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Customers love the catalog, but... the web rules

Evolving site still points people to the catalog ... and vice versa

By Joe Nowlan, Associate Editor -- Industrial Distribution, 2/1/2005

A potential customer pages through a catalog, seeking the answer to a problem. He sees a likely solution on page 23. Looking for the company's Web site, he logs on, clicks the appropriate links, and places his order. It's on the truck and in the mail.

This is a common occurrence these days, of course. Such a scenario might describe someone looking for aromatic candles, maybe, or a hard-to-find book. Care to guess what product was purchased in the above example?

Would you believe that's how welding equipment is purchased from Airgas, Inc.?

And while still on the site, that same customer is reminded that Airgas also handles several lines of related safety equipment. This latter scenario—"increased account penetration," as Steve Max, Airgas' director of e-commerce describes it—has been an additional benefit that has pleased Airgas executives and their customers.

This scenario aside, the success of Airgas' Web site isn't judged by its sales numbers, but rather by its ongoing usefulness as yet another tool to complement the work of its sales reps and the company's paper catalog.

"Customers go the site and become aware of Airgas' complete range of products," Max says. "Many weren't aware, for instance, that we sold those safety products. They'd see them and either buy them online or contact their sales rep and start buying those products—very much in the same way as when you mail a print catalog to a customer, you'd expect that to drive orders."

Airgas is the largest distributor of industrial, medical, and specialty gases and related equipment in the United States. Based in Radnor, Pa., it also handles safety and welding equipment and a general line of MRO products. Overall, the company estimates that it works with more than 800 manufacturers.

Jim Ely, vice-president of communications for Airgas, explains that "57 percent of our revenues are industrial specialty and medical gases and a big chunk is welding equipment, supplies and safety products."

Airgas is also the largest U.S. distributor of welding supplies, he adds, and the third largest of personal safety products. Its highest selling items, Ely says, are cylinder gases. The company has more than 900 locations (650 of them are retail locations) with more than 1,000 outside salespeople.

Airgas' experience to date with its Web site indicates that no one particular product dominates the buying habits of its online customers.

"Sales that occur on the site really mirror the same product mix as the traditional channels," Max explains. "The customers ordering gases over the phone will order gases over the Internet. We really haven't seen too much dominance of one product category over another."

Work in progress

Since its inauguration in 1992, the Airgas Web site has seen its activity double each year, to the point where Max now estimates that it receives approximately 100,000 visitors per month, with "the vast majority [being] existing customers," he says.

Virtually from day one, the company has kept tinkering with the site, often times as a result of feedback Max and the technical people at Airgas receive from customers.

Most recently, Airgas has added more product links or "micro sites," as Max describes them, "that allow customers to drill into a more industry-specific section of our site. We're continually getting feedback from customers and our people in the field and making constant improvement to it."

Airgas is in the final stages of polishing a new feature for its site, Max adds—a direct result of customers' requests.

"Some of our customers prefer to search for products by using their own internal part number," he explains. "So we've enabled the Web site to allow them to enter their own internal part number as opposed to having to use the Airgas number."

Other sources of feedback have come from their suppliers, such as Miller Electric Co. Miller's e-marketing manager, Sue Feldkamp, likes what Airgas has done online and refers to some Miller customer surveys to show why an effective Web site can be so crucial for a company like Airgas.

"Forty-two percent [of survey respondents] tell us they will use either the manufacturer's or the distributor's Web site prior to making a purchase," Feldkamp says, "and even afterwards for product support. So there's a good audience out there that's using the site and other sites in general."

A potential buyer of a Miller product can visit the company site and then type in their zip code to see what distributors are in their area. If a distributor has a Web site, such as Airgas, a link to that site is provided.

From a manufacturer's perspective, Feldkamp explains, "our goal is to provide information and support to our customers and then connect them with a distributor. We do not sell direct, so it's very critical to connect them to a distributor. If a distributor has a Web site, part of the function of our site is to get the customer over to that site."

Numbers aren't everything

Obviously, sales are the ultimate goal for a company's Web site, but Airgas realizes that sales numbers are hardly the best way to measure how well the site is doing, or how constructively their changes have been received.

"We look at the mission of the Airgas site not so much to drive online sales," Max explains, "but to help customers in general make a purchasing decision by giving them all the information they need about a product or group of products."

So can we expect that sometime soon that Airgas will eliminate its print catalog as a means of selling and marketing? Hardly. The Airgas catalog itself will continue to be readily available for order online, Max explains.

"We've just released a new paper catalog of our products, which is produced by the same people who manage our online content," he says. "We don't view them [online and print] as competing. We view the online catalog as a supplement to the paper catalog."

In fact, Max's and Airgas' experience has shown that many customers who order online will use the paper catalog for reference—leafing through it and then order an item from the Web site. Feldkamp concurs that people will always want that paper catalog.

"The Internet is not going to take over paper, just as television didn't replace radio," she says. "It's an enhancement, another option. But I don't think it's replacing [the paper catalog]."

Some companies—even those whose Web site has proven successful—have occasionally had to walk a tightrope between their Web sales and their outside salespeople as far as how a sales rep's potential commissions are impacted when a customer makes a purchase online. Airgas has had no such difficulties in this area, Max says. Outside salespeople still get credit and the same rate of commissions from customer orders made online.

"Our Web site is integrated directly with our branch locations. So if a customer places an order on the Web it prints out at the branch that would normally service them," Max says. "It's not going to a centralized location and the customer is still dealing with the same people. For example, the rep you called directly on Tuesday over the phone is the same person you'd call about an order placed over the Web site."

In turn, that rep will get an e-mail confirmation that a customer has placed the order online. The rep is also notified electronically, even if a customer requests a price on an item via the Web site.

Airgas officials would not address specific sales figures for online purchases, with Max saying, "I'd prefer to stay away from mentioning actual sales volumes via the site." But he does say that "we have about 2,000 customers per month who go there to get account-specific information."

Offline influence

"The primary thing they're doing is just browsing the catalog. A much smaller percentage places their order online," he explains. "We've done studies, though, that show the [online] catalog is influencing off-line sales"

While Airgas strives to upgrade its site, company officials agree that theirs is a business and profession that, by its nature, can only go "so far" with the Internet.

"There's always going to be a part of our business that will require that phone call," Max says. "People ordering specialty parts they've never ordered before will get on the phone rather than place those orders online."

Feldkamp agrees and cites other factors to explain why even the best of Web sites can't do it all. In addition to product support or the purchasing of large machines, she also suggests that volume-buying customers have the right to expect personal contact and that the phone call will continue to be an effective means of conducting business.

"If I'm a bigger account, I'll want to talk directly to someone. Within our industry, we have people who expect direct support when buying new products and regarding a service standpoint from their distribution. There's just an expectation level there," she says.

Ely agrees, adding another consideration unique to the Airgas success.

"Our products are very specialized, and it's a very branch-based business," explains Ely. "It's not that those doing research on welding equipment or gases ... will use the Web site exclusively. They will also rely on an outside sales rep or branch manger because, in many cases, certain gases need to be distributed through the branch based system. All of the channels work together."

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