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Nov 06

Q&A with Affiliated Distributors: Industrial distributors must build e‑commerce

For 35 years Affiliated Distributors Inc. has helped independent industrial distributors that collectively do $38 billion in annual sales do a better job of building and keeping their respective businesses viable.

Now to help its more than 500 community members—in industries that range from bearings and power transmission, building materials, electrical products, and heating, ventilation, and air conditioning (HVAC) to pipes, valves and fittings (PVF), industrial, plumbing and decorative industries—continue to survive—and flourish—Affiliated Distributors is embarking on a high-profile, multi-year e-commerce initiative.

The task is complex and hardly easy. Some industrial distributors need lots of help just getting started with e-commerce, while other distributors need aid in taking their respective B2B strategies and websites to the next level.

In this QA report B2BecNews conducted in October, Caroline Ernst, vice president of eCommerce Solutions for Affiliated Distributors, discusses the organization’s new e-commerce initiative and why building a database of 3.8 million SKUs is a top priority for helping its industrial distributors get going online.

Q: Why is Affiliated Distributors making B2B e-commerce a priority?

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CarolineErnst_AffiliatedDistributors

Caroline Ernst

CE: E-commerce is the fastest-growing sales channel in today’s professional market, and AD has invested in the tools and resources to provide our members with access to rich product content, fully integrated web store options, and the support they need to make it happen.

AD eCommerce Solutions leverages AD’s scale and community to enable members to achieve their e-commerce objectives and win in an evolving digital world. AD’s size and scale allows us to buy SKU production capacity rather than a pay-per-SKU model.

Q: What are the top 5 strategic priorities for B2B e-commerce, and why these?

CE: Know your customers’ customer. A question we ask customers is what do you expect when you visit the distributor’s site?  The answer is typically to purchase a product, for self-service (request a quote, download an invoice) or for product discovery.

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  • Once you understand your customer’s intent, make it easy for them. It’s the buyer’s job to be on your site, so make the experience intuitive.
  • Product content should be accurate, enhanced and normalized. Marketing content should tell the brand’s story.
  • Measurable strategy. Ensure that you are tracking to measure your objectives. If your goal is to drive 10% of sales through the online channel, ensure that your analytics captures total sales, the number of items per order and average order value, among others. If your goal is enablement through 24/7 self-service, assign a value to each action such as for logins, live chat, and downloading an invoice.

Q: What is your time frame for rolling out your B2B initiatives? What’s first and what follows?

CE: Our program has three offerings:

  • Our collaborative financial investment enables us to deliver millions of SKUs of attributed data that members can acquire for pennies per SKUs rather than dollars. What makes our model unique is the involvement of our members and supplier partners as we consumerize the millions of SKUs. They are involved every step of the way, from defining taxonomy to providing feedback and improvements on product content.
  • Our WebStore services allow our members to get quickly up to speed with an e-commerce platform and integrate with a variety of enterprise applications including for seamless checkout, full account management capabilities, and the ability to offer promotions, deals and coupons, and be mobile-responsive for contractors on the go.
  • We provide the guidance our members need to craft an e-commerce strategy that fits their goals and their way of doing business. We can also help streamline their e-commerce workflow, integrating a member’s enterprise resource planning (ERP) software and their web store with our e-commerce platform. From training and digital content mapping to developing launch plans and a digital marketing strategy, we ensure that members start off strong and stay that way.

Future programs will depend on what our members want and need. All our programs come from requests for our members. We have built a solid foundation and are ready to take on whatever our distributors need in the future.

Q: You are building a universal database of 3.8 million products as one of your core building blocks for B2B e-commerce. What will this database do for e-commerce and why is it needed?

CE:  Our collaborative financial investment enables us to deliver millions of SKUs of attributed data, so that AD members can acquire SKUs for pennies rather than dollars.

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Q: What are your top challenges in developing a comprehensive e-commerce program for 500 members representing 3,800 branches across multiple industries with combined annual sales of $37 billion?

CE: Creating a digital branch requires different ways of doing business. Our customers, the distributors, are in various points in their e-commerce journey. Our greatest challenge is to meet each of them where they are and move them forward to thrive and win in an evolving digital world.

Q: How are you overcoming these challenges?

CE: Our team has regular one-on-one meetings with each of our distributors to meet them where they are and help them into the next stage of their e-commerce journey.

Q: How far along with B2B e-commerce are your distributor members?

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CE: Our distributors’ e-commerce journey spans the spectrum from gaining executive buy-in and creating a digital strategy to driving 25% of total sales.

Q: You represent different industries ranging from bearings and power transmission, building materials, electrical and heating, ventilation, and air conditioning (HVAC) to pipes, valves and fittings (PVF), industrial, plumbing and decorative industries. That’s a diverse mix. How are you developing a B2B e-commerce program that may represent the unique needs of each vertical?

CE:  What makes our model unique is the involvement of our members and supplier partners as we consumerize the millions of SKUs. Our volunteer leadership within each AD division are involved every step of the way, from defining taxonomy to providing feedback and improvements on product content. While we leverage our size and scale to keep the program affordable, we respect divisional differences and follow the lead of our members to ensure deliverables match their needs.

Q: Where do you expect your B2B e-commerce program to be in one year and in five years?

CE: The program will continue to grow to meet members’ evolving digital needs. In the last three years we have built a 3.8 million product database with data for an easy customer experience. We will build on this foundation to add new products and update pricing and add digital assets to active products.  Once the foundation is built and more automated, we can expand beyond foundational content to add greater value to members’ digital experience.

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Q: Are all AD distributors and manufacturer suppliers participating in the new e-commerce?

CE: Most of our distributors and suppliers are participating in e-commerce in one way or another. E-commerce is a crucial part of strategies.

Q: How many are resisting and how are you encouraging them to get involved?

CE: Our program isn’t for everybody, and that is OK. We do encourage all of our community to get involved. We host monthly educational webinars and e-commerce is a regular topic at all our meetings.

Q: Is the e-commerce strategy leading to incremental sales for AD overall? Any figures?

CE: It is a bit early for us to have data on incremental sales.

Q: What kind of online marketing services/product launching assistance, is AD offering participants? Any results?

CE: We offer one-on-one support for each of our distributors to help them launch their digital branches and facilitate the best practice sharing among our members through online forums and at our annual e-commerce summit. So many of our members are doing lots of innovative marketing strategies and it is invaluable for them to learn from each other. We also host monthly webinars that cover topics that range from email marketing to matching and mapping content.

Q: Will there be a portal? If so can, participants customize web features for their customers?

CE: While our content is platform-agnostic, we leverage our scale to offer pre-negotiated Unilog CIMM2 platforms to our members. Our members have complete control over the web features that are of importance to them.

Q: Are there particular online applications like product configurators or how-to videos helping to drive sales?

CE: Creating efficient buying experiences is the top priority for our members’ digital branches, that can include saved lists, requesting a quote, product comparisons, product videos, invoice management, custom pricing, and easy-to-find products.

Q: How is e-commerce helping distributors stay relevant and connected with customers and market demand data as manufacturers go more direct to customers?

CE: Independent distributors already have a competitive advantage in product expertise, customer intimacy, and creative supply chain solutions. Having a digital branch allows end users that want to transact online to do so, without forfeiting the trusted relationships they have with their independent distributors.

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