Making a splash on the 'Net
Distribution can learn from Home Depot's online strategies
By Sara Procknow -- Industrial Distribution, 11/1/1999
IF LIFE IS OUR BEST TEACHER, then Home Depot may very well be distribution's best example.Home Depot has taken several recent steps, which when complete, will provide HD with a very aggressive Internet strategy -- one that will include some things that distributors have wanted to do for years.
First, Home Depot revamped its Web site to include a whole host of innovative personalization features. Then, they fired off a letter warning manufacturers not to compete with them for customers online. As if that wasn't enough, Home Depot is currently in negotiations with Amazon.com in an effort to gain even more traffic -- Amazon's 10.7 million customers to be exact.
For the first time, I'm actually taking Home Depot's side on an issue, especially how they handled manufacturers selling direct online. The way Home Depot sees it, manufacturers who sell tools online will be in direct competition to the Home Depot site and its e-commerce strategy. Home Depot is absolutely right. These same manufacturers selling direct online are also in competition with distributors, only most contractor supply folks don't have enough clout, or sales volume for that matter, to threaten the all-powerful manufacturers.
Think about it this way: Home Depot is not going to market in a very traditional manner. Their Web site is a bit unconventional. The way they handled their vendors was an outright threat. But guess what? They've got the customer's (and manufacturer's) attention.
I was awakened to a similar theory just a few weeks ago when, during a camping trip, a moose made an unexpected visit to my tent in the middle of the night. I was in an environment where I expected to experience nature, although not a moose up close and personal.
Think of your company as the moose. Like Home Depot, you need to venture beyond the traditional realm of your territory, seek out customers' familiar stomping grounds and give them more than what they expected. Don't just go ambling aimlessly down busy Main Street, because the effect can be tranquilizing at best -- you put out way too much effort to get there and only strike fear in your customers.
Take a look at what Home Depot did with its new site. It has several personalization options that demonstrate Home Depot's value to the visitor. The interactive offerings include access to project ideas based on customers' interests. Of course, this area of the site also features a shopping list of tools and materials needed. The site lets the user store dozens of favorite how-to projects. Then, members sign-up to receive an e-mail newsletter containing advice related specifically to their preferences. The e-mail even includes announcements of events at their local store.
According to Home Depot, "The implementation, developed for an anticipated 20 million visitors per day and 40,000 concurrent users, was no small undertaking." And the next phase in the Home Depot Web strategy is e-commerce, which will launch later this year.
The bottom line: Your customers are out there on the Internet and they're using all the familiar channels, and some new ones, to find you. If the Home Depots of the world are using the Internet as a testing ground for exploring new markets, why not follow suit?
Send your comments to Sara Procknow at sprocknow@cahners.com
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