a new level of sophistication and marketing processes. That was a really big win for us.
We will continue to invest in salesforce efficiency with customer data and sales force automation and dynamic pricing techniques.
Ecommerce continues to be a competitive advantage for us. It’s not just about the direct entry of orders by customers, but also our reps working with key customers for products they order on our website.
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