7 key investments distributors should make to grow … · 2014. 10. 16. · seo-optimized landing...

Event Sponsor:

7 KEY INVESTMENTS DISTRIBUTORS SHOULD MAKE TO GROW ONLINE REVENUE

Produced by:

October 16, 2014

Featuring: Featuring Michael Nagrant, Principal Consultant, Codifyd Inc.

Download handouts (PDF) : www.mdm.com/slides

or [email protected]

http://www.mdm.com/slides

mailto:[email protected]

7 Investments Distributors Should Make to Grow Online Revenue

October 16, 2014

Confidential Property of Codifyd

Overview

• Introductions • The trends • The investments • The payoff


Presenters

Michael Nagrant, principal consultant, Codifyd Inc. Mike has over a decade of experience developing product content, search, merchandising, and data solutions for some of the leading distributors in the country. When Mike isn't generating e-commerce revenue growth for clients, he writes a weekly column as chief dining contributor for Chicago Tribune's RedEye newspaper.

Tom Gale, publisher, Modern Distribution Management Publisher of MDM and owner since 1993, Tom has researched and written on significant trends in independent distribution channels, including consolidation, integrated supply, e-commerce, vendor reduction, and shifts in value definitions.

About the Speaker:

About the Moderator:

The Trends


B2B Buyer Trends

• Corporate buyers are transitioning to online purchasing o 57% of buyers have participated in online purchasing o 50% of buyers with a budget of $500 million or more spend at least 90% of

their budget online • 37% of buyers expect to increase the budget they spend online

• Corporate buyers want an online experience similar to B2C o 71% of buyers would buy more products online if it were easier and more

convenient to browse and purchase products from a distributor’s website • Distributors must focus on product content to increase conversion

rates and customer retention

*Source: Acquity Group’s 2013 State of B2B Procurement Study


B2B Distributor Continuum

Static Website Line cards PDF catalog

1st Gen Web Storefront Exposed ERP data Exact part number searches Order history

Industry Leading Web Storefront Optimized Product Categorization Normalized product characteristics Faceted search Attribute ranking Search Thesaurus & redirects, tuning SEO-Optimized landing pages Rich content (images, charts, specs)

PIM/MDM – central source of truth

Online Revenue as a percentage of overall business

Customer Experience

2nd Gen Web Storefront Poor Product Categorization

Un-normalized data Missing images

Non-Existent Cumbersome Incomplete Fully Satisfied

25-60%

3-5%

1-2%

0%

The Investments

Investment #1

Product Categorization


Investment #1: Product Categorization Taxonomy


Investment #1: Product Categorization Taxonomy

Taxonomy is the practice and science of classification. Taxonomy is just a fancy name for categorizing things. There are all kind of taxonomies: • Science (kingdom, phylum, class, order, etc.) • Business (catalog indexes, e-commerce, sales reporting categories) • Humanities (Dewey Decimal System)


Investment #1: Product Categorization The Fundamentals

Clear product categories make it easy for customers to find your products fast. If they can find it they can buy it. Drive product findability:

• Organize products into distinct groups

• Let customers quickly navigate to the products they need

• Create landing pages

• Give customers a reliable keyword search experience

• Drive SEO

• Get more traffic from Google and Bing

• Create product filters

• Let customers choose according to size, material, or shape


Investment #1: Product Categorization Organize Products into Distinct Easy to Navigate Groups

77 Overwhelming Choices



Codifyd Optimization




Air & Drain Cocks Ball & Butterfly Valves Check Valves & Backflow Preventers Diaphragm Valves Float Valves & Watering Kits Flow Control Valves Gate & Globe Valves Hose Bibbs & Hydrants Plug & Needle Valves Pressure & Temperature Control Valves Saddle Clamps & Valves Solenoid Valves Special Function Valves Valve Accessories

14 Navigable Categories

Codifyd Optimization



Investment #1: Product Categorization Organize Products into Distinct Groups

• Organize your categories according to one principle

o Product type, characteristic, or application • Don’t mix principles!

