New Report: eCommerce within the Construction and Industrial Markets, Part 1

Oct 31, 2017

The advent of Amazon Business has motivated many distributors to consider the implications of ecommerce, and make investments. To better understand the state of eCommerce within construction and industrial trades, Channel Marketing Group asked distributors for input on their own eCommerce initiatives, as well as how they see Amazon Business as a competitor. The research shows there is a ways to go. Here in Part 1, highlights from the report’s overall ecommerce findings. In Part 2: Amazon’s influence on eCommerce. Watch for Part 2 in a future issue of CEW.

Defining eCommerce

eCommerce has evolved to encompass any electronic method for conducting commerce. Some of this expanded definition may be attributed to Amazon. As companies felt they were competing with Amazon they sought to redefine their offering. More recently they are including vending machine sales (whose orders are transmitted electronically).

Respondents also indicated that these forms of “eCommerce” should be included in the definition:

• Customer portal
• emailed PDFs digitally entered into ERP
• converting a pdf to an order directly from customer to our system,
• FTP
• VMI (vendor managed inventory)
• Ariba, Hubwoo, etc.
• Cxml direct file transmission
What forms of ecommerce customers are using

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Who distributors are focusing their efforts on

For many reasons, 51% of survey respondents said that their eCommerce-enabled site is available only to their customers. New customer acquisition and selling to “occasional” customers is not the goal of most distributors’ sites nor can they cost-effectively pick and ship small orders for a profit.

This inward focus could be an Achilles Heel for distributors in competing with e-tailers / edistributors for discretionary business. However, the report acknowledges this is a business optimization choice for many companies.

How the survey was conducted

Channel Marketing Group sent the survey to distributors in the electrical, industrial supplies and contractor supply industries, as well as randomly to other distributors. These distributor contacts were reached through trade publications, ElectricalTrends and direct via email. The only inducement was a free copy of the report.

Slightly more than 230 distributors responded to the survey. Most provided input to all questions.

This research is designed to be informative and directional in nature. The authors recognize that every industry has its unique dynamics that is impacting distributor adoption as well as end-user adoption. The advent of Amazon Business has motivated many distributors to consider the implications of eCommerce and many have made investments. The research shows, there is a ways to go.

Find out more about the Channel Marketing Group report: www.electricaltrends.com/2017/10/distributor-perspective-of-state-of-ecommerce-research-report.html

Channel Marketing Group develops market share and growth strategies for manufacturers and distributors and develops market research. CMG’s specialty is the electrical industry. President David Gordon authors an electrical industry blog, www.electricaltrends.com. He can be reached at 919-488-8635 or dgordon@channelmkt.com.