Corporate customers now seek an online experience similar to the business-to-consumer model, and distributors must adapt their e-commerce approach accordingly if they hope to increase conversion rates and customer retention. Michael Nagrant, principal consultant, Codifyd Inc., details why this is important and how it can be achieved in the recent MDM Webcast, 7 Key Investments Distributors Should Make to Grow Online Revenue.
This article is an exclusive summary of the webcast, which is available on-demand and on DVD at mdm.com/7Investments.
Amazon and Target have revolutionized the online shopping experience by creating websites that make it easy for consumers to search, select and pay for a product. And while distributors don’t compete directly with such retail giants, their impact on e-commerce has spread beyond the business-to-consumer market and is influencing all purchasing – even in wholesale distribution.
“People now expect that level of online service in the B2B world,” says Michael Nagrant, principal consultant, Codifyd Inc., who was featured in the recent MDM Webcast, 7 Key Investments Distributors Should Make to Grow Online Revenue.
Achieving that level of service is imperative for any distributor looking to grow online revenue, Nagrant says. According to the Acquity Group 2013 State of B2B Procurement Study, 71 percent of corporate buyers would purchase more products online if it were easier and more convenient to browse and buy from a distributor’s website.
The trend of corporate buyers increasing their e-commerce purchasing means a static website – for example, one that contains only a PDF catalog – will stifle growth. With a few targeted investments, any company – even companies that have survived for generations following traditional sales process – can boost online revenue, which, in turn, will boost the overall bottom line, according to Nagrant.
“Online revenue is a cheaper transaction for your organization relative to inside sales,” Nagrant says. “That’s not to say that those things shouldn’t go hand in hand, but there’s a great opportunity for you to earn higher margins in your business and more revenue as you move online.”
Nagrant advises that distributors focus their investment in seven key areas for the greatest impact.
The first investment companies must make – if they hope to emulate successful online B2C providers – is product categorization, or taxonomy. Nagrant says clear product categories make it easy for customers to locate the right product quickly.
“If they can find it, they can buy it,” says Nagrant, who advises companies to organize products using one principle such as product type, characteristic or application, but never mixing them, which can cause confusion and send a customer elsewhere.
The next investment is improving product characteristics, or its attributes and values. Creating rules makes product listings consistent, complete and easy to understand, allowing a customer to compare them meaningfully while shopping.
Product data gathering helps a website achieve consistency by making products look like they came from one supplier instead of many. Two options exist in this category: Establish a vendor portal for suppliers to send the data or acquire it yourself through vendor relations.
Next is data normalization, which creates uniformity of data, helping a company “gain competitive advantage by taking data from the marketplace and level-setting it so customers aren’t confused,” Nagrant says. For example, make sure a word like “amperage” is written consistently on all product descriptions – either as “AMP,” “A M P” or “amperage.”
Merchandising through product images and copy means including product pictures as well as charts that aid decision-making and give customers a clear idea of what they are buying.
For example, a website that shows its inventory by presenting clear images of each shape, style and size, increases confidence in selecting the right product and increases the likelihood of a purchase, compared to a website that only uses words to describe the characteristics.
The next investment is establishing a single source of truth, or mutually exclusive and consistent product categories.
The last investment is improved keyword search functionality on the company’s website, helping funnel users to the right place every time and, once again, providing ease and convenience for their product search.
The payoff, Nagrant says, is a return on investment that every distributor seeks. “Distributors must focus on product content to increase conversion rates and customer retention.”
Access the MDM Webcast, 7 Key Investments Distributors Should Make to Grow Online Revenue, on-demand at mdm.com/7Investments.