o Avoid overlap


Investment #1: Product Categorization Example: Organize Products into Distinct Groups



These categories are organized by more than one principle:

Rating Product Characteristic Product Type Brand Price



These categories are organized by only one principle:

• Shoe type instead of brand, material, or color

o Consistent o Easy to understand

Investment #2

Product Characteristics


Investment #2: Product Characteristics The Defining Features of Your Products

Product Attribute Value

Screwdriver Drive Style Phillips

Tool Box Number of Drawers 5

Product characteristics are known as attributes & values:

Create rules for attributes & values to make them: • Consistent • Complete • Easy to understand


Investment #2: Product Characteristics Complete Characteristics Drive Sales

• Two floss products: one has information for flavor and type. The other product has no information.

• Customers can’t

meaningfully compare products without this structured information.


Investment #2: Product Characteristics Consistent Characteristics Drive Sales

• Say I’m a customer looking for a 15 amp circuit


Investment #2: Product Characteristics Consistent Characteristics Drive Sales

• Which 15 amp rating is the correct one?

• Inconsistency leads to duplicate characteristics o Customers won’t know where to look o Confusion leads to frustration o Frustration leads to site abandonment

• Say I’m a customer looking for a 15 amp circuit


Investment #2: Product Characteristics Consistent Characteristics Reduce Work for Internal Teams

• Without rules, your employees can enter any

information they want • Often confusing and un-normalized

o Difficult to maintain o Costly o Time consuming

• Create rules for who’s allowed to change data and what type of changes they can make


Investment #2: Product Characteristics Requirements for Product Characteristics

At a minimum, product characteristics require: • Clear names

o OAL or overall length? Lets customers quickly scan & understand product characteristics

• Consistency o HSS or high-speed steel?

Lets customers easily compare similar products • Completeness

o No missing characteristics Gives customers the information they need to make a purchase decision

Investment #3

Product Data Gathering


Investment #3: Product Data Gathering Create Consistency from Supplier Data

• The more suppliers to gather data from, the harder it is to create consistency • You must make data look like it came from only one supplier


Investment #3: Product Data Gathering Best Practices for Product Data Gathering

There are two choices: • Establish a vendor portal for suppliers to send you data • Acquire data yourself through vendor relations

Investment #4

Data Normalization


Investment #4: Data Normalization Once Data Is Gathered, It Must Fit into a Plan

• Normalization eliminates duplicate data • You are a premiere publisher, not a distributor • You gain competitive advantage by taking data from the marketplace and

level-setting it so customers aren’t confused


Investment #4: Data Normalization Once Data Is Gathered, It Must Fit into a Plan

• Similar products from different manufacturers have radically different data

• Pole is sometimes abbreviated as 2P or spelled out as 2 Pole

• Amperage is sometimes abbreviated as A or AMP with or without a space

• Descriptions don’t provide context or readability, e.g., what does 10K mean?

• Without normalization, search fails because results can’t be read and produced


Investment #4: Data Normalization Normalized Data = Better Content and Descriptions

When data is normalized, descriptions are clear and consistent: • General Electric Thermal Magnetic Q Line 2 Pole 120/240 Volt 100 Amp Common

Trip 10 Kiloamp Interrupting Rated Circuit Breaker • Siemens Q220 Line 2 Pole 120/240 Volt 20 Amp Common Trip 10 Kiloamp

Interrupting Rated Circuit Breaker


Investment #4: Data Normalization Normalized Data = Better Content and Descriptions

When data is normalized, descriptions are clear and consistent: • General Electric Thermal Magnetic Q Line 2 Pole 120/240 Volt 100 Amp Common

Trip 10 Kiloamp Interrupting Rated Circuit Breaker • Siemens Q220 Line 2 Pole 120/240 Volt 20 Amp Common Trip 10 Kiloamp

Interrupting Rated Circuit Breaker

This new parallel structure: • Lets site search algorithms crawl quickly and efficiently • Lets customers easily compare similar products • Lets outside search engines match more customer queries

