think outside the box - mdm · mdm 2014 e-commerce survey source: mdm research in collaboration...
TRANSCRIPT
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Future Leaders Council Webinar November 14, 2014
Think outside the box E-commerce as a growth strategy
Thomas P. Gale
President
Gale Media
© 2014 by Gale Media, Inc. All rights reserved. Material may not be reproduced in whole or in part in any form whatsoever without permission from the
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Speakers:
Thomas P. Gale
President
Gale Media
Eddie Morrison
IT Specialist
C.I. Thornburg Company
Download today’s presentation
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• Digital transformation
• Key concepts to build strategy
• Multi-channel: Learn from others
• Build a TCO/ROI analysis
• Q&A
Agenda: E-Commerce as a Growth Strategy
© 2014 Gale Media, Inc. All Rights Reserved.
Strategic planning
Connect the dots
10 years ago…
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…was a sound
…was a prison
…was a
parking place
…was a typo
…did not exist
…and applications were
what you submitted for a job
Source: Monitor Institute June 2014 report
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Current
conventional
customers
Connected
digital
customers
How to build a bridge?
Sell
Stock
Credit
Expertise
Service
Product
Two markets…two models
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E-commerce moving parts
Data
Content
Conversion
Mobile
Content Analytics
Personalization
Social Content marketing
Search
SEO
Paid/Organic SEM Stickiness
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E-commerce framework
MARKETING
DATA
FUNCTIONALITY
ANALYTICS
Platforms, devices, UX
Quality, taxonomy, content
Segmentation, positioning
Metrics, SEO/SEM, targeting
E-commerce transformation
© 2014 Gale Media, Inc. All Rights Reserved.
Type of Site Common Functions
Corporate website Public corporate information
Online catalog Browse products - Attract new customers
Online store B2C New customers – Purchase products
Online store B2B Existing customers – Purchase products
Customer portal Existing customers – Order, check status
Sales rep portal Quote, order, check status, configure
Customer Svc portal Order management, place order, check status
Marketing portal Manage & distribute product content
Punchout portal Enable customers to export orders to us
Source: Insite Software
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DRIVE
E-commerce framework
ENGAGE DELIVER
Market
• Convert
• Show up
• Sign up
• Review
• Share
• Buy
Customer
• Content
• Inform
• Motivate
• Dialogue
• Relationship
• Service
Sell
• Product +
• Experience
• Sales
• Service
• Efficiency
–Multi-channel • Branch
• Catalog
• Relationships
• Digital platforms
• Call centers
– Integrated functions: Market, sell, service, order
– Convergence: Industrial > Retail > E-tail
E-commerce framework
© 2014 Gale Media, Inc. All Rights Reserved.
E-commerce evaluation
© 2014 Gale Media, Inc. All Rights Reserved.
Source: Codifyd
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!
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Amazon Effect
September 2013 January 2014 June 2014
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Increasing customer expectations
– Convenience, transparency, loyalty
• E-commerce functionality
• Ease of ordering
• Fulfillment infrastructure
• Speed of delivery
Amazon Effect: The facts
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1900 Sears catalog
THIS BOOK
Tells just what your storekeeper at
home pays for everything he buys
and will prevent him from
overcharging you on anything you buy
from him
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Pricing visibility, alternate channels have been
around for more than 100 years!
1900 Sears catalog
Amazon Effect
• Relationship with key customer segments
• Strong multi-channel tools
• Time: Battle of titans
• Strategic market position • Knowledge, expertise, added value
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What is your advantage?
MDM 2014 E-commerce survey
Source: MDM Research in collaboration with Real Results Marketing
% of U.S. distribution companies with
e-commerce 10-20% of total revenues
will more than double in 2014
16% market by email daily
35% use Search Engine Marketing daily
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E-commerce evaluation
© 2014 Gale Media, Inc. All Rights Reserved.
Source: Codifyd
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%
• E-commerce channel
growth is 2X the rest
of the business
• E-commerce is the
“glue” that holds its
multi-channel
approach together
Learn: Grainger
Source: 2014 Grainger Factbook 20
• Online sales = $3B+ (33% of 2013 sales)
• Spanish language site
• More mobile – traffic more than doubled
• 30% of mobile orders picked up at branch
• Print catalogs reduced 20% in 2014
• 300 IT/E-commerce hires planned
Learn: Grainger
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Netsuite / IPad / Bakken Oil Boom • 6+ months for
building permits
• Job sites are
remote/dispersed
• Solve problems,
build relationships
Learn: New Models
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Learn: Wolseley
• B2B/B2C is 15% of total U.S. sales
• 9%+ of U.S. B-to-B business via e-commerce
• 30 people converting customers to online
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Learn: Motion Industries
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Learn: Motion Industries on YouTube
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Learn: Motion Industries – MiHow2 (YouTube)
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Leading distributors: Applied Industrial Technologies
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Learn: Applied Industrial Technologies
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• Economic value analysis
• Key metrics
• Marketing lift
• Average order value, frequency
• Productivity
• Cost reduction
• Customer retention
ROI & TCO analysis
Source: Real Results Marketing. www.realresultsmarketing.com
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ROI & TCO analysis
Source: Real Results Marketing. www.realresultsmarketing.com
Solution Annual ROI (after tax) Payback period (years) Net present value (NPV) Annual TCO Annual Benefit
High 130% 1.90 $1,322,574 $428,000 $1,190,000 Medium 130% 2.10 $1,016,600 $334,000 $935,000 Low 111% 2.33 $746,096 $282,000 $748,000
Assumptions Value
All government taxes 35%
Cost of capital 15%
Depreciation cycle 5
Reduction in cost per order $50
Average order value $400
Gross margin % 30%
Revenue TTM $40,000,000
Number of SKU's 50,000
Number of customers 20,000
• Focus on data and content quality
• Hold onto core strengths
• Communicate your value
• Let your customers embrace you… digitally
• Do something & prioritize!
Transition: Drive, Engage, Deliver
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Thomas P. Gale President
Gale Media/Industrial Market Information
Publisher, Modern Distribution Management
303-440-3857
www.mdm.com @mdmnews
www.imidata.com https://www.youtube.com/user/jenatmdm
Thank you
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