For three years running now, lightED’s partner publication, tED magazine has been keeping distributors abreast on how Amazon Business has been treading, not so lightly, into the electrical distribution space, of which lighting occupies a significant chunk of real estate. Industry experts agree there is cause to be wary.
“The B2B Amazon business has seen increased growth,” says Justin King, Co-Founder of Digital Branch and B2X Partners, a leading B2B e-commerce consulting agency.
“More and more companies have contracts with Amazon. They continue to push into this space and there’s no reason to believe they’ll slow down.”
While Amazon’s foray into the lighting sector is cause for alarm, they still haven’t captured a critical corner of the market: knowledge. Amazon’s success is built around a curation model—they continually add new product; that attracts buyers; that attracts more sellers. And it all revolves around a great customer experience, which includes low cost and fast delivery. But as King points out, nowhere in Amazon’s vocabulary does the word “expertise” appear.
“That’s the lynchpin to the whole thing,” says Brian Rooney, Branch Manager for Crescent Electric. “The level of expertise and service that distributors provide that a company like Amazon isn’t willing to do.”
Service like, “managing inventories, two-day, free delivery. You have some distributors in Chicago who will deliver three times in a day,” says Rooney. “Take-offs, layouts for the company, integrating electrical systems, consulting on IoT; so much of what distributors are doing today, that’s what is really keeping us ahead.”
But to stay ahead, that knowledge has to be vividly showcased online, according to King. “Distributors already do that with their customers, on the phone or on the sales floor. It’s just about taking that knowledge out of your sales people’s heads, from your inside sales and customer service, and translating that online.”
King suggests a product content program, in which distributors create a process where they’re continually creating content for their e-commerce sites by writing better product descriptions, featuring better images, even producing short videos to demonstrate the company’s expertise. It doesn’t have to be an all or nothing endeavor. “You don’t have to do all 10,000 of your products. You start with 50. You can start with 10. Do 10 this month, 10 next month, that is absolutely doable.”
Escort Your Customer Through Your Store
At a time when Amazon is becoming the de facto search engine, as explained in a recent story on tEDmag.com, (studies show that 52 to 55 percent of people start their product searches on Amazon, versus just 28 percent for Google) distributors will have to make their e-commerce sites more than just a digital catalog. The distributor’s online platform needs to be a solution center, a virtual walk into your shop.
“Help your customer find the exact lighting they’re looking for,” adds King. “You can create videos or articles about how to use the products you sell, whether it’s residential lighting or industrial lighting. I cannot over-emphasize product data. A distributor should be able to write descriptions about which lighting to use and how it fits certain applications.”
“If you’ve got an e-commerce presence, opening your market so much wider can be a game changer,” adds Rooney with Crescent. “We are having a lot of success in e-commerce. Here at Crescent, we’ve done a lot of work with the e-commerce side, revamping our website, constantly working to improve it and it’s been huge for our business.”
When the Rubber Meets the Road
Beyond the online presence, there are some other innovations distributors might have to consider to come to parody with Amazon, like figuring out how to get product to customers faster and more efficiently. In Baltimore, where King lives, he can order something from Amazon and get it delivered to his door inside two hours. In some cases, distributors could do that too, with a little creative thinking.
“Bring on some 1099 drivers in your area, who will drive their own cars and can take a product from your warehouse to a customer’s site,” says King. “Amazon flex does it. This is something you can try out easily. Start with one driver, part-time, under a contract saying you’re not liable. Test out with two big customers and see how it goes.”
Get Buyers Where They Live
Online shopping is a reflex now, from fashion to food to industrial purchases.
But if distributors invest in a robust e-commerce presence, offer competitive prices and superior logistical support on some items and some locations, all backed up by knowledge which just might save the customer time, money and headaches—that’s the kind of value that can’t be bought by simply throwing another item in to the Amazon cart.
Tagged with Amazon, e-commerce, lightED