Download handouts (PDF) :
www.mdm.com/slides
or [email protected]
2014 STATE OF E-COMMERCE IN
DISTRIBUTION
Featuring: Jonathan Bein, Ranga Bodla and Tom Gale
March 20, 2014
Produced by:
Event Sponsor:
1
Download handouts (PDF) :
www.mdm.com/slides
or [email protected]
Speakers:
Jonathan Bein
Senior Partner
Real Results Marketing
Ranga Bodla
Director of Industry Marketing
Netsuite
Tom Gale
Publisher
Modern Distribution Management
Event Sponsor:
Download handouts (PDF) :
www.mdm.com/slides
or [email protected]
Agenda:
•
Introduction – Tom Gale (10 Minutes)
•
Presentation – Jonathan Bein (30 Minutes)
•
Presentation – Ranga Bodla (10 Minutes)
•
Q&A – Everyone (10 Minutes)
Event Sponsor:
The State of Distribution
E-Commerce 2014
5
Summary
•
•
•
Real Results Marketing conducted an electronic survey of 465 participants
to better understand trends in e-commerce.
This survey was conducted with Modern Distribution Management in
February 2014.
Key trends:
– E-commerce revenue as a percent of overall revenue is rising rapidly
– Key objectives are acquiring new customers, growing wallet share with
existing customers, and improving website usability
– Grainger is overwhelmingly considered the best website by other
distributors
– Respondents express mixed satisfaction with much of the functionality
on their own e-commerce sites
– Mobile technology for e-commerce is being deployed rapidly.
– Catalogs are considered to be highly effective for generating ecommerce revenue.
6
Best Competitor Website
• Overwhelmingly, Grainger is named by
competitors as having the best website.
• McMaster-Carr was a distant second.
• Nobody else was even close.
Best Competitor Website
• Overwhelmingly, Grainger is named by
competitors as having the best website.
• McMaster-Carr was a distant second.
• Nobody else was even close.
.....Grainger just added several hundred
people to its e-commerce initiative
Overview
•
•
•
•
•
•
Revenue and growth
Priorities
Capabilities
Marketing
Data
Operations
9
REVENUE AND GROWTH
10
E-Commerce Revenue – 2012-2014
• 2013 - Increase of nascent and
growth stage companies
• 2014 (projected)
• More than 20% increase in
growth stage companies
• More than double number of
mature companies
Definition
• Nascent – less than 5% e-commerce revenue
• Growth – 5% to 10% e-commerce revenue
• Mature – 10% or more e-commerce revenue
11
E-Commerce Revenue – 2013-2014
• A significant number expect to increase their ecommerce revenue
• Only a small percentage expects their ecommerce revenue to decline in 2014.
12
PRIORITIES
13
Top Priority
Top priorities are
• New customers
• Existing customers
• Ease of use
Priorities reflect the
nascent and growth
stage e-commerce in
where the first priority
is to get revenue
flowing with a usable
web site.
14
E-commerce Leadership
Among respondents with
nascent stage e-commerce
programs, only half have
dedicated leadership vs.
70% who in growth or
mature stage.
15
CAPABILITIES
16
E-Commerce Capabilities
Respondents are only satisfied
with the table-stakes
functionality (contact
information and basic search.)
For only slightly more complex
functionality (stock levels,
technical information, social
media), there is mixed
satisfaction.
For advanced capabilities
(quote, live chat, and purchase
suggestions), satisfaction is
low.
17
E-Commerce Capabilities
Respondents have high
satisfaction with login and
order placement.
They have mixed
satisfaction will all of the
other capabilities.
18
Mobile Capabilities
Support for mobile
technology has grown
nearly 25% from last year
including:
• Smart phones
• .mobi implementations
• Mobile apps
Still, more than 30%
intend to implement
support for mobile
technologies in the next
year and beyond.
19
Integration Capabilities
Smaller distributors are less likely
to rely on EDI or punch-out as
part of their e-commerce solution.
The emphasis on EDI and punchout has diminished from last year.
20
MARKETING
21
Driving E-Commerce Demand
• Email marketing, catalog and SEO are most effective and highest spend
• Paid search has low effectiveness
• Marketing automation is underutilized in distribution relative to other
industries
22
E-commerce and Catalog Synergy
• 85 percent of companies with a successful catalog believe that ecommerce and catalog are synergistic or that their catalog helps
drive e-commerce sales.
• 73 percent of companies who have a mature e-commerce channel
believe that e-commerce and catalog are synergistic or that their
catalog helps drive e-commerce sales.
• The three distributors (Grainger, MSC Industrial Supply and
McMaster-Carr) who were considered by their peers in a previous
survey survey to have the best websites were also considered by
their peers to have the best catalogs.
23
E-commerce and Catalog Synergy
• Product information management
• Brand
• Sales
24
Simple Techniques for Driving E-commerce
Demand with Catalog
• Reference other product options available online - e.g.
“See our website for 100s more options”
25
Simple Techniques for Driving E-commerce
Demand with Catalog
• Reference other product options available online - e.g.
“See our website for 100s more options”
• Place e-commerce URL on all catalog pages
26
Simple Techniques for Driving E-commerce
Demand with Catalog
• Reference other product options available online - e.g.
“See our website for 100s more options”
• Place e-commerce URL on all catalog pages
• Mention online tools
– Order tracking
– Shipping charges
27
Simple Techniques for Driving E-commerce
Demand with Catalog
• Reference other product options available online - e.g.
“See our website for 100s more options”
• Place e-commerce URL on all catalog pages
• Mention online tools
– Order tracking
– Shipping charges
• Selectively reference videos, training,
configuration/sizing tools
28
Simple Techniques for Driving E-commerce
Demand with Catalog
• Reference other product options available online - e.g.
“See our website for 100s more options”
• Place e-commerce URL on all catalog pages
• Mention online tools
– Order tracking
– Shipping charges
• Selectively reference videos, training,
configuration/sizing tools
• Promote mobile options, e.g. “On the road? – use our
convenient mobile ordering”
29
Marketing Automation and Email
Marketing
Many distributors use email
marketing to promote products,
special and branch events.
There is limited awareness among
distributors about marketing
automation and how it differs
from email marketing.
30
Marketing Automation Example
No response?
Wait
3
Days
Clicks
Link
Send
Newsletter
Newsletter
Invite Email
Opens
Email
Invite to Private
Demo
Send Exclusive
Webinar Invite
Send Whitepaper
Message
Email Service Provider vs.
Marketing Automation
Marketing Automation ROI
•
Businesses that use marketing automation to nurture prospects experience
a 451% increase in qualified leads. In turn, nurtured leads make 47% larger
purchases than non-nurtured leads. (The Annuitas Group, Nov 2012)
33
Marketing Automation ROI
•
•
Businesses that use marketing automation to nurture prospects experience
a 451% increase in qualified leads. In turn, nurtured leads make 47% larger
purchases than non-nurtured leads. (The Annuitas Group, Nov 2012)
79% of top-performing companies have been using marketing automation
for more than two years, with 79% of CMOs indicating “increasing revenue”
as the most compelling reason for adoption, followed by “higher quality
leads” at 76%. (Gleanster, Aug 2013)
34
Marketing Automation ROI
•
•
•
Businesses that use marketing automation to nurture prospects experience
a 451% increase in qualified leads. In turn, nurtured leads make 47% larger
purchases than non-nurtured leads. (The Annuitas Group, Nov 2012)
79% of top-performing companies have been using marketing automation
for more than two years, with 79% of CMOs indicating “increasing revenue”
as the most compelling reason for adoption, followed by “higher quality
leads” at 76%. (Gleanster, Aug 2013)
78% of successful marketers cite marketing automation as being most
responsible for improving revenue contribution. (The Lenskold and Pedowitz
Groups, Nov 2013)
35
Marketing Automation ROI
•
•
•
•
Businesses that use marketing automation to nurture prospects experience
a 451% increase in qualified leads. In turn, nurtured leads make 47% larger
purchases than non-nurtured leads. (The Annuitas Group, Nov 2012)
79% of top-performing companies have been using marketing automation
for more than two years, with 79% of CMOs indicating “increasing revenue”
as the most compelling reason for adoption, followed by “higher quality
leads” at 76%. (Gleanster, Aug 2013)
78% of successful marketers cite marketing automation as being most
responsible for improving revenue contribution. (The Lenskold and Pedowitz
Groups, Nov 2013)
Companies that deploy marketing automation see (Aberdeen Group, June
2012)
–
–
–
–
107% better lead conversion rates
40% greater average deal sizes
20% higher team attainment of quota
17% better forecast accuracy
36
Search Marketing
Many distributors start with
search marketing as the primary
or only means to drive traffic and
generate demand.
Yet, only half of respondents
consider search marketing
effective for customer acquisition.
37
Web Design
Select the choice that best describes how your company
developed its web design
25%
20%
Respondents in a 2013 survey
are less likely to do the design
all in house or all with a third
party than in 2012.
Companies with more than
$100M revenue are more likely
to do the design in house.
15%
There is very low satisfaction
among distributors regarding
their web design.
10%
5%
0%
Mostly done with a
Even balance
Almost all done in
third party with between in house
house
some in house and third party help
Mostly done in
house with some
third party help
Almost all done
with a third party
38
Not applicable
Marketing Best Practices
• Integrated multi-channel and multi-vehicle
practices provide the best results for
driving e-commerce demand including:
– Search marketing – organic and paid
– Traditional direct response vehicles – catalog
and direct mail
– Marketing automation and email marketing
39
DATA
40
Product Data
Select the choice that best describes how your
company gets product data.
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Almost entirely Mostly from the
from
manufacturers
manufacturers with some from
third party
sources
Even blend from
manufacturers
and from third
party sources
Mostly from Almost entirely Not applicable
third party
from third party
sources with
sources
some from
manufacturers
Product data accuracy and completeness are good for most distributors.
Photographs, substitutes and information about related products is weak.
Vast majority of data comes directly from the manufacturer. However, there is an
increasing role of pure third-party solutions or blended third-party solutions.
Other (please
specify)
Product Data Best Practices
• Analyze quality, time and cost of in-house and third-party
solutions.
• Normalize data from manufacturers including
manufacturer, part number, product category
• Enrich data by mapping the items to industry standard
templates and populating
• Cleanse and normalize long and short descriptions
• Get product images
• De-duplicate based on part numbers and attribute
descriptions
42
OPERATIONS
43
Operations
Fulfillment – slightly lower
satisfaction with warehouse
and inventory levels.
Quotation handling – big
concern with nearly 20%
unsatisfied.
Order handling – Good except
chat is underutilized.
44
Operations Best Practices
•
•
•
•
•
•
•
If showing inventory, have accurate and as up-to-date counts as possible.
Service level for web orders should be the same as any other channel.
Lead times should be displayed and must be as accurate as possible. If
using expected delivery dates, the same applies.
Provide chat services with the same support level as the inbound calls.
There should always be an order acknowledgement email and a shipment
email. The shipment email should include tracking information.
Develop a coherent inventory and fulfillment plan. Test the plan before
rollout.
Always provide easy to locate contact information for web support,
registration support, and quotation requests.
45
CONCLUSION
46
Conclusion
• E-commerce as part of a multi-channel offering
is here to stay
• Absence of viable e-commerce channel will
result in lost business, not just e-commerce
business
• Companies of all sizes need to make the
investment to be in market in 12 to 18 months
• The key is balancing build-buy
47
Thank you!
Jonathan Bein, Ph.D.
Managing Partner
[email protected]
www.realresultsmarketing.com
48
Who is NetSuite
Background
Performance
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Used by 20,000+ global organizations
Publicly traded on NYSE: “N”
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Offices in 10 countries
Top 10 highest growth ERP solution
according to Gartner and IDC
2,300+ employees
2013 revenue: $415M
#1 Cloud ERP Suite
NetSuite runs NetSuite
Powers Distribution
2014 STATE OF E-COMMERCE IN
DISTRIBUTION
Questions?
Download handouts (PDF) : www.mdm.com/slides or contact [email protected]
Produced by:
Event Sponsor:
53