Happy New Year! We wish readers a prosperous, healthy and happy 2018. If you were at the recent HARDI Annual Meeting you may have heard Alan Beaulieu speak. According to Beaulieu, “Many HARDI members will see their business slow in its rate of growth in late 2018 and into 2019, others will see a plateau and some may experience mild decline depending on where they are located. All can take advantage of this time by implementing changes in your business to prepare for 2020. Change takes time, effort, and the attention of leadership. The second half of 2018 and into 2019 will provide a great opportunity for improving efficiency, much-needed e-commerce efforts, new marketing plans, or a new location. Plan now because the time to implement will be here in a flash.”
We think, if you are not selling online, 2018 should be your year to get it done.
Webstores are on many wholesaler’s minds and getting lots of press coverage. Lots of pundits are giving advice on what to do, what not to do and who to buy what software from. Beware of pundits who have never actually been involved in creating a webstore for our industry. Having created a store for their spouse’s cupcake business is not the same as creating stores for our industry. Having watched someone do it, having surveyed 28 companies on their experience or, as they say in the commercial, having stayed in a Holiday Inn Express is also not the same as real experience. Yogi Berra used to say, “You can learn a lot by watching.” We agree but, still, we would never hire a pilot who had only ridden in a plane, a programmer who had only used a computer program or a heart surgeon who had only watched a video of the procedure. There is much to be learned in the doing and “devil details” that are a part of completing a project. Not that we have a corner on the market, but we create webstores for this industry and we also have some opinions.
Our thoughts on webstores
Conflicts of interest create issues: As consultants, we try to always disclose conflicts of interest or potential conflicts of interest. That’s when we have a relationship with one of the parties or when we may be impacted, good or bad, by a recommendation we are making. The client can then disqualify us, factor our recommendations with that knowledge or can choose to disregard our input entirely.
In this matter, we do have a conflict of interest. We have a product that we sell to wholesalers and, even with our best intensions, we have biases that will seep into our thoughts and opinions. Since we have been offering webstores to wholesalers longer than any of the other providers, our experience also gives us some depth in the topic that can help. You should factor this knowledge of our conflict of interest and our experience into your use of our recommendations.
Undisclosed conflicts of interest are not acceptable in our opinion: We know “cahooting” is not in Webster Dictionary, but one of the characters in the movie “The Whole Ten Yards” used it and we like it. It’s just a great sounding substitute for “in cahoots with.” When an advisor or consultant has a conflict of interest (is cahooting with a provider) that is not disclosed, we feel there is the potential for real ethical problems in their recommendations. For example, when a recommender is working for or has worked for a provider, any recommendations are suspect, even if unintended. The lack of disclosure makes such a situation less innocent and much more troubling. These problems can manifest themselves in both positive and negative recommendations. We think consultants and those making recommendations should explicitly disclose current and past relationships or sponsorships with any providers in the area they are discussing. Even more troubling would be situations where a commission or finder’s fee is paid to the recommender as there is a direct financial benefit that increases the potential for a bias.
Your webstore is not a technology project, it is a marketing project: Remember the prime objective is to sell more toilets, air conditioners or whatever you sell, profitably! That’s marketing. This is not a project to make use of the more current, buzz-word-du-jour technology. Technology is just a means to the end of selling more toilets so when the technology takes the lead in the discussion, you have it backwards. There is a big difference between a technical solution and a customer driven solution. We are not against leading edge technology, but it must always be in support of the prime objective of selling more stuff. We do resist bleeding edge technology because it often involves risks that make its use less prudent.
Don’t let your marketing team abdicate: Our industry is getting better, but we still hear the occasional marketing manager tell us that “my customers aren’t interested in buying online.” We translate that to them saying, “I am still uncomfortable with the internet and I am willing to lose a bunch of customers rather than getting up to speed.” We do not know of a segment of our industry that does not have customers who are interested in buying or, at least, gathering information online.
You can’t out–Amazon Amazon: It was a $135 billion company in 2016 with pockets that are deep like to China. Should you be concerned? In the short term, no. Long term, yes. We think you should focus on its mode of operation for now as it is shaping customer expectations for how the online shopping should be conducted. So, make buying easy, make problem resolution straight-forward, allow customers to use credit cards when they want to (we know you take a couple percent hit so build it into your pricing rather than force the customer to go elsewhere), provide the information they need to make a buying decision. We think you should also envy and emulate their operational efficiency. Few if any wholesalers can match their investment in warehouse operation, but we can work to get as efficient as possible.
Get your team ready: They need to be well-versed in the use of any technology you provide to your customers. Give your team the best odds of success by providing them a script to introduce the technology to their customers.
Do you want to be in the content creation business?: One more disclaimer, we are in the business and so we have an inherent bias.) Content creation and maintenance is a people-intensive, messy process if you are not too picky. (Many companies send their content creation off-shore because it is people-intensive. We do not. It makes a difference.) If you want really good content, it is really messy. It’s not that you can’t do it yourself. Just like you can make your own clothes, you can do it yourself. The question is: Is that where you want to invest your time and energy. There are two aspects to it: 1) Managing the “marketing strategy” part (the traditional product, place, price, promotion) and 2) the grunt work part of data entry, creating product copy, normalizing the data across manufacturers, sourcing quality images and attachments, building proper attributes (that are normalized across different vendors) and organizing the hierarchy/taxonomy while adhering to rigorous standards for all aspects of the data. Consider outsourcing the grunt work while carefully driving the strategy part.
Content creation is not an information technology task: We think you must control the strategy part of the process in-house, but this is not a task that you should just delegate to your information technology (IT) team. Your IT team may be marketing-savvy to the max, but we often find that IT folks are up to their eyeballs in other tasks so giving them another project like a webstore just won’t produce the desired results. Plus, they probably get very little face-time with customers and may know very little about what your customers do and what they need. Of course, IT will be involved, but it is a marketing project.
Content creation is not a job for your part-time high school student: Sure you can hire someone, get a PIM and train them to do the task. Then when they graduate or get promoted, you get to start the process all over again. To do it right you will need a bunch of skills that are difficult to find and to retain.
Don’t kid yourself about the cost of doing it in house: In our experience, if you do honest cost accounting, the cost of outsourcing the work will be less than doing it in house. With that said, we recommend you make a considered decision using your own cost basis.
(Jen Schmitt) I just got back from HARDI’s annual meeting in Las Vegas. It was, as always, a productive, well-attended, business-focused gathering. Kudos to the HARDI staff who make it run like clockwork. I also want to recognize HARDI’s, as well as the American Supply Association’s, tremendous generosity in helping those impacted by the hurricanes last year through the HARDI Unity fund and ASA’s Harvey fund! HARDI alone has raised more than $50,000 thus far. If you had a great 2017 and feel like giving back a little more, consider one of these funds. The news has mostly stopped covering the victims, but make no mistake, the suffering continues.