We talk a lot about digital transformation here at MDM and how the extremely fragmented wholesale distribution sector is full of companies at all different stages of that journey. That makes case studies very valuable for fellow distributors looking to see how others — including competitors — handled their digital journey and what they learned along the way.

At AD’s eCommerce & Marketing Summit Dec. 5-7 in San Diego, there was a great case study that I want to share with our audience.

One of the event’s “Digital Leaders” track sessions was a presentation from Brandon Day, Vice President of Products, Services and Marketing at Werner Electric Supply, about his company’s four-year digital evolution that it began in 2018. Day joined the Appleton, Wisconsin-based electrical products distributor in January 2019 after spending the previous 22 years at Rockwell Automation, most recently as its Director of North American Marketing.

Before I dive into that case study, let’s cover some background about Werner.

Day told the AD session audience that Werner was looking to be a $45- million-revenue business at the end of 2022. That would place it barely outside of MDM’s 2022 list of the 25 largest distributors of electrical products, which was based on 2021 revenue.

In business since 1948, Werner has 11 branch locations — 10 throughout eastern and central Wisconsin and one in Michigan’s Upper Peninsula along the Wisconsin border (Iron Mountain). In the summer of 2016, Werner opened its 200,000-square-foot distribution center that serves as the center of the company’s hub-and-spoke physical footprint, which is backed by approximately 450 employees.

About 60% of Werner’s customer base is original equipment manufacturers, primarily consisting of food & beverage and pulp & paper makers in Wisconsin. The other 40% is end users, primarily in the construction and industrial markets.

How it Used to Be

Day explained that, before he started with Werner in 2019, the distributor already had great brand recognition, strong relationships in the marketplace, excellent support and a reputation for its physical content — catalogs, brochures, flyers, etc. The company held well-attended events and customer parties. He noted all of that was the company’s strengths in the 1990s and early 2000s.

“To their credit, that is how Werner Electric Supply built their brand,” Day said. “That’s how customers wanted to engage us. They wanted to come see Werner, and they wanted Werner to come see them. They wanted hard copies of fliers or CD-ROMs and USB drives and all those different types of content delivery mechanisms. And we did a really nice job in that.”

When Day joined the company, the way customers engaged with Werner and its content had already begun shifting at different speeds for different customer segments. Like all distributors have seen, much of that behavior became aligned with what consumers experience in the marketplace as a greater movement toward digital experiences.

“As we began our evolution and recognition that this change was happening, we had to figure out: How do you validate that there is change occurring?” Day said. “You want to ask the customers.” 

So, Werner did a tremendous amount of customer outreach between its account managers and product managers asking questions and its marketing team spending considerable time doing “Voice of the Customer” activities to understand what customers wanted and how they wanted it.

Day explained that Werner’s account managers reported back that customers were telling them the following about the company’s website:

• “Your website isn’t what it needs to be.”
• “It’s not easy to use.”
• “I can’t find everything I want to find.”
• “The part numbers don’t match.”
• “Where’s my pricing? That’s not my pricing.”
• “I want to log in, how do I get a login?”

Sound familiar? Day noted it’s likely that other distributors in the audience likely have heard those same requests at an increasing rate.

Creating Demand

Out of that customer feedback, Day said Werner’s leadership team began stressing to the marketing team the theme of creating demand to generate revenue, and creating that demand in different ways. That included making the company’s events much more efficient at gathering customer information, rather than primarily serving as a fun time where swag was given away. Getting return on investment for those events was key.

Internally, Werner started to hear and be asked more of these questions of “What is your ROI? What are we getting back? What revenue are we generating?” 

“That was requiring us to look at ourselves and look at the value that we’re providing to the customer or to our organization differently,” Day said. “That got us to say, ‘Okay, we’ve got to draw a line in the sand. We got to really look at what becoming digitally-enabled means.’”

Day explained that this began with defining Werner’s mission and vision. The following is what the company’s leadership team established three or four years ago, according to Day:

• Werner’s Mission: Unwavering commitment to our customers, families, communities and each other.
• Werner’s Vision: Relentless pursuit of exceptional customer experiences.