Investment #5

Merchandising through Product Images & Copy


Investment #5: Merchandising through Product Images & Copy Images, Copy, and Selection Charts Are Integral

• Sales growth comes from novice/incidental customers • Consider the miracle of the megapixel

Complex or technical concepts can be easily explained


Investment #5: Merchandising through Product Images & Copy A List of Product Data Isn’t Enough

• Customers often purchase to solve a problem • The problem: I’m looking for the best sandpaper material to use on stainless

steel


Investment #5: Merchandising through Product Images & Copy A List of Product Data Isn’t Enough

Charts help customers choose the right product when several might be suitable


Investment #5: Merchandising through Product Images & Copy A Picture Is Worth a Thousand Words

Which is easier to understand? A list of words that describe shapes, or an image of the shape itself?

Investment #6

Establish a Single Source of Truth


Gold Product Content MAKE YOUR SINGLE SOURCE OF TRUTH GOLDEN

THE SUCCESS OR FAILURE OF YOUR E-COMMERCE EXPERIENCE IS DEPENDENT ON GOLD CONTENT

• Mutually exclusive and consistent product categories • Well-defined data model • Clean, normalized, consistent, and filled data • Supporting system of workflows and governance


Investment #6: A Single Source of Truth Downstream Systems Assume Gold Product Content & Data from a PIM

Channel Partners

Centralized • Normalized Optimized • Enriched

Gold Product Content

Downstream Systems

Omni-Commerce

Print Systems

MDM/PIM System


Investment #6: A Single Source of Truth What Happens if Content Isn’t Gold? (In Theory)

Poor Product Content

Channel Partners • Poor data sourcing • Missing product content • Ineffective product findability • Competitive disadvantage • Lost sales

Downstream Systems • Can’t support new product

introductions • Can’t manage supplier data • Can’t manage product lifecycle • Slow customer response • Poor data quality affects financials

Print Systems • Inaccurate catalogs • Errors in sales materials • Lost sales

Omni-Commerce • Poor e-commerce eexperience • Missing attributes • Inability to compete • Lost sales

MDM/PIM System

Investment #7

Keyword Search


Investment #7: Keyword Search

Many companies implement only the last

option

Start with a Great Algorithm


Investment #7: Keyword Search Start with a Great Algorithm

Funnel users into hand holding situations as often as possible

• Offer landing pages for broad searches o Keyword search for adhesives

• Offer product filtering for more specific searches o Keyword search for jobber length drill bits

• Offer intermediate landing pages for long-tail and mixed searches o Keyword search for purple threadlocker

• Direct customers to product detail pages for specific products o Part numbers, brand names


Investment #7: Keyword Search Send Customers to Structured Landing Pages

On the left, a search for dishwasher returns a 10-page list of 310 products—very difficult to navigate. A better approach is to display a structured landing page with faceted search like the example on the right.


Investment #7: Keyword Search Account for Spacing and Punctuation Variants


Investment #7: Keyword Search Account for Plural Variants


Investment #7: Keyword Search Account for Spelling Variants

Search Term (Top 5) Total Unique Searches flouride varnish 187 flouride 99 flouride trays 90 flouride rinse 38 Total (all “flouride” misspellings) 1535


Investment #7: Keyword Search Account for Product Synonyms

On the left, a search for whirlpool tubs returns 7,568 products while jacuzzi returns 3,000+ products on the right. Because whirlpool and jacuzzi are synonyms, they should display similar product results.

The Payoff: ROI

THE RESULTS

THE SOLUTION

HEADQUARTERS PRODUCTS CUSTOMERS INDUSTRY

THE PROJECT

CREATE ONE HOME FOR SIMILAR PRODUCTS If a group of products share the same characteristics, put them in the same place on the website. This removes doubt about where to find products and builds trust with customers.

Similar products scattered in multiple places on the website confused and frustrated customers. Ineffective search presented them with hundreds of search result pages. Feeling overwhelmed, customers often gave up after just a few clicks.

