If You Build it, They Will Come
By Rick McCarten, VP, Electrical Council, Electro-Federation Canada
I am really proud of the Electrical Council’s latest research project, “Click and Order.” We took a huge chance by not hiring an expensive consultant; instead, we formed a committee of members to conduct the research and to develop the report. The research committee worked together to develop appropriate survey questions, distributed the survey to Kerrwil’s end-customer list, and closely analyzed the survey responses.
Interestingly enough, I found the committee to be much more engaged and thoughtful with the process than a consultant would. This might be obvious to some, but the committee knew more about customers’ issues and the kind of questions that needed to be asked. They were closer to the subject-matter and more knowledgeable on the subject than a consultant.
Who’s Buying What and How Much?
So what about the findings from the report? The big news is that, based on the responses and through our estimation, close to 10% of electrical sales in Canada are now done online. Some provinces are higher than others, but everyone is ready to use more of the tool. Also, the responses determined that age was not a deciding factor; all ages of respondents had gone online to make a purchase and had the equipment to do so.
In our industry, customers are purchasing the following product types online: lighting, test and measurement tools, wire and cable as well as wiring devices, and distribution equipment. With lighting and wire in the top three, the committee speculate as to why? Assumptions ranged from a large number of new suppliers that do not have local branch locations, to customers feeling comfortable buying familiar commodity-type products online.
This activity leads me to ask: if customers are ready to make electrical purchases online, why are only 10% of purchases done online? It seems like the biggest obstacle is “us” — the traditional supplier. Customers indicated that the following barriers prevent them from shopping online: difficult to return items, difficult-to-use websites, privacy concerns, delivery costs, and most astoundingly, their traditional supplier is not ready to offer it. Many also suggested that their own company had not developed the right protocol for online purchases to go into full action.
The Need to Develop a Seamless System
When asked where customers receive their information, most respondents indicated the manufacturer’s website. Number two was the sales rep. A bit of the old and the new. This was closely followed by the distributor’s branch and the distributor’s website. If companies could develop a seamless system between rep, website and branch, this could create a winning combination. This combination would not only ease use, it would greatly reduce some of the barriers like delivery costs and returnable items.
The Major Hurdles
There are still some major hurdles to overcome for online sales. First and foremost is the lack of a relationship. Nothing replaces strong relationships that add immense unwritten value to the process. Second is the need to quote on projects. The value and service that the channel provides is hard to replicate on the Web (but never say never!) Third, is solution-selling: a customer has a problem and you solve it prior to him or her doing any research on the Web. How does an online service do that?
The clearest answer here is to adapt the new technology to our existing model — to improve our model.
In closing, if your company has an online presence (or plans to develop one), remember to continually promote the website! A few survey respondents indicated that they don’t purchase items online from their distributor because they weren’t even aware that an e-commerce site existed! It is necessary to keep you customers informed about your progress. This also provides an opportunity to build closer relationships with customers, so that together, you both build the kind of platform that would make your supply process run smoothly.
Electrical Council members can obtain the full report by contacting Swati Patel at spatel@electrofed.com.
