Jack Keough: Study Shows Importance Of E-commerce For Distributors

Distributors that establish a proper e-commerce site could see big benefits, according to a study by TNS, a global marketing research company, in conjunction with UPS.

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Distributors that establish a proper e-commerce site could see big benefits, according to a study by TNS, a global marketing research company, in conjunction with UPS.

The survey, based on the responses of more than 1,500 buyers of industrial supplies, showed that 63 percent of those purchasers had bought products online. Half of the respondents spend at least half of their annual budgets with suppliers that have an e-commerce platform.

Buyers say that more than half of their suppliers have an e-commerce presence. The study says the growing use of an e-commerce platform is changing the buyer-distributor relationship. Thirty-four percent of the respondents say they have gone outside of their traditional supplier base to make an online purchase with a new vendor.

“For suppliers, finding strategic ways to be in the right place at the right time is the key to strategic growth,” the report says.

The purchasing executives said, by a vast majority, their experience with vendors' e-commerce sites are the same (56 percent) or better (37 percent) than the consumer sites they use for personal purchases.

The good news for distributors is that buyers are satisfied with their distributors in all areas they consider most important in the supplier selection process.

While those results are positive for distributors who are in good standing with their customers, it also makes it more difficult for other distributors looking to expand their customer base.

Buyers point out several items that are important to them: product quality and availability, negotiated pricing, and shipping costs.

Even though industrial supply purchasers are embracing e-commerce, traditional purchasing capabilities are still important, along with best-in-class product quality, purchase visibility, and delivery speed.

Survey findings show B2B online purchasers still want access to traditional customer methods, such as catalogs and access to a sales representative. Post-sales support was particularly important to respondents, with 68 percent indicating they would be somewhat or much more likely to do business with a new supplier if their website featured post-sales service and support. In addition, 53 percent of buyers stated aspects of the returns process are important, such as including a pre-printed return shipping label with the original delivery.

The tile of the white paper/report is UPS purchasing insights: behaviors, preferences, perceptions of industrial supplier performance.

The importance of e-commerce for distributors can’t be overestimated. One distributor told me recently that he was forced to improve his e-commerce presence in order to comply conditions of a federal contract. If he didn’t, he was in danger of losing the account.

In Industrial Distribution’s latest Annual Survey of Distributor Operations, respondents clearly indicated the importance of going online. For example, the survey pointed out that 24 percent cited Internet sales as a primary growth strategy, compared to 18 percent a year ago.

Thirteen percent said they plan to “invest in a redesign,” compared to 10 percent last year.



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