Having those in place is something Day advised to everyone in the room.

“It was really our North Star,” Day said. “It was so helpful to have these both during the pandemic and currently during the supply chain challenges because we can go back to this as an organization as team members and look at our mission and vision. This is really critical. If your organization doesn’t have this, spend the time and the energy to do it.”

But beyond that, Day explained that, amid the evolution of digital avenues, Werner also needed to create a digital mission and vision for the company’s North Star, especially for its marketing team. It needed those in order to express to the rest of the organization what it is doing as a commerce or digital team.

So, Werner came up with the following digital mission and vision:

• Werner’s Digital Mission: Provide an exceptional customer experience.
• Werner’s Digital Vision: Become a digitally-capable, information-gathering, demand-creating, revenue-generating contributor to Werner Electric Supply.

What Does Digital Success Look Like?

Day acknowledged Werner’s digital mission may sound overly-simplistic, but providing an exceptional customer experience is indeed the core role of the company’s marketing team. The digital vision is much more nuanced. That vision involves a lot of time, energy and education.

A key component to that digital vision is determining what the proper milestones and measurements are, and what the strategy is to get there.

So, Werner started asking itself a bunch of questions and evaluating a lot of different things. First and foremost was defining customer experience success, and the only way to do that was to gather more customer insights, along with internal assessment.

“The hardest thing I had to do as a leader was to take a step back and assess the current skill set of our marketing team,” Day shared. “You have a marketing team that for years did a tremendous job, but did it serving a specific customer, and the electrical distribution industry that was changing, and we too needed to change.”

This involved evaluating the company’s marketing roles at the time and the people in those roles to determine if the right people were in the right place to match Werner’s digital mission and vision.

“It’s not easy to do for any company,” Day said. “So we went through that and we ended up making changes. And I can tell you now, when you’re in it, it’s very hard to do. And then when you’re through it, you say thank you every day that we went through it, and you bring on great people who enable you to achieve your mission and your vision.” 

Besides getting the right people in the right place, Werner evaluated its partnerships and technology, and determined some of them likewise weren’t the right match for the path forward. That meant some migrations and upgrades were necessary, which always brings a challenge of resources.

Day echoed the plight of business departments everywhere: “We only have so many people and so much time and we’re only given so much money and it’s never enough.”

Instead of trying to tackle everything at once, Werner scheduled out those initiatives, which continue today.

The first step was formulating a content strategy for transitioning the company’s immense physical content library into a digital format.

“What does that mean? Is it now just on the web? Is it now posted via social media? Does that mean that we’re doing videos? Are we doing webinars? And what’s the thematic consistency of Warner electric supply in that digital content space?” Day recounted. “We had to ask those questions and determine what that content strategy was going to be.”

In lockstep with that was formulating a data strategy. Day noted Werner didn’t have a structured data strategy when he joined the company, which was still asking questions of where it could acquire data and who or what was providing it, and taking what it could get and filling in the blanks later.

“It’s all about the data,” Day emphasized. “That’s one of the foundational elements you have to understand. Define a data strategy, your data sources and make sure you have automation. You have to have automation around your data management.” 

The Omnichannel Experience

To accomplish its digital strategy, Werner set out to create an omnichannel experience for its customers — something many distributors are still in the early stages of. The number of channels involved will vary from company to company, but Werner chose five to focus on:

• Word of Mouth/Brand Recognition
• Brick-and-Mortar Stores
• eCommerce Website
• Online Marketplace
• Social Networks

The first two there were already solidly in place before Werner’s digital evolution began in earnest, so the company directed most of its investments in technology, content and skill sets toward its eCommerce, marketplace and social media strategies.

“That’s where our investments are — in technology and content in resources, skill sets,” Day said. “That’s where we chose to focus. We see the online marketplace. We know we need to go there. I’m still trying to figure out what that definition of an online marketplace is for our customers and what that means for us. It’s part of the omnichannel experience, and we need to be able to provide that in order to get there.”

Data Management

With any digital evolution or transformation, the management of data is paramount. It’s one thing to collect a ton of data, but it doesn’t mean much if it’s housed in disparate locations and without a process for putting it to use.

Day noted that, four years ago, Werner was gathering data from a lot of different places — including its ERP, advisory partners, major suppliers and its own marketing efforts — and without automation tools in place, it created opportunities for mistakes and its overall maintenance was a slow process.

Part of that data evolution for Werner was implementing taxonomy from its key strategy partner — AD in this case — into its ERP system.

“If you don’t have a taxonomy in place that you’re managing and have worked with your product management and your finance teams on, you’ve got to do it,” Day advised. “We stopped a lot of different things when we found out we didn’t have the right taxonomy in place.”

Werner continues to implement that taxonomy today.

SKU governance is another data management process Werner prioritized in its digital evolution. Day stressed that implementing it is a cultural change for a distributor, but a vital one for achieving digital transformation and a desired omnichannel experience. Werner determined that it had to have governance over who can add and modify SKUs on a daily basis, with Day noting that many distributors are adding anywhere from 100 to 200 SKUs into their ERP every day, but that just a tiny fraction of them are ones actually shown on their website and represented to customers.

“We’re putting that governance in place,” Day said. “It’s going to upset the apple cart here for a little while, but we have to communicate to them (Werner team) as to what we’re doing, why we’re doing it and the improvement that they’ll see internally and externally for customers.”

Finally, utilizing automation tools for that data management has enabled Werner to reassign certain staff who were previously tasked with manually — and physically, in some cases — managing that data or content and deploying them somewhere else.

Measurements and Milestones, Not Endings

Day went on to emphasize the importance of establishing a digital roadmap and priorities as a means of having something to execute and evaluate against. This includes establishing the right measurements and milestones and communicating them to peers and stakeholders about how progress is being made. There isn’t necessarily an end state, as the customer experience is always moving, Day advised.

“What does ‘We’re perfect,’ ‘We’re done’ look like?” he asked, rhetorically. “I’ve never heard of one. If you’re there, I want your phone number. It never ends.”

At the same time, he added, continuous improvement should be the goal, which is why milestones and measurements are so vital. 

Day went on to show a chart illustrating Werner’s current marketing technology stack, breaking down all the different tech products it utilizes across different functions — advertising & promotion, content & experience, social & relationships, commerce & sales, data and management, as well as strategic partners.

“It’s very different than what it looked like four or five years ago,” Day explained. “We have a lot of different names, different partners and a lot more technologies today. We continually evaluate this technology stack and what we need. Are we utilizing all of the capabilities or optimizing the usage of these different technologies? Are there newer, better technologies? In some cases, who has bought who, and what does that mean for us? The management of this technology stack is always ongoing.”

Day showed a slide charting the metrics across numerous data points for Werner’s digital offerings, and it illustrated the considerable four-year growth made in annual online sales, website transaction volume; the percentage of total company sales via eCommerce; the number of customers with web accounts; and total clicks. It also showed metrics that weren’t even tracked in 2018, or at least not reliably — social media followers; website sessions; time spent in digital environments; configurator usage; and most researched content.

The Final Word

Early in his presentation, Day acknowledged that Werner’s digital evolution hasn’t been perfect or easy, and it certainly isn’t finished. Some of those implementation areas covered above are still a work in progress, but progress toward them is happening on a daily basis.

I think the AD audience appreciated that candor from Day and the insight from a non-billion-dollar distributor still in the midst of a digital evolution.

“Some of you are probably doing some things faster or differently or better than we are,” he said, then humoring, “and in that case, if I can get your name and phone number after this I’d like to learn and get that information from you.” 

He added that there are others who are just starting this journey and trying to understand where and how to begin. “It’s a big obstacle, a challenge and an opportunity for us all.”

He finished by emphasizing the five pillars of success that have carried Werner’s digital mission and vision through its four-year transformation to today: 

• Focus on the customer experience
• Organizational commitment to the change
• Find great partners
• Trends > Measurements, milestones – not endings
• Automate as much as possible

“Hopefully there’s a nugget or two in there are two of learning, or it’s an affirmation that what you’re doing is the right path,” Day concluded.