CREATE A FACETED SEARCH EXPERIENCE Browsing by product material or size lets customers quickly filter through thousands of products fast. They can easily narrow down their selection and enjoy a custom shopping experience this way.

SEND CUSTOMERS TO THE SAME PLACE Customers who discover products through keyword search or the faceted navigation menu should land on the same webpage. This gives them a fast, consistent product findability experience.

Improve the online navigation and search experience to avoid losing sales.

Patterson Companies Inc. ST. PAUL, MN 280k 140k

Thirty-seven percent sales increase in

the burs and diamonds categories

Fifty percent reduction in time taken to

find products

Hundreds of duplicate product categories

removed for less long-term maintenance

HEALTH CARE DISTRIBUTION – DENTAL SUPPLIES

Less customer confusion about where

to find products

THE RESULTS

THE SOLUTION


THE PROJECT

CREATE AND DEFINE BEST PRACTICES Create a standardized, repeatable process for data, taxonomy, and schema that helps identify inaccuracies, waste, and technological shortcomings.

Incomplete product data and unorganized data models not only confused customers, they made it hard to quickly find and easily understand products. Frustrated, customers often abandoned their search and wandered to competitor websites.

THINK LIKE THE CUSTOMER Name products the way customers normally search for them. Use search engine and keyword data to make quick and effective decisions like whether to call a product a trash can or waste bin.

APPLY PRINCIPLES COMPANY-WIDE Apply the project results to other enterprise-wide initiatives to form a permanent data governance policy, process, and team.

Improve the online experience for its customers to increase web revenue.

RS Components OXFORD, ENGLAND 550k 1.6M

Twenty-five percent reduction in the overall cost of data ownership and maintenance

Improvements in customer experience resulting in increased

online revenue

Improved data security by reducing the number of employees who can change

product data from 150 to three

INDUSTRIAL DISTRIBUTION: ELECTRONIC COMPONENTS

THE RESULTS

THE SOLUTION


THE PROJECT

BUILD A FOUNDATION First decide what product attributes and values will be displayed online to customers. Perform rigorous product research, which leads to complete, robust content that drives conversion.

The lack of an efficient process for gathering and organizing content resulted in large volumes of complex content that was inconsistent and incomplete. It was taking several months to bring just a small number of new products to market.

CREATE RELATIONSHIPS Build a strategy for communicating with vendors and send a consistent message to them about the type, size, and format of content needed.

BE CONSISTENT Display the same terminology online to customers. This makes online shopping easier and faster, and it has a positive impact on keyword and faceted search.

Quickly bring new products to market to grow online sales.

Top 5 Industrial Distributor New York 1M 300k

Multimillion-dollar incremental

new product sales

Reduced time to market by eight weeks

Introduced thirty thousand new products

every three months and over two hundred

thousand new products over two years

INDUSTRIAL DISTRIBUTION - METALWORKING


In Summary

7 Investments Distributors Should Make to Grow Online Revenue • Product categorization • Product characteristics • Product data gathering • Data normalization • Product images and copy • Single source of truth: gold product content • Keyword search

• Payoff: ROI!


Questions?

Codifyd is the leading provider of product content solutions

TAKE CONTROL OF YOUR PRODUCT CONTENT


PHONE 312.243.1140

EMAIL [email protected]

HEADQUARTERS 800 W. Huron St. Suite 200 Chicago, IL 60642

U.K. OFFICE 2nd Floor, Allens Yard 46 High Street Market Harborough Leicestershire, LE16 7AF United Kingdom

Event Sponsor:

7 KEY INVESTMENTS DISTRIBUTORS SHOULD MAKE TO GROW ONLINE REVENUE

Produced by:

October 16, 2014

Download handouts (PDF) : www.mdm.com/slides or [email protected]

http://www.mdm.com/slides

mailto:[email protected]

7 key investments distributors should make to grow … · 2014. 10. 16. · seo-optimized landing